Case: Bangalore Development Authority Vs. Air Craft Employees Coop.Society Ltd&amp;Ors

2. With the formation of the new State of Mysore, it was considered necessary to have a uniform law for planned growth of land use and development and for the making and execution of town planning schemes. Therefore, the State Legislature enacted the Mysore Town and Country Planning Act, 1961 (for short, `the Town Planning Act). The objectives of that Act were :(i) to create conditions favourable for planning and replanning of the urban and rural areas in the State of Mysore, with a view to providing full civic and social amenities for the people in the State;(ii) to stop uncontrolled development of land due to land speculation and profiteering in land;(iii) to preserve and improve existing recreational facilities and other amenities contributing towards balanced use of land; and(iv) to direct the future growth of populated areas in the State, with a view to ensuring desirable standards of environmental health and hygiene, and creating facilities for the orderly growth of industry and commerce, thereby promoting general standards of living in the State.3. The State of Mysore was renamed Karnataka in 1973. Thereupon, necessary consequential changes were made in the nomenclature of various enactments including the Town Planning Act.4. Section 4 of the Town Planning Act envisages constitution of a State Town Planning Board by the State Government. By Act No.14 of 1964, the Town Planning Act was amended and Chapter I-A comprising of Sections 4-A to 4-H was inserted. These provisions enabled the State Government to issue notification and declare any area in the State to be a local planning area for the purposes of the Act and constitute the "Planning Authority" having jurisdiction over that area. Section 9(1) (unamended) imposed a duty on every Planning Authority to carry out a survey of the area within its jurisdiction, prepare and publish an outline development plan for such area and submit the same to the State Government for provisional approval. In terms of Section 12(1) (unamended), an outline development plan was required to indicate the manner in which the development and improvement of the entire planning area was to be carried out and regulated. Section 19(1), as it then stood, contemplated preparation of a comprehensive development plan and submission of the same for the approval of the State Government. Section 21 (unamended) gave an indication of the factors which were to be included in the comprehensive development plan. Section 26 (unamended) imposed a duty on every Planning Authority to prepare town planning schemes incorporating therein the contents specified in sub-section (1) of that Section.14. In 1992, the BDA also decided to take up the construction of 63.30 kilometers long Outer Ring Road and 3.5 kilometers long Intermediate Ring Road at an estimated cost of Rs.115 crores with a possible escalation up to Rs.130 crores. 36.24 kilometers of the Outer Ring Road was to pass through the BDA layouts and the balance was to pass through the land outside the BDA layouts. The cost of construction of Outer Ring Road passing through the BDA layout was to be met by charging the allottees of sites in the BDA layouts. For the balance 27.06 kilometers of Outer Ring Road and 3.5 kilometers of Intermediate Ring Road a proposal was prepared to obtain financial assistance from the World Bank. In the meeting held on 5.6.1992 under the chairmanship of the Chief Secretary of the State, the possibility of taking loan from HUDCO was explored. Simultaneously, it was considered whether partial burden of the cost could be passed on to the beneficiaries of the private layouts and it was agreed that like the Cauvery Scheme, Ring Road surcharge should be levied on the sites to be formed by the BDA and the private housing societies at the rate of Rs.1 lac per acre. Thereafter, the BDA passed Resolution dated 19.10.1992 for levy of charges at different rates on change of land use in different areas and Rs.1 lac per acre on the layouts of housing societies and private lands as also the sites formed by itself.15.The Air Craft Employees Cooperative Society Ltd. (respondent in C.A. No.7503/2002) submitted an application for approval of layout in respect of 324 acres 30 guntas land situated in Singasandra and Kudlu villages, Surjapur Hobli and Begur Hobli respectively. The application of the respondent was considered in the BDAs meeting held on 31.10.1991 and was approved subject to various conditions including payment of Rs.2 lacs per acre towards the Cauvery Scheme and Rs.1 lac as Ring Road surcharge. Another condition incorporated in the Resolution of the BDA was that the civil portion of work shall be carried out by the respondent under its supervision. The decision of the BDA was communicated to the respondent vide letter dated 12.11.1992.16. The respondent challenged the conditional sanction of its layout in Writ Petition No.11144/1993 and prayed for quashing the demand of Rs.2 lacs per acre towards the Cauvery Scheme and Rs.1 lac as Ring

Reasoning:
36. In our view, the High Court committed serious error by recording a finding that Section 32(5A) is discriminatory and violative of Article 14 of the Constitution. While deciding the issue relating to constitutionality of the Section, the High Court overlooked the well-established principle that a statutory provision is presumed to be constitutionally valid unless proved otherwise and burden lies upon the person who alleges discrimination to lay strong factual foundation to prove that the provision offends the equality clause enshrined in the Constitution.Though, in the writ petitions filed by them, the respondents pleaded that Section 32(5A) is discriminatory, no factual foundation was laid in support of this plea and in the absence of such foundation, the High Court was not at all justified in recording a conclusion that the impugned provision is violative of the equality clause contained in Article 14 of the Constitution.The principle which can be deduced from the above noted precedents is that while examining challenge to the constitutionality of a statutory provision on the ground of excessive delegation, the Court must look into the policy underlying the particular legislation and this can be done by making a reference to the Preamble, the objects sought to be achieved by the particular legislation and the scheme thereof and that the Court would not sit over the wisdom of the legislature and nullify the provisions under which the power to implement the particular provision is conferred upon the executivewill be apposite to observe that apart from the Preamble and the objects of the 1961 and 1976 Acts and the scheme of the two enactments, the expression "such portion of the expenditure as the Authority may determine towards the execution of any scheme or work for augmenting water supply, electricity, roads, transportation and such other amenities" supplies sufficient guidance for the exercise of power by the BDA under Section 32(5A) and it is not possible to agree with the learned counsel for the respondents that the section confers unbridled and uncanalised power upon the BDA to demand an unspecified amount from those desirous of forming private layouts. It is needless to say that the exercise of power by the BDA under Section 32(5A) is always subject to directions which can be given by the State Government under Section 65.We may add that it could not have been possible for the legislature to make provision for effective implementation of the provisions contained in the 1961 and 1976 Acts for the development of the Bangalore Metropolitan Area and this task had to be delegated to some other agency/instrumentality of the32(5A) does not suffer from the vice of excessive delegation and the legislative guidelines can be traced in the Preamble of the 1961 and 1976 Acts and the object and scheme of the two legislations.If the conditions imposed by the BDA requiring the respondents to pay for augmentation of water supply, electricity, transport, etc. are scrutinized in the light of the principles laid down in Sreenivasa General Traders v. State of A.P. (supra), Kishan Lal Lakhmi Chand v. State of Haryana (supra) and I.T.C. Ltd. v. State of Karnataka (supra), it cannot be said that the demand made by the BDA amounts to levy of tax and is ultra vires Article 265 of the Constitution.So far as the levy of supervision charges, improvement charges, examination charges, slum clearance development charges and MRTS cess is concerned, it is appropriate to mention that the High Court has not assigned any reason for declaring the levy of these charges to be illegal. Therefore, that part of the impugned order cannot be sustained. Nevertheless, we feel that the State Government should take appropriate decision in the matter of levy of these charges as well and determine whether the same were disproportionate to the expenses incurred by it, the BDA or any other agency/instrumentality of the State.