BANGALORE INTERNATIONAL AIRPORT AREA PLANNING AUTHORITY versus BIRLA SUPER BULK TERMINAL (NOW A UNIT OF ULTRA TECH CEMENT LTD.) AND ORS. on 27 November 2018

BANGALORE INTERNATIONAL AIRPORT AREA PLANNINGAUTHORITY

v.

BIRLA SUPER BULK TERMINAL (NOW A UNIT OF ULTRATECH CEMENT LTD.) AND ORS.

(Civil Appeal No. 9684 of 2011)

NOVEMBER 27, 2018

[R. BANUMATHI AND INDIRA BANERJEE, JJ.]

Karnataka Town and Country Planning Act, 1961: ss. 14, 15and 18 – Levy of betterment fee u/s. 18 – Sustainability of – Onfacts, appellant constituted as the planning authority for a localplanning area – Respondent No.1 sought permission from theappellant for construction of Bulk Cement Terminal – Land allottedby Karnataka Industrial Areas Development Board-KIADB torespondent no. 1 – Appellant sought respondent No.1 to paybetterment charges, building construction charges etc. under theKTPC Act – Writ petition by respondent no. 1 and 2 that appellanthad no authority to demand any development charges since landswere allotted in favour of respondent no. 1 by the KIADB – Writpetition dismissed – In appeal, the Division Bench held that for theindustrial plots allotted by KIADB, the change of land use and thedevelopment thereof comes under the purview of the specialenactment KIAD Act and not under the general law of KTPC Actand levy of betterment fee u/s. 18 of the KTCP Act is not sustainable – On appeal, held: The object of KIAD Act is to make specialprovisions for securing the establishments of industrial areas in theState and to generally promote the establishment and orderlydevelopment of the industries whereas the KTCP Act is for regulationof planned growth of land use and development and for the makingand execution of town planning schemes in the State – Both theActs-KIAD Act and KTCP Act operate in different fields and themaxim Generalia Specialibus Non Derogant is not applicable – Thereis nothing in the provisions of the KTCP Act to exclude or exemptthe lands covered by the KIAD Act – Development activities includingthe industrial areas fall within the scope of the appellant-Authorityand that the first respondent while obtaining the approval from the

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Aappellant-Authority for its plan is bound to pay the bettermentcharges, road cess and other charges as per the laws – Thus, theorder passed by the Division Bench of the High Court is set aside –First respondent to pay the charges to appellant with 6% interest –Karnataka Industrial Areas Development (KIAD) Act – Maxims.

BAllowing the appeal, the Court

HELD: 1.1 By careful reading of the provisions of both theActs, Karnataka Town and Country Planning (KTCP) Act, 1961and Karnataka Industrial Areas Development (KIAD) Act it isseen that the object of KIAD Act is to make special provisionsCfor securing the establishments of industrial areas in the Stateand to generally promote the establishment and orderlydevelopment of the industries. On the other hand, KTCP Act isfor regulation of planned growth of land use and developmentand for the making and execution of town planning schemes inthe State. Both the Acts i.e. KIAD Act and KTCP Act operate inDdifferent fields. Considering the objects of both the enactments,there is no merit in the plea of the fifth respondent that once aland is acquired for the purpose of industries under the KIADAct and made over to the Board, the use of the land becomes‘use for industrial purpose’ and no further permission for changeEof use of land by KTCP or any other authority is required.[Para 22][649-B-D]

1.2 From a combined reading of Section 18 with Section2(1-c) of KTCP Act, it is clear that the levy of prescribed feeunder Section 18 of the Act is not merely for change of land useFbut also for development of land or building. The language ofexpression used in Section 18 that “permission for change of landused…” and “development of land or building..” is to beinterpreted in the light of the object of KTCP Act as enunciatedin the Preamble. [Para 23][649-F-G]

G1.3 When the government of Karnataka, FinanceDepartment and other departments and also the Commissionerfor Industrial Development and other departments haveparticipated in the said meeting and were all parties to thedecisions as regards the question of levy of fees by KTCP, it isnot open to KIADB to resile from the minutes and put forth claimH

BANGALORE INTERN. AIRPORT AREA PLANNING AUTHO.v. BIRLA SUPER BULK TERMINAL

contrarily. Having been a party to the discussion in the meetingheld on 04.12.1999, the State of Karnataka is also not justified incontending that the lands in question are included in the industrialarea declared by the State Government and hence, not bound topay the development fee under Section 18 of the Act.[Para 25][651-E-G]

1.4 Section 14 read with Section 18 of the KTCP Act clearlyconnotes that the Planning Authority is entrusted with the functionof granting licence to put up construction on the land includingthe land acquired and allotted by the Board under KIAD Act.This is also clear from the provisions contained in the non–obstante clause in Section 74-M of the KTCP Act which declaresthat the provisions of the said Act and the Rules, Regulationsand Bye–Laws made thereunder shall have effect notwithstandinganything inconsistent contained in any other law. There is nothingin the provisions of this Act to exclude or exempt the lands whichare covered by the KIAD Act. [Para 27][652-F-G]

1.5 The High Court, on the one hand, took the view thatSections 14, 15 and 18 of KTCP Act are not applicable to theindustrial area which is governed by KIAD Act and on the otherhand, held that for compliance of the provisions of Sections 14and 15 for all the establishment of the industrial unit, the allotteehas to seek approval of the Planning Authority constituted underKTCP Act and KTCP is to scrutinise the plan and other documents so as to ensure that the establishment of the industrial unit bythe allottee in the industrial area is in conformity with the ZonalRegulations etc; but KTCP is not to levy betterment fee. Thefindings of the High Court are self-contradictory to each other.[Para 29]653-H; 654-A-B]

1.6 The Planning Authority constituted under KTCP Act isentrusted with the functions of granting approval for anydevelopment on the land within its jurisdiction including the landacquired and allotted by the Board under KIAD Act. Per contra,the enactment of KIAD Act is to make special provision forsecuring the establishment of the industrial area in the State andfor that purpose to establish Industrial Areas Development Board.The provisions of both the Acts make the intention of thelegislature very clear. If there are two possible interpretations of

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Aan enactment, one should avoid the construction which wouldreduce the legislation to futility and should rather accept thebroader interpretation. A statute is designed to be workable andthe interpretation thereof by the court should be to secure thatobject. In so far as the “industrial area” allotted by KIADB, theinterpretation given by the High Court to the provisions of KTCPBAct would render the existence of the Planning Authority likethe appellant to futility. While on the one hand, the High Courthas directed the first respondent to obtain permission from thePlanning Authority under KTCP Act and that the appellant-Authority to scrutinise those plans only to ensure that they areCin conformity with the Regulations etc. At the same time, theHigh Court is saying that the appellant-Authority cannot collectthe betterment fees. Such findings are contradictory to each otherand cannot be sustained. [Para 30][654-C-H]

1.7 The High Court held that KIAD Act being a SpecialDAct, the same will prevail over KTCP Act which is a General Act.KTCP Act is applicable to all the developmental activities inrespect of any land coming within the area of Outline DevelopmentPlan (ODP) and the lands in question even though situated inindustrial area comes within the area of ODP of the PlanningAuthority. The developmental activities over the said land haveEto be carried on only with the permission of the Authority andboth the enactments have to be harmoniously construed so as togive effect to each of the Acts enacted by the State Government.[Para 31][654-G-H; 655-A]

1.8 Rule of interpretation says that a statute is bestFinterpreted when it is known why it was enacted, which can beseen from the preamble of an Act. As per the preamble of theKIAD Act, it is an Act to make special provision for securing theestablishment of industrial areas in the State of Karnataka andgenerally to promote the establishment and orderly developmentGof industries therein. KTCP Act on the other hand, was enactedto provide for the regulation of planned growth of land use anddevelopment and for the making and execution of town planningschemes in the State of Karnataka. Thus, considering thelegislative intent of the two enactments, it is seen that there isnothing in the KIAD Act to destroy the authority of the appellantH

BANGALORE INTERN. AIRPORT AREA PLANNING AUTHO.v. BIRLA SUPER BULK TERMINAL

which has its own assigned role to perform under the provisionsof the KTCP Act. Considering the object and purpose for whichboth the Acts were enacted, there is no inconsistency oroverlapping between the two enactments and the power ofauthorities constituted under the Acts. As the areas of operationof KIAD Act and KTCP Act are wholly different, there is noquestion of applicability of the maxim Generalia Specialibus NonDerogant. [Para 32][655-B-E]

1.9 The first respondent has not challenged the jurisdictionof appellant-Authority to levy betterment charges and that theobjections that the first respondent has raised were regardingthe rate of betterment fee treating the first respondent ascommercial establishment and the fact that they are situated inBengaluru Rural (North) District and not in Bengaluru UrbanDistrict. When the first respondent has not raised the objectionregarding the jurisdiction/competence of the appellant-Authorityto levy betterment fee, the first respondent was not justified inturning around and challenging the powers of the appellant-Planning Authority to levy betterment charges. The High Court,did not properly consider the response of the first respondentand the High Court erred in saying that the role of KTCP is onlyto scrutinise the application to ensure that the plan is in conformitywith the provisions of the KTCP Act and that it cannot levy thefee. [Para 34]656-B-D]

1.10 For obtaining sanction of their plan, the other allotteesof industrial plots by KIADB have paid the betterment chargesand also the road cess as demanded by the appellant-Authority.When other allottees of industrial plots by KIADB have paidbetterment charges and road cess for obtaining sanction of theplan, the first respondent cannot challenge the levy and contendthat they are not liable to pay the betterment charges. [Para 35][656-E-F]

1.11 The High Court ignored the important provisions ofKTCP–Sections 14 and 15 regarding the development act andthe development activities including the industrial areas fall withinthe scope of the appellant-Authority and that the first respondentwhile obtaining the approval from the appellant-Authority for itsplan is bound to pay the betterment charges, road cess and other

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Acharges as per the laws. The Single Judge rightly dismissed thewrit petition filed by the first respondent and the Division Bencherred in reversing the same. The impugned judgment of the HighCourt is set aside. The first respondent is directed to payRs.1,48,29,173/- to appellant-Authority with interest at the rateof 6% from the date of the demand, within the stipulated period.B[Paras 36, 37][656-F-H; 657-A-B]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9684

of 2011

From the Judgment and Order dated 21.10.2005 of the High CourtCof Karnataka at Bangalore in Writ Appeal No. 3688/2002 (LB-RES)

Ms. Kiran Suri, Sr. Adv., S. J. Amith, Ms. Aishwarya Kumar, Dr.(Mrs.) Vipin Gupta Advs. with her for the Appellant.

Bharat Sangal, Ms. Anindita Deka, Ms. Babita Kushwaha, Ms.Isha Gupta, Devadatt Kamat, Nishanth Patil, Ms. Sneha K. Iyer, RohitDPrasad, Joseph Aristotle, Mrs. Priya Aristotle, Shiva P., Ms. ArunaHannah Dutta, Ms. Anitha Shenoy, Advs. for the Respondents.

The Judgment of the Court was delivered by

R. BANUMATHI, J. 1. This appeal arises out of the judgmentdated 21.10.2005 passed by the High Court of Karnataka at BangaloreEin Writ Appeal No.3688 of 2002 in and by which the High Court has setaside the order passed by the Single Judge thereby setting aside thebetterment fee levied by the KTCP by holding that the very acquisitionunder the Industrial Area Development Act involve change of land useand development by KIADB and while so, further levy of bettermentFfee under Section 18 of the KTCP is not sustainable.

2. Brief facts of the case which led to filing of this appeal are thatthe provisions of Karnataka Town and Country Planning (KTCP) Act,1961 to provide for regulation of planned growth of land use anddevelopment and for making and execution of town planning schemes inGthe State of Karnataka. The State Government, by virtue of powersconferred under Section 4-A of the KTCP Act, issued NotificationNo.HUD142 MNX 95 dated 12.01.1996 declaring the area shown inthe Schedule to the said notification as ‘Bangalore International AirportPlanning Area’ w.e.f. 12.01.1996. On the same day, the StateGovernment issued another Notification No.HUD 142 MSX 95H

constituting the appellant as the Planning Authority for the said localplanning area. The State Government by Notification dated 14.05.1997added some other villages including the villages in question inDoddaballapur Taluk in the planning area of the appellant.

3. Respondent No.1 approached the State Government to approvea project to establish the Cement Terminal near Bangalore which wasapproved by the Single Window Agency by its clearance order dated29.11.1996. By exercising powers under Sections 3(1) and 1(3) of KIADAct, the Karnataka Industrial Areas Development Board (KIADB),issued a Notification on 03.07.1997 declaring some areas as industrialareas. Respondent No.1 was allotted lands by KIADB in Thippapura,Veerapura, Bashettinalli of Doddaballapur Taluk vide allotment letterdated 12/13.01.1998. Subsequently, respondent No.1 was asked to takepossession of the said lands vide letter dated 29.05.1998 by KIADB andaccordingly, possession certificate was issued on 16.07.1998 andrespondent No.1 took possession on 16.7.1998.

4. On 8.6.1998, Respondent No.1 applied to Appellant authorityseeking permission for construction of Bulk Cement Terminal. TheAppellant inspected the spot along with KIADB Special Land AcquisitionOfficer, Urban Planning Director and Deputy Metropolitan Commissioner.By letter dated 17.9.1998, R-1 was informed by the Appellant that oninspecting the land once again and being satisfied that there is an approachroad measuring 15 feet to the proposed land, it was decided to approvethe development plan as per Rules. The Appellant also informedRespondent No.1 to pay betterment charges @ Rs. 75 per sq. mtr.,inspection charges @ Rs. 150 per hectare, building construction charges,penalty @ Rs. 150 per hectare and road charges @ Rs. 1 lakh per acretotalling Rs.1,48,29,173/- pertaining to the sanctioning of the DevelopmentPlan consisting of the plans of storage, packing and administrative-officebuildings.

5. Respondent No.1 objected to the demand by a letter dated16.10.1998 stating that it had already made payment to KIADB towardsallotment of lands, and therefore, development fee for constructing thecommercial establishment is not necessary. Appellant issued notice dated08.12.1998 under section 15 (4) of KTCP Act stating that as per Section15 (1) of the KTCP Act, every development has to be proceeded onlyafter getting necessary Commencement Certificate from the Appellant.

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AIt was stated in the notice that records reveal that no permission hasbeen obtained as required under the provisions of KTCP Act. KTCPasked respondent No. 1 to stop work and discontinue use of the propertyand to show cause as to why action should not be taken to remove orpull down the work and to restore the land to its original condition.

B6. Respondents No. 1 and 2 filed Writ Petitions No. 37717-719/1998 dated 14.12.1998 before the High Court challenging the said noticedated 17.9.1998 and notice dated 8.12.1998. Respondent No.1 contendedthat the appellant has no authority to demand any development chargessince the lands in the question were allotted in favour of RespondentNo.1 by the KIADB, under the provisions of Karnataka Industrial AreasCDevelopment (KIAD) Act. The Single Judge of the High Court dismissedthe Writ Petitions holding that in view of the declarations issued undersection 4-A of the KTCP Act, the lands in question continue to be withinthe planning area. The Single Judge further held that when respondentNo. 1 itself has submitted to the jurisdiction of the appellant by makingDan application for sanction of plan and for permission and while so, it isnot open for them to say that the appellant has no jurisdiction or authorityto demand development charges. The learned Single Judge held that byvirtue of the power conferred on the appellant under Section 18, theappellant has rightly demanded the development charges having permittedRespondent No. 1 to use the land for establishment of an industry.E

7. In the appeal filed by the respondents No. 1 and 2, the DivisionBench held that KIAD Act is a special Act enacted for securing theestablishment of industries in the State of Karnataka and the industrialarea is governed by the provisions of the Act. The High Court furtherheld that for the industrial plots allotted by KIADB, the change of landFuse and the development thereof comes under the purview of the specialenactment KIAD Act and not under the general law of KTPC Act andthe provisions of special Law will prevail over the provisions of thegeneral Law. The High Court held that the only requirement forrespondent No.1 is to obtain clearance from the appellant to show thatGthe construction of the industrial unit is in conformity with the zonalregulations, etc. and this requirement does not in any way attract theprovisions of Section 18 of the KTCP Act so as to empower the appellantto levy conversion fee/betterment fees.

8. Ms. Kiran Suri, learned senior counsel for the appellant submittedHthat the High Court erroneously held that Sections 14, 15 and 18 of the KTCP Act are not applicable to the lands acquired under the KIADAct. The learned senior counsel submitted that the provisions of KIADAct mainly deals with the declaration of an area as an industrial areaand the acquisition of the lands for the purpose of industrial developmentand allotment of the said land and there are no provisions in the KIADAct with regard to the construction thereon or the developmental activitiesto be carried out in the industrial sites and one has to fall back upon theprovisions of the KTCP Act for carrying on any development activitiesover the said land which brings into action Sections 14 and 15 of theKTCP Act for seeking permission and the power of the Planning Authorityto levy the betterment fee under Section 18 of the KTCP Act. Thelearned senior counsel further submitted that the provisions of KTCPAct govern the entire planning and development of the buildings withinthe State of Karnataka including the industrial area falling within theplanning area of the appellant authority and Section 18 of the KTCP Actautomatically comes into play empowering the appellant to charge thebetterment fees. It was submitted that the areas of operation of KTCPAct and KIAD Act are entirely different with different aims andobjectives and therefore, the principle of interpretation of “special Actprevails over general Act” (Generalia Specialibus Non Derogant)would have no application and the same has been wrongly applied bythe High Court and the Division Bench erred in reversing the judgmentof the Single Judge.

9. Per contra, Mr. Bharat Sangal, learned counsel for the firstrespondent submitted that once the area is allotted to KIAD Board, theacquisition and the allotment being for industrial purpose which involvesthe change of land use and its development is controlled by the KIADBoard and the provisions of KIAD Act and it falls outside the purviewof KTCP Act. The learned counsel for the first respondent furthersubmitted that KIAD being a Special law, it will override the provisionsof Sections 14, 15 and 18 of KTCP Act and a general law like KTCPAct cannot defeat the provisions of the special Law to the extent towhich they are in conflict. The learned counsel further submitted thatthe moment the land was acquired for industrial purpose, it assumes thecharacter of industrial area and no further conversion and developmentis required and hence, there is no question of conversion fee/bettermentfee be paid to KTCP and the entire field is covered by KIAD Act andKIADB Regulations which exclude the application and operation ofKTCP Act, 1966.

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A10. The learned counsel appearing for the fifth respondent-KIADBsubmitted that once an area or land is acquired and declared as anindustrial area under Section 3(1) of KIAD Act, the said area getsdemarcated for industrial use and the KIADB is duty bound to developthe area for industrial activities and the ancillary area by virtue of thepowers and functions under Section 14(C) of KIAD Act. There is noBfurther requirement to apply for change of land use under the KTCPAct. It was further submitted that when any industrial area is set up byKIADB, all infrastructure facilities are also installed and the cost andthe expenditure incurred by the KIADB is passed on to the entrepreneursor allottees who intend to set up facilities for industrial activity in theCState of Karnataka and there is no question of payment of conversioncharges/betterment fee under Section 18 of the KTCP Act.

11. We have carefully considered the rival contentions and perusedthe impugned judgment and materials placed on record. Uponconsideration of the materials placed on record, the following points ariseDfor determination in this appeal:-

(i) Whether the High Court was right in holding that Sections14, 15 and 18 of the KTCP Act are not applicable whenthe lands are declared as industrial areas under Section 3of KIAD Act and the payment of betterment fees for theEpurported development works under the provisions of theKTCP Act does not arise?

(ii) When the areas of operation of KIAD Act and KTCPAct are wholly different with different aims and objectives,whether the High Court was right in saying that theFprinciple of interpretation of Special Act prevails over theGeneral Law is applicable?

12. Karnataka Town and Country Planning Act, 1961 (KTCP Act)has been enacted for regulation of planning, coordination and supervisionof the orderly development of the areas within the State of Karnataka.GKTCP Act is for the regulation of the planned growth of land use anddevelopment and for the making and execution of town planning schemesin the State.

13. A combined reading of Section 14 with Section 18 of the KTCPAct leads to the conclusion that the Planning Authority under KTCP Act H

is entrusted with the function of granting licence to put up constructionon the land including the land allotted by the KIAD Board to the allotteesunder the KIAD Act. This is clear from the non-obstante clause inKTCP Act i.e. Section 76-M which declares that the provisions of Section76-M of KTCP Act along with rules and regulations and bye-laws madethereunder shall have effect notwithstanding anything inconsistentcontained in any other law.

14. For proper appreciation of the contentions urged, we mayusefully refer to the relevant provisions of both KTCP Act and KIADAct. The Preamble of the KTCP Act reads as under:- “An Act to provide for the regulation of planned growth ofland use and development and for the making and executionof town planning schemes in the State of Karnataka.

Whereas it is necessary and expedient,—

(i) to create conditions favourable for planning and replanningof the urban and rural areas in the State of Karnataka, witha view to providing full civic and social amenities for thepeople in the State,

(ii) to stop uncontrolled development of land due to landspeculation and profiteering in land,

(iii) to preserve and improve existing recreational facilitiesand other amenities contributing towards balanced use ofland; and

(iv) to direct the future growth of populated areas in the State,with a view to ensuring desirable standards of environmentalhealth and hygiene, and creating facilities for the orderlygrowth of industry and commerce, thereby promoting generalstandards of living in the State;

And whereas, in order to ensure that town planning schemesare made in a proper manner and their execution is madeeffective, it is necessary to provide that a local authority shallprepare a development plan for the entire area within itsjurisdiction;”

15. “Development” and “Local Authority” are defined in Section2 of the KTCP Act as under:- A

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“Section 2. Definitions – In this Act, unless the context otherwiserequires. –

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(1-c) “Development” with its grammatical variations, meansthe carrying out of building, engineering, mining, or other operationsBin, on, over or under land or the making of any material change inany building or land, or in the use of any building or land andincludes sub-division of any land; ……

[(3-a) “Local authority” means a municipal corporation,municipal council, Town Panchayat or Grama Panchayat and aLocal Authority is a ‘local authority concerned if any land withinits local limits falls in the area of a plan prepared or to be preparedunder this Act; C

DAdmittedly, appellant herein is the planning authority within the meaningof Section 2(7) of the Act.

16. Section 14 of the KTCP Act deals with enforcement of OutlineDevelopment Plan (ODP) and Regulations and it prescribes that on orfrom the date on which a declaration of intention to prepare ODP ispublished under Section 10(1), every land use, every change in the landEuse and every development in the area covered by the plan shall conformto the KTCP Act, the ODP and the Regulations as approved by StateGovernment under Section 13(3). Section 14(1) stipulates that everyland use, every change in land use and every development in the areascovered by the plan shall conform to the provisions of the Act, the OutlineFDevelopment Plan and the regulations, as finally approved by the StateGovernment under sub-section (3) of Section 13. Section 14(2)(a) ofthe Act defines the expression ‘development’ which means the carryingout of building or other operation in or over or under any land or themaking of any material change in the use of any building or other land.

17. Section 15 authorizes the Planning Authority to grant permissionfor development of building or land. Section 18 confers the power tocollect betterment fee and it says where the permission for the changein the use or development of any land or building is granted under Section15 or Section 16, and such change or development is capable of yielding G

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betterment income to the owner, the Planning Authority may levy aprescribed fees not exceeding one third of the increase in the value ofthe land or building in the prescribed manner for permitting such use ordevelopment. In exercise of its powers under Section 10, the PlanningAuthority declared its intention of making ODP by a notification dated29.03.1996 which was made public. The authority resolved to adopt therelevant government orders with regard to charge of betterment feesdated 05.08.1996.

18. Section 18 of the KTCP Act confers the power upon thePlanning Authority to collect betterment fee where permission for achange in the use or development of the land or building is granted underSection 15 or Section 16 and such change or development is capable ofyielding a better income to the owner, the Planning Authority may levy aprescribed fee not exceeding one-third of the estimated increase in thevalue of the land or building in the prescribed manner for permitting suchchange in use or development. Section 18 of the KTCP Act reads asunder:-

Section 18.Recovery of a fee in certain cases of permissionfor change in the use of land or building.- [(1) Where permission for change of land use or development ofland or building is granted under section 14-A or section 14-B orSection 15 or Section 17 and such change or development is capableof yielding a better income to the owner, the Planning Authoritymay levy a prescribed fee not exceeding one-third of the estimatedincrease in the value of the land or building in the prescribed mannerfor permitting such change of land use or development of land orbuilding.]

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[(3) The State Government may exempt any Board, Authority orbody constituted by or under any law owned or controlled by theState Government or Central Government or an infrastructureProject promoted or implemented by any Company or person andapproved by the State Government or Central Government fromthe payment of fee specified under sub-section (1).

19. The non-obstante clause in Section 76-M of the KTCP Actreads as under:- A

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“Section 76-M. Effect of other Laws.—(1) Save as providedin this Act, the provisions of this Act and the rules, regulations andbye-laws made thereunder shall have effect notwithstandinganything inconsistent therewith contained in any other law.

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(a) when permission for development in respect of any land hasbeen obtained under this Act, such development shall not bedeemed to be unlawfully undertaken or carried out by reason onlyof the fact that permission, approval or sanction required undersuch other law for such development has not been obtained; C

(b) when permission for such development has not been obtainedunder this Act, such development shall not be deemed to be lawfullyundertaken or carried out by reason only of the fact that permission,approval or sanction required under such other law for suchdevelopment has been obtained.”

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20. The purpose of Karnataka Industrial Areas Development Act,as seen from the Preamble of the Act, is to make special provisions forsecuring the establishment or industrial areas in the State and generallyto promote the establishment and orderly development of the industriestherein and for that purpose to establish Industrial Areas DevelopmentBoard. The Preamble of the KIAD Act reads as under:- E

“An Act to make special provision for securing theestablishment of industrial areas in the State of Karnatakaand generally to promote the establishment and orderlydevelopment of industries therein, and for that purpose toestablish an Industrial Areas Development Board and forFpurposes connected with the matters aforesaid.

Whereas it is expedient to make special provision forsecuring the establishment of industrial areas in the State ofKarnataka and generally to promote the establishment andthe orderly development of industries in such industrial areas,and for that purpose to establish an Industrial AreasDevelopment Board and for purposes connected with thematters aforesaid.”

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21. As per Section 27 of the KIAD Act, the provisions of the Actshall apply to such areas from such date as have been notified by the H

State Government under sub-section (3) of Section 1. Section 47 isthe non-obstante clause of KIAD Act which reads as under:- “Section 47 – Effect of provisions inconsistent with otherlaws – The provisions of this Act shall have effect notwithstandinganything inconsistent therewith contained in any other law.”

22. By careful reading of the provisions of both the Acts, it is seenthat the object of KIAD Act is to make special provisions for securingthe establishments of industrial areas in the State and to generally promotethe establishment and orderly development of the industries. On theother hand, KTCP Act is for regulation of planned growth of land useand development and for the making and execution of town planningschemes in the State. Both the Acts i.e. KIAD Act and KTCP Actoperate in different fields. Considering the objects of both the enactments,we find that there is no merit in the plea of the fifth respondent that oncea land is acquired for the purpose of industries under the KIAD Act andmade over to the Board, the use of the land becomes ‘use for industrialpurpose’ and no further permission for change of use of land by KTCPor any other authority is required.

23. Though heading of Section 18 of the KTCP Act is “Recoveryof a fee in certain cases of permission for change in the use ofland or building”, the levy of prescribed fee is not only for permissionfor change of land use but also for development of land or building ascontemplated under Section 14A or Section 14B or Section 15 or Section17 of the Act. As pointed out earlier, “development” is defined in Section2(1-c) of KTCP Act which inter alia provides for “in the use of anybuilding or land and includes sub-division of any land”. From acombined reading of Section 18 with Section 2(1-c) of KTCP Act, it isclear that the levy of prescribed fee under Section 18 of the Act is notmerely for change of land use but also for development of land or building.The language of expression used in Section 18 that “permission forchange of land used…..” and “development of land or building….”is to be interpreted in the light of the object of KTCP Act as enunciatedin the Preamble of the Act.

24. Power to Exempt:- Prior to Amendment Act 11 of 1997(with effect from 19.02.1997), Section 16 of KIAD Act provided forexclusion of operation of other laws in respect of industrial areas. Section16(C) provided that the State Government may by notification provide A

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Athat the provisions of any other law relating to local authority which is inforce in that area shall cease to apply and thereupon such provision wasceased to apply thereto. In exercise of such powers, the StateGovernment issued the Circular dated 31.12.1990 directing UrbanDevelopment Authorities, City Improvement Trust Boards, PlanningAuthorities not to collect the betterment charges from the statutory bodiesBlike Karnataka Housing Board and KIADB. Section 16 of the KIADAct was omitted by Act 11 of 1997 (with effect from 19.02.1997).Subsequently by the government order dated 17.07.1997, the aboveCircular dated 31.12.1990 was revoked and the authorities above namedhave been directed to collect the betterment charges as per law.

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25. The learned senior counsel for the appellant has drawn ourattention to the Minutes of the Meeting held on 04.12.1999 where thequestion of levy of fees by KTCP in the Bangalore Metropolitan Regioncame up for discussion. The said meeting was attended by variousauthorities including the Finance Department, Commissioner of KIADB,DDirector of Town Planning etc. After detailed discussion, the followingdecisions were taken:- “After detailed discussions, the following decisions were taken:

1. The Principal Secretaries to Government UDD & RDPR,in consultation with the Principal Secretary to GovernmentECommerce & Industries Department and Secretary, LawDepartment would examine all aspects pertaining toconstitution of Industrial Townships in identified industrialareas and come up with firm proposals by end ofDecember, 1999.

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2. KIADB will obtain approval from the concerned PlanningAuthority before developing any new industrial area;

3. The matter regarding rationalization of various charges,fees and other levies under the KTCP Act and RDPR Actwill be re-examined by the concerned departments, havingGregard to what is prevailing in neighboring States and firmproposals will be formulated within a period of one month;

4. The matter regarding delegation of powers to KIADB forgranting approvals for building plans for industrial units tobe established in approved industrial areas will be examined H

by the Urban Development Department and if necessarysuitable amendments would be effected to the concernedTown Planning Act; and

5. Principal Secretary to Government Commerce & IndustriesDepartment will organize a meeting of major industries whohad not yet paid certain charges and fee and try to sort outthe matter in consultation with the Urban DevelopmentDepartment; Concluding the discussions, the Minister for Large &Medium Industries and Infrastructure Developmentinformed that the main objective of constituting industrialtownships was to simplify and streamline the proceduresand ensure that approvals and also ensure that theseindustrial areas are maintained properly which at presentare in a sorry state of affairs. He suggested that a properrevenue sharing mechanism between township authority andconcerned local bodies should be worked out to ensure thatthe local bodies are also strengthened and take developmentworks outside the industrial area.In view of the inordinatedelay in fulfilling the commitments which had been made inthe 1993 policy he requested that all concerned departmentsshould take immediate action to formulate a proposal whichis acceptable to all the departments.” [Underlining added]

When the government of Karnataka, Finance Department and otherdepartments and also the Commissioner for Industrial Development andother departments have participated in the abovesaid meeting and wereall parties to the above decisions, it is not open to KIADB to resile fromthe minutes and put forth claim contrarily. Having been a party to thediscussion in the meeting held on 04.12.1999, the State of Karnataka isalso not justified in contending that the lands in question are included inthe industrial area declared by the State Government and hence, notbound to pay the development fee under Section 18 of the Act.

26. It was stated by the learned senior counsel for the appellantthat the State of Karnataka has not filed its counter in the High Court. Itis also to be pointed out that after dismissal of the writ petition by theSingle Judge, a writ appeal was preferred only by the first respondent.The State of Karnataka has neither filed any appeal nor made its stand A

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Aclear before the High Court. In the Supreme Court also, the State ofKarnataka has not filed its counter affidavit. Only at the time ofarguments, the State of Karnataka has filed written submissions statingthat the provisions of the KTCP Act are not attracted to the industrialarea covered under KIAD Act and that Section 18 of the Act will haveno application and hence, no fee could be levied thereunder. In its writtenBsubmissions, the stand taken by the State of Karnataka reads as under:- “……It is stated that in the present case, the lands in question areincluded in the industrial area declared by the State Governmentand the change in the land use and development thereof aregoverned by the provisions contained under Karnataka IndustrialCAreas Development Act, 1966 Sections 14 and 15 of the KarnatakaTown and Country Planning Act, 1961 are not at all attracted andconsequently Section 18 thereof will have no application to suchlands and hence no fee could be levied there under by respondentNo.4 and the petitioner…..”

DSince the State of Karnataka has not made its stand clear before theHigh Court nor any counter affidavit sworn in by any responsible officerof the State of Karnataka has been filed, we are not inclined to go intothe merits of the stand taken by State of Karnataka in its writtensubmissions. More so, when the State is a party to the meeting held onE04.12.1999 and concern expressed in the meeting as to the non-paymentof development charges and the decisions taken thereon. The Stateappears to have been sitting over the fence and watching its two keyauthorities under KTCP Act and KIAD Act litigating.

27. Section 14 read with Section 18 of the KTCP Act clearlyFconnotes that the Planning Authority is entrusted with the function ofgranting licence to put up construction on the land including the landacquired and allotted by the Board under KIAD Act. This is also clearfrom the provisions contained in the non-obstante clause in Section 74-M of the KTCP Act which declares that the provisions of the said Actand the Rules, Regulations and Bye-Laws made thereunder shall haveGeffect notwithstanding anything inconsistent contained in any other law.There is nothing in the provisions of this Act to exclude or exempt thelands which are covered by the KIAD Act.

28. In its lengthy judgment, the High Court inter alia observedthat the very acquisition for the industrial areas and the development byH

KIADB by itself involve the change of land use and the development bythe KIADB and while so, seeking permission for change of land use andits development under the KTCP Act will be superfluous. The relevantfindings of the High Court in the impugned judgment are as under:-

• So far as the land acquired under KIAD Act and utilised forindustrial purpose and development thereof will have to be madeby the Board in the area declared under the Act as an industrialarea. The industrial activities in the industrial area are developedand controlled by the KIADB in accordance with the provisionsof KIAD Act and it is a part of functions of KIADB;

• The non-obstante clause-Section 47 of KIAD Act excludes theapplication of the provisions of any other Act;

• The industrial activities in the industrial area, however, shall notcontravene other laws and it shall be in conformity with ZoningRegulations and the Planning Authority constituted under theKTCP Act. The submission of plan to the appellant-Authority isonly to ensure that the establishment of the industrial unit by theallottee in the industrial area is in conformity with the ZonalRegulations. Only for this limited purpose, the allottee of theindustrial plot must submit its plan to the Planning Authorityconstituted under the KTCP Act for the purpose of obtainingNOC;

• For granting approval and for issuance of NOC, the PlanningAuthority under KTCP Act cannot levy betterment fee underSection 18 of the KTCP Act because the allottee of an industrialplot does not seek for a change in the land use or developmentof the said land. There was already a change of land use and itsdevelopment as an industrial unit which is the function of theBoard constituted under the Special Act i.e. KIAD Act; and

• When the entrepreneurs do not seek for change in land use andits development within the meaning of Sections 14 and 15 of theKTCP Act, the question for levying any fee for change of landuse under Section 18 of the Act will not arise.

29. The High Court, on the one hand, took the view that Sections14, 15 and 18 of KTCP Act are not applicable to the industrial areawhich is governed by KIAD Act. On the other hand, the High Court A

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Aheld that for compliance of the provisions of Sections 14 and 15 of theKTCP Act for all the establishment of the industrial unit, the allottee hasto seek approval of the Planning Authority constituted under KTCP Actand KTCP is to scrutinise the plan and other documents so as to ensurethat the establishment of the industrial unit by the allottee in the industrialarea is in conformity with the Zonal Regulations etc; but KTCP is not toBlevy betterment fee. The findings of the High Court are self-contradictoryto each other.

30. As discussed earlier, the Planning Authority constituted underKTCP Act is entrusted with the functions of granting approval for anydevelopment on the land within its jurisdiction including the land acquiredCand allotted by the Board under KIAD Act. Per contra, the enactmentof KIAD Act is to make special provision for securing the establishmentof the industrial area in the State and for that purpose to establish IndustrialAreas Development Board. The provisions of both the Acts make theintention of the legislature very clear. As rightly submitted by the learnedDsenior counsel for the appellant that if there are two possibleinterpretations of an enactment, one should avoid the construction whichwould reduce the legislation to futility and should rather accept the broaderinterpretation. A statute is designed to be workable and the interpretationthereof by the court should be to secure that object. In so far as the“industrial area” allotted by KIADB, the interpretation given by the HighECourt to the provisions of KTCP Act would render the existence of thePlanning Authority like the appellant to futility. While on the one hand,the High Court has directed the first respondent to obtain permissionfrom the Planning Authority under KTCP Act and that the appellant-Authority to scrutinise those plans only to ensure that they are inFconformity with the Regulations etc. At the same time, the High Courtis saying that the appellant-Authority cannot collect the betterment fees.In our considered view, such findings are contradictory to each otherand cannot be sustained.

31. The High Court held that KIAD Act being a Special Act, the Gsame will prevail over KTCP Act which is a General Act. KTCP Act isapplicable to all the developmental activities in respect of any land comingwithin the area of Outline Development Plan (ODP) and the lands inquestion even though situated in industrial area comes within the area ofODP of the Planning Authority. The developmental activities over the H

said land have to be carried on only with the permission of the Authorityand both the enactments have to be harmoniously construed so as togive effect to each of the Acts enacted by the State Government.

32. The question to be considered in this regard is whether KIADAct is a special enactment and KTCP Act a general Act and whetherthe maxim ‘Generalia Specialibus Non Derogant’ is applicable asheld by the High Court. Rule of interpretation says that a statute is bestinterpreted when we know why it was enacted, which can be seen fromthe preamble of an Act. As discussed earlier, as per the preamble of theKIAD Act, it is an Act to make special provision for securing theestablishment of industrial areas in the State of Karnataka and generallyto promote the establishment and orderly development of industriestherein. KTCP Act on the other hand, as we have pointed out earlier,was enacted to provide for the regulation of planned growth of land useand development and for the making and execution of town planningschemes in the State of Karnataka. Thus, considering the legislativeintent of the two enactments, it is seen that there is nothing in the KIADAct to destroy the authority of the Appellant which has its own assignedrole to perform under the provisions of the KTCP Act. Considering theobject and purpose for which both the Acts were enacted, there is noinconsistency or overlapping between the two enactments and the powerof authorities constituted under the Acts. As the areas of operation ofKIAD Act and KTCP Act are wholly different, there is no question ofapplicability of the maxim Generalia Specialibus Non Derogant.

33. Seeking grant of permission for construction of industrialbuildings – Bulk Cement Terminal near Dodaballapur Railway Station,the first respondent submitted its application to the appellant-Authorityon 08.06.1998. On that application for sanctioning the development planconsisting of the plan of storage, packing and administrative officebuildings in the plot in question, the appellant-Authority vide order dated17.09.1988 levied betterment charges, road charges etc. ofRs.1,48,29,173/- under various heads. In response to the same, the firstrespondent has sent its reply on 16.10.1998 inter alia stating that:- (i)since the first respondent has made payment to KIADB towards allotmentof lands considering the first respondent as commercial establishmentand levy of development at the rate of Rs.75/- per sq. mtr. may not benecessary; (ii) the construction put up by the first respondent are industrial A

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Abuildings and not commercial establishments; and (iii) the first respondentis situated in Bengaluru Rural (North) District and it is not situated inBengaluru Urban District attracting levy of such higher fee.

34. By careful perusal of the first respondent’s response dated16.10.1998, it is seen that the first respondent has not challenged theBjurisdiction of appellant-Authority to levy betterment charges and thatthe objections that the first respondent has raised were regarding therate of betterment fee treating the first respondent as commercialestablishment and the fact that they are situated in Bengaluru Rural(North) District and not in Bengaluru Urban District. When the firstrespondent has not raised the objection regarding the jurisdiction/Ccompetence of the appellant-Authority to levy betterment fee, the firstrespondent was not justified in turning around and challenging the powersof the appellant-Planning Authority to levy betterment charges. TheHigh Court, in our view, did not properly consider the response of thefirst respondent and the High Court erred in saying that the role of KTCPDis only to scrutinise the application to ensure that the plan is in conformitywith the provisions of the KTCP Act and that it cannot levy the fee.

35. It is also pertinent to note that for obtaining sanction of theirplan, the other allottees of industrial plots by KIADB have paid thebetterment charges and also the road cess as demanded by the appellant-EAuthority. In this regard, the learned senior counsel for the appellanthas drawn our attention to the communication from ITC Limited includingthe Pay Order dated 01.08.1997 for payment of betterment charges ofRs.3,01,71,600/-. When other allottees of industrial plots by KIADBhave paid betterment charges and road cess for obtaining sanction ofthe plan, the first respondent cannot challenge the levy and contend thatFthey are not liable to pay the betterment charges.

36. The High Court, in our view, ignored the important provisionsof KTCP i.e. Sections 14 and 15 regarding the development act and thedevelopment activities including the industrial areas fall within the scopeof the appellant-Authority and that the first respondent while obtainingGthe approval from the appellant-Authority for its plan is bound to pay thebetterment charges, road cess and other charges as per the laws. Thelearned Single Judge has rightly dismissed the writ petition filed by thefirst respondent and the Division Bench erred in reversing the same andthe impugned judgment is liable to be set aside.

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37. In the result, the impugned judgment of the High Court is setaside and this appeal is allowed. The first respondent is directed to payRs.1,48,29,173/- to appellant-Authority with interest at the rate of 6%from the date of the demand (17.09.1998) within a period of two monthsfrom this date, failing which the respondent is liable to pay the interest atthe rate of 12% thereafter on the accrued amount.

Nidhi Jain

Appeal allowed.

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