REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.9684 OF 2011

BANGALORE INTERNATIONAL AIRPORT  AREA PLANNING AUTHORITY  ….Appellant

VERSUS

BIRLA SUPER BULK TERMINAL  (NOW A UNIT OF ULTRA TECH CEMENT LTD.) AND ORS.             ….Respondents

J U D G M E N T

R. BANUMATHI, J.

This  appeal  arises  out  of  the  judgment  dated  21.10.2005

passed by the High Court of Karnataka at Bangalore in Writ Appeal

No.3688 of 2002 in and by which the High Court has set aside the

order  passed  by  the  Single  Judge  thereby  setting  aside  the

betterment  fee  levied  by  the  KTCP  by  holding  that  the  very

acquisition  under  the  Industrial  Area  Development  Act  involve

change  of  land  use  and  development  by  KIADB  and  while  so,

further levy of betterment fee under Section 18 of the KTCP is not

sustainable.   

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2. Brief facts of the case which led to filing of this appeal are that

the provisions of Karnataka Town and Country Planning (KTCP) Act,

1961 to provide for regulation of planned growth of land use and

development  and  for  making  and  execution  of  town  planning

schemes in  the State  of  Karnataka.   The State  Government,  by

virtue  of  powers  conferred  under  Section  4-A of  the  KTCP Act,

issued Notification No.HUD142 MNX 95 dated 12.01.1996 declaring

the  area  shown  in  the  Schedule  to  the  said  notification  as

‘Bangalore  International  Airport  Planning  Area’ w.e.f.  12.01.1996.

On the same day, the State Government issued another Notification

No.HUD 142 MSX 95  constituting the appellant  as  the  Planning

Authority for the said local planning area.   The State Government

by  Notification  dated  14.05.1997  added  some  other  villages

including  the  villages  in  question  in  Doddaballapur  Taluk  in  the

planning area of the appellant.   

3. Respondent  No.1  approached  the  State  Government  to

approve a project to establish the Cement Terminal near Bangalore

which was approved by the Single Window Agency by its clearance

order dated 29.11.1996.  By exercising powers under Sections 3(1)

and 1(3) of KIAD Act, the Karnataka Industrial Areas Development

Board (KIADB), issued a Notification on 03.07.1997 declaring some

areas as industrial areas.  Respondent No.1 was allotted lands by

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KIADB  in  Thippapura,  Veerapura,  Bashettinalli  of  Doddaballapur

Taluk  vide  allotment  letter  dated  12/13.01.1998.   Subsequently,

respondent No.1 was asked to take possession of the said lands

vide letter dated 29.05.1998 by KIADB and accordingly, possession

certificate  was  issued  on  16.07.1998  and  respondent  No.1  took

possession on 16.7.1998.   

4. On 8.6.1998, Respondent No.1 applied to Appellant authority

seeking permission for construction of Bulk Cement Terminal. The

Appellant  inspected  the  spot  along  with  KIADB  Special  Land

Acquisition  Officer,  Urban  Planning  Director  and  Deputy

Metropolitan  Commissioner.  By  letter  dated  17.9.1998,  R-1  was

informed by the Appellant that on inspecting the land once again

and being satisfied that there is an approach road measuring 15

feet  to  the  proposed  land,  it  was  decided  to  approve  the

development  plan  as  per  Rules.  The  Appellant  also  informed

Respondent 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 acre totalling Rs.1,48,29,173/- pertaining to the sanctioning

of the Development Plan consisting of the plans of storage, packing

and administrative-office buildings.  

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5. Respondent No.1 objected to the demand by a letter dated

16.10.1998  stating  that  it  had  already  made  payment  to  KIADB

towards  allotment  of  lands,  and  therefore,  development  fee  for

constructing  the  commercial  establishment  is  not  necessary.

Appellant issued notice dated 08.12.1998 under section 15 (4) of

KTCP Act stating that as per Section 15 (1) of the KTCP Act, every

development  has  to  be  proceeded  only  after  getting  necessary

Commencement Certificate from the Appellant. It was stated in the

notice that records reveal that no permission has been obtained as

required under the provisions of KTCP Act. KTCP asked respondent

No. 1 to stop work and discontinue use of the property and to show

cause as to why action should not be taken to remove or pull down

the work and to restore the land to its original condition.  

6. Respondents  No.  1  and  2  filed  Writ  Petitions  No.  37717-

719/1998 dated 14.12.1998 before the High Court challenging the

said  notice  dated  17.9.1998  and  notice  dated  8.12.1998.

Respondent No.1 contended that the appellant has no authority to

demand any development charges since the lands in the question

were allotted in favour of Respondent No.1 by the KIADB, under the

provisions of Karnataka Industrial Areas Development (KIAD) Act.

The Single Judge of  the High Court  dismissed the Writ  Petitions

holding that in view of the declarations issued under section 4-A of

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the  KTCP Act,  the  lands  in  question  continue  to  be  within  the

planning area. The Single Judge further held that when respondent

No.  1  itself  has  submitted  to  the  jurisdiction  of  the  appellant  by

making an application for sanction of plan and for permission and

while so, it is not open for them to say that the appellant has no

jurisdiction  or  authority  to  demand  development  charges.  The

learned Single Judge held that by virtue of the power conferred on

the appellant under Section 18, the appellant has rightly demanded

the development  charges having permitted Respondent  No.  1  to

use the land for establishment of an industry.  

7. In  the  appeal  filed  by  the  respondents  No.  1  and  2,  the

Division  Bench  held  that  KIAD  Act  is  a  special  Act  enacted  for

securing the establishment of industries in the State of Karnataka

and the industrial area is governed by the provisions of the Act. The

High  Court  further  held  that  for  the  industrial  plots  allotted  by

KIADB, the change of land use and the development thereof comes

under the purview of the special enactment KIAD Act and not under

the general law of KTPC Act and the provisions of special Law will

prevail over the provisions of the general Law. The High Court held

that the only requirement for respondent No.1 is to obtain clearance

from the appellant to show that the construction of the industrial unit

is in conformity with the zonal regulations, etc. and this requirement

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does not in any way attract the provisions of Section 18 of the KTCP

Act  so  as  to  empower  the  appellant  to  levy  conversion

fee/betterment fees.  

8. Ms.  Kiran  Suri,  learned  senior  counsel  for  the  appellant

submitted that the High Court erroneously held that Sections 14, 15

and 18 of the KTCP Act are not applicable to the lands acquired

under the KIAD Act.  The learned senior counsel submitted that the

provisions of KIAD Act mainly deals with the declaration of an area

as an industrial area and the acquisition of the lands for the purpose

of industrial development and allotment of the said land and there

are no provisions in the KIAD Act with regard to the construction

thereon  or  the  developmental  activities  to  be  carried  out  in  the

industrial sites and one has to fall back upon the provisions of the

KTCP Act for carrying on any development activities over the said

land which brings into action Sections 14 and 15 of the KTCP Act

for seeking permission and the power of the Planning Authority to

levy the betterment fee under Section 18 of the KTCP Act.   The

learned  senior  counsel  further  submitted  that  the  provisions  of

KTCP  Act  govern  the  entire  planning  and  development  of  the

buildings within the State of Karnataka including the industrial area

falling  within  the  planning  area  of  the  appellant  authority  and

Section  18  of  the  KTCP  Act  automatically  comes  into  play

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empowering the appellant  to charge the betterment fees.  It  was

submitted that the areas of operation of KTCP Act and KIAD Act are

entirely different  with different aims and objectives and therefore,

the principle of interpretation of “special Act prevails over general

Act”  (Generalia  Specialibus  Non  Derogant) would  have  no

application and the same has been wrongly applied by the High

Court and the Division Bench erred in reversing the judgment of the

Single Judge.

9. Per contra,  Mr.  Bharat  Sangal,  learned counsel for  the first

respondent submitted that once the area is allotted to KIAD Board,

the acquisition and the allotment being for industrial purpose which

involves the change of land use and its development is controlled

by  the  KIAD Board  and  the  provisions  of  KIAD Act  and  it  falls

outside the purview of KTCP Act.  The learned counsel for the first

respondent further submitted that KIAD being a Special law, it will

override the provisions of Sections 14, 15 and 18 of KTCP Act and a

general  law  like  KTCP Act  cannot  defeat  the  provisions  of  the

special Law to the extent to which they are in conflict.  The learned

counsel further submitted that the moment the land was acquired for

industrial purpose, it assumes the character of industrial area and

no further conversion and development is required and hence, there

is no question of conversion fee/betterment fee be paid to KTCP

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and the entire field is covered by KIAD Act and KIADB Regulations

which exclude the application and operation of KTCP Act, 1966.  

10. The learned counsel appearing for the fifth respondent-KIADB

submitted that once an area or land is acquired and declared as an

industrial area under Section 3(1) of KIAD Act, the said area gets

demarcated  for  industrial  use  and  the  KIADB  is  duty  bound  to

develop the area for industrial activities and the ancillary area by

virtue of the powers and functions under Section 14(C) of KIAD Act.

There is  no further  requirement  to  apply for  change of  land use

under  the  KTCP  Act.   It  was  further  submitted  that  when  any

industrial  area is set  up by KIADB, all  infrastructure facilities are

also  installed  and  the  cost  and  the  expenditure  incurred  by  the

KIADB is passed on to the entrepreneurs or allottees who intend to

set up facilities for industrial activity in the State of Karnataka and

there is no question of payment of conversion charges/betterment

fee under Section 18 of the KTCP Act.

11. We  have  carefully  considered  the  rival  contentions  and

perused the impugned judgment and materials placed on record.

Upon consideration of the materials placed on record, the following

points arise for determination in this appeal:-

(i) Whether  the  High  Court  was  right  in  holding  that

Sections  14,  15  and  18  of  the  KTCP  Act  are  not

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applicable  when  the  lands  are  declared  as  industrial

areas under Section 3 of KIAD Act and the payment of

betterment  fees for  the  purported development  works

under the provisions of the KTCP Act does not arise?

(ii)  When the areas of operation of KIAD Act and KTCP Act

are wholly different with different aims and objectives,

whether  the  High  Court  was  right  in  saying  that  the

principle of interpretation of Special Act prevails over the

General Law is applicable?   

12. Karnataka Town and Country Planning Act, 1961 (KTCP Act)

has  been  enacted  for  regulation  of  planning,  coordination  and

supervision of the orderly development of the areas within the State

of Karnataka.  KTCP Act is for the regulation of the planned growth

of land use and development and for the making and execution of

town planning schemes in the State.   

13. A combined  reading  of  Section  14  with  Section  18  of  the

KTCP Act leads to the conclusion that the Planning Authority under

KTCP Act is entrusted with the function of granting licence to put up

construction on  the  land  including the land allotted by the KIAD

Board to the allottees under the KIAD Act.  This is clear from the

non-obstante clause in KTCP Act i.e. Section 76-M which declares

that the provisions of Section 76-M of KTCP Act along with rules

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and regulations and bye-laws made thereunder  shall  have effect

notwithstanding anything inconsistent contained in any other law.   

14. For  proper  appreciation  of  the  contentions  urged,  we  may

usefully refer to the relevant provisions of both KTCP Act and KIAD

Act.  The Preamble of the KTCP Act reads as under:-

“An Act to provide for the regulation of planned growth of land use  and  development  and  for  the  making  and  execution  of town planning schemes in the State of Karnataka.

Whereas it is necessary and expedient,—  

(i) to create conditions favourable for planning and replanning of the urban and rural areas in the State of Karnataka, 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;  

And  whereas,  in  order  to  ensure  that  town  planning schemes are made in a proper manner and their execution is made effective,  it  is  necessary  to  provide  that  a  local  authority  shall prepare  a  development  plan  for  the  entire  area  within  its jurisdiction;”  

15. “Development” and “Local Authority” are defined in Section 2

of the KTCP Act as under:-

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

……

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(1-c)  “Development”  with its  grammatical  variations,  means the carrying out of building, engineering, mining, or other operations in, on, over or under land or the making of any material change in any building or land, or in the use of any building or land and includes sub-division of any land;

……

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

Admittedly,  appellant  herein  is  the  planning  authority  within  the

meaning of Section 2(7) of the Act.

16. Section 14 of the KTCP Act deals with enforcement of Outline

Development Plan (ODP) and Regulations and it prescribes that on

or from the date on which a declaration of intention to prepare ODP

is published under Section 10(1), every land use, every change in

the land use and every development in the area covered by the plan

shall  conform to the KTCP Act,  the ODP and the Regulations as

approved by State Government under Section 13(3).  Section 14(1)

stipulates that every land use, every change in land use and every

development in the areas covered by the plan shall conform to the

provisions  of  the  Act,  the  Outline  Development  Plan  and  the

regulations,  as  finally  approved  by  the  State  Government  under

sub-section (3) of Section 13.  Section 14(2)(a) of the Act defines

the  expression  ‘development’  which  means  the  carrying  out  of

building  or  other  operation  in  or  over  or  under  any  land  or  the

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making of any material change in the use of any building or other

land.   

17. Section  15  authorizes  the  Planning  Authority  to  grant

permission for development of building or land. Section 18 confers

the power to collect betterment fee and it says where the permission

for the change in the use or development of any land or building is

granted  under  Section  15  or  Section  16,  and  such  change  or

development is capable of yielding betterment income to the owner,

the Planning Authority may levy a prescribed fees not  exceeding

one third of the increase in the value of the land or building in the

prescribed  manner  for  permitting  such  use  or  development.   In

exercise  of  its  powers  under  Section  10,  the  Planning  Authority

declared  its  intention  of  making  ODP  by  a  notification  dated

29.03.1996 which was made public.  The authority resolved to adopt

the relevant government orders with regard to charge of betterment

fees dated 05.08.1996.   

18. Section  18  of  the  KTCP  Act  confers  the  power  upon  the

Planning Authority to collect betterment fee where permission for a

change in the use or development of the land or building is granted

under Section 15 or Section 16 and such change or development is

capable  of  yielding  a  better  income  to  the  owner,  the  Planning

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Authority may levy a prescribed fee not exceeding one-third of the

estimated  increase  in  the  value  of  the  land  or  building  in  the

prescribed  manner  for  permitting  such  change  in  use  or

development.  Section 18 of the KTCP Act reads as under:-

Section 18. Recovery of a fee in certain cases of permission for change in the use of land or building.-  

[(1) Where permission for change of land use or development of land or building is granted under section 14-A or section 14-B or Section  15  or  Section  17  and  such  change  or  development  is capable  of  yielding  a  better  income  to  the  owner,  the  Planning Authority may levy a prescribed fee not exceeding one-third of the estimated  increase  in  the  value  of  the  land  or  building  in  the prescribed  manner  for  permitting  such  change  of  land  use  or development of land or building.]

……

[(3)  The State Government  may exempt  any Board,  Authority  or body constituted by or under any law owned or controlled by the State  Government  or  Central  Government  or  an  infrastructure Project promoted or implemented by any Company or person and approved by the State Government or Central Government from the payment of fee specified under sub-section (1).

19. The  non-obstante clause in  Section 76-M of  the KTCP Act

reads as under:-

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

(2) Notwithstanding anything contained in any such other law,-  

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

(b) when permission for such development has not been obtained under  this  Act,  such  development  shall  not  be  deemed  to  be

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lawfully undertaken or carried out by reason only of the fact that permission, approval or sanction required under such other law for such development has been obtained.”

20. The purpose of Karnataka Industrial Areas Development Act,

as seen from the Preamble of the Act, is to make special provisions

for securing the establishment or industrial areas in the State and

generally to promote the establishment and orderly development of

the industries therein and for  that  purpose to  establish  Industrial

Areas Development Board.  The Preamble of the KIAD Act reads as

under:-

“An Act to make special provision for securing the establishment of industrial areas in the State of Karnataka and generally to promote the establishment and orderly  development of  industries therein, and for that purpose to establish an Industrial Areas Development Board and for purposes connected with the matters aforesaid.  

Whereas  it  is  expedient  to  make  special  provision  for securing  the  establishment  of  industrial  areas  in  the  State  of Karnataka  and  generally  to  promote  the  establishment  and  the orderly development of industries in such industrial areas, and for that purpose to establish an Industrial Areas Development Board and for purposes connected with the matters aforesaid.”

21. As per Section 27 of the KIAD Act, the provisions of the Act

shall apply to such areas from such date as have been notified by

the  State  Government  under  sub-section  (3)  of  Section  1.

Section 47 is the non-obstante clause of KIAD Act which reads as

under:-

“Section 47 – Effect of provisions inconsistent with other laws –  The  provisions  of  this  Act  shall  have  effect  notwithstanding anything inconsistent therewith contained in any other law.”

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22. By careful reading of the provisions of both the Acts, it is seen

that the object of KIAD Act is to make special provisions for securing

the establishments of industrial areas in the State and to generally

promote  the  establishment  and  orderly  development  of  the

industries.  On the other hand, KTCP Act is for regulation of planned

growth  of  land  use  and  development  and  for  the  making  and

execution of town planning schemes in the State.  Both the Acts i.e.

KIAD Act and KTCP Act operate 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  once a land is  acquired for  the

purpose of  industries under  the KIAD Act  and made over  to  the

Board, the use of the land becomes ‘use for industrial purpose’ and

no further permission for change of use of land by KTCP or any

other authority is required.

23. Though heading of Section 18 of the KTCP Act is “Recovery

of a fee in certain cases of permission for change in the use of

land  or  building”,  the  levy  of  prescribed  fee  is  not  only  for

permission for change of land use but also for development of land

or building as contemplated under Section 14A or Section 14B or

Section  15  or  Section  17  of  the  Act.   As  pointed  out  earlier,

“development” is defined in Section 2(1-c) of KTCP Act which inter

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alia provides for “in the use of any building or land and includes

sub-division of any land”.  From a combined reading of Section 18

with  Section  2(1-c)  of  KTCP  Act,  it  is  clear  that  the  levy  of

prescribed fee under Section 18 of the Act is not merely for change

of  land  use  but  also  for  development  of  land  or  building.   The

language  of  expression  used  in  Section  18  that  “permission  for

change of land used…..” and “development of land or building….” is

to be interpreted in the light of the object of KTCP Act as enunciated

in 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  for

exclusion of operation of other laws in respect of industrial areas.

Section  16(C)  provided  that  the  State  Government  may  by

notification provide that the provisions of any other law relating to

local authority which is in force in that area shall cease to apply and

thereupon such provision was ceased to apply thereto.  In exercise

of such powers, the State Government issued the Circular  dated

31.12.1990  directing  Urban  Development  Authorities,  City

Improvement Trust Boards, Planning Authorities not to collect the

betterment  charges  from  the  statutory  bodies  like  Karnataka

Housing Board and KIADB.  Section 16 of the KIAD Act was omitted

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by Act 11 of 1997 (with effect from 19.02.1997). Subsequently by

the government order dated 17.07.1997, the above Circular dated

31.12.1990 was revoked  and the  authorities  above  named have

been directed to collect the betterment charges as per law.

25. The learned senior counsel for the appellant has drawn our

attention to the Minutes of the Meeting held on 04.12.1999 where

the question of levy of fees by KTCP in the Bangalore Metropolitan

Region came up for discussion.  The said meeting was attended by

various  authorities  including  the  Finance  Department,

Commissioner  of  KIADB,  Director  of  Town  Planning  etc.   After

detailed discussion, the following decisions 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  Government Commerce  &  Industries  Department  and  Secretary,  Law Department  would  examine  all  aspects  pertaining  to constitution  of  Industrial  Townships  in  identified  industrial areas and come up with firm proposals by end of December, 1999.

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

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

4. The  matter  regarding  delegation  of  powers  to  KIADB  for granting approvals for building plans for industrial units to be established in approved industrial areas will be examined by the  Urban  Development  Department  and  if  necessary suitable  amendments  would  be effected to  the  concerned Town Planning Act; and

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5. Principal Secretary to Government Commerce & Industries Department will organize a meeting of major industries who had not yet paid certain charges and fee and try to sort out the  matter  in  consultation  with  the  Urban  Development Department;

Concluding the discussions, the Minister for Large & Medium Industries and Infrastructure Development informed that the main  objective  of  constituting  industrial  townships  was  to simplify  and  streamline  the  procedures  and  ensure  that approvals and also ensure  that  these industrial  areas are maintained properly which at present are in a sorry state of affairs.  He  suggested  that  a  proper  revenue  sharing mechanism between township authority and concerned local bodies should be worked out to ensure that the local bodies are also strengthened and take development works outside the industrial area. In view of the inordinate delay in fulfilling the commitments which had been made in the 1993 policy he  requested  that  all  concerned  departments  should  take immediate  action  to  formulate  a  proposal  which  is acceptable to all the departments.” [Underlining added]

When the government of Karnataka, Finance Department and other

departments and also the Commissioner for Industrial Development

and other departments have participated in the abovesaid meeting

and were all parties to the above decisions, it is not open to KIADB

to resile from the minutes and put forth claim contrarily.   Having

been a party to the discussion in the meeting held on 04.12.1999,

the State of Karnataka is also not justified in contending that the

lands in question are included in the industrial area declared by the

State Government and hence, not bound to pay the development

fee under Section 18 of the Act.

26. It was stated by the learned senior counsel for the appellant

that  the State  of  Karnataka has not  filed its  counter  in  the High

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Court.  It is also to be pointed out that after dismissal of the writ

petition by the Single Judge, a writ appeal was preferred only by the

first  respondent.   The  State  of  Karnataka  has  neither  filed  any

appeal  nor  made its  stand  clear  before  the  High  Court.   In  the

Supreme Court also, the State of Karnataka has not filed its counter

affidavit.  Only at the time of arguments, the State of Karnataka has

filed written submissions stating that the provisions of the KTCP Act

are not attracted to the industrial area covered under KIAD Act and

that Section 18 of the Act will have no application and hence, no fee

could be levied thereunder.  In its written submissions, the stand

taken by the State of Karnataka reads as under:-

“……It is stated that in the present case, the lands in question are included in the industrial area declared by the State Government and  the  change  in  the  land  use  and  development  thereof  are governed by the provisions contained under Karnataka Industrial Areas Development Act, 1966 Sections 14 and 15 of the Karnataka Town and Country Planning Act, 1961 are not at all attracted and consequently Section 18 thereof will  have no application to such lands and hence no fee could be levied there under by respondent No.4 and the petitioner…..”

Since the State of Karnataka has not made its stand clear before

the High Court nor any counter affidavit sworn in by any responsible

officer of the State of Karnataka has been filed, we are not inclined

to go into the merits of the stand taken by State of Karnataka in its

written submissions.   More so,  when the State is  a party  to  the

meeting held on 04.12.1999 and concern expressed in the meeting

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as to the non-payment of development charges and the decisions

taken thereon.  The State appears to have been sitting over the

fence and watching its  two key authorities  under  KTCP Act  and

KIAD Act litigating.  

27. Section  14  read  with  Section  18  of  the  KTCP Act  clearly

connotes that the Planning Authority is entrusted with the function of

granting licence to put up construction on the land including the 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 declares that the provisions of

the  said  Act  and  the  Rules,  Regulations  and  Bye-Laws  made

thereunder shall have effect notwithstanding anything inconsistent

contained in any other law.  There is nothing in the provisions of this

Act to exclude or exempt the lands which are covered by the KIAD

Act.

28. In its lengthy judgment, the High Court inter alia observed that

the very acquisition for the industrial areas and the development by

KIADB by itself involve the change of land use and the development

by the KIADB and while so, seeking permission for change of land

use and its development under the KTCP Act will be superfluous.

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The relevant findings of the High Court in the impugned judgment

are as under:-

 So far as the land acquired under KIAD Act and utilised for

industrial  purpose and development  thereof  will  have to  be

made by the Board in the area declared under the Act as an

industrial area.  The industrial activities in the industrial area

are  developed and  controlled  by  the  KIADB in  accordance

with the provisions of KIAD Act and it is a part of functions of

KIADB;

 The non-obstante clause-Section 47 of KIAD Act excludes the

application of the provisions of any other Act;

 The industrial activities in the industrial  area, however, shall

not contravene other laws and it  shall  be in conformity with

Zoning  Regulations  and  the  Planning  Authority  constituted

under the KTCP Act.  The submission of plan to the appellant-

Authority  is  only  to  ensure  that  the  establishment  of  the

industrial  unit  by  the  allottee  in  the  industrial  area  is  in

conformity with the Zonal  Regulations.  Only for this limited

purpose, the allottee of the industrial plot must submit its plan

to the Planning Authority constituted under the KTCP Act for

the purpose of obtaining NOC;

 For granting approval and for issuance of NOC, the Planning

Authority under KTCP Act cannot levy betterment fee under

Section  18  of  the  KTCP  Act  because  the  allottee  of  an

industrial plot does not seek for a change in the land use or

development of the said land.  There was already a change of

land use and its development as an industrial unit which is the

function of  the Board constituted under  the Special  Act  i.e.

KIAD Act; and

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 When the entrepreneurs do not seek for change in land use

and its development within the meaning of Sections 14 and 15

of the KTCP Act, the question for levying any fee for change of

land use under Section 18 of the Act will not arise.

29. The High Court, on the one hand, took the view that Sections

14, 15 and 18 of KTCP Act are not applicable to the industrial area

which is governed by KIAD Act. On the other hand, the High Court

held that for compliance of the provisions of Sections 14 and 15 of

the KTCP Act  for  all  the establishment  of  the industrial  unit,  the

allottee has to seek approval of the Planning Authority constituted

under  KTCP Act  and  KTCP is  to  scrutinise  the  plan  and  other

documents so as to ensure that the establishment of the industrial

unit by the allottee in the industrial area is in conformity with the

Zonal Regulations etc; but KTCP is not to levy betterment fee. The

findings of the High Court are self-contradictory to each other.

30. As discussed earlier, the Planning Authority constituted under

KTCP Act is entrusted with the functions of granting approval for

any development on the land within its jurisdiction including the land

acquired and allotted by the Board under KIAD Act.  Per contra, the

enactment of KIAD Act is to make special provision for securing the

establishment of the industrial area in the State and for that purpose

to establish Industrial Areas Development Board.  The provisions of

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both the Acts make the intention of the legislature very clear.  As

rightly submitted by the learned senior counsel for the appellant that

if there are two possible interpretations of an enactment, one should

avoid the construction which would reduce the legislation to futility

and should rather accept the broader interpretation.   A statute is

designed to be workable and the interpretation thereof by the court

should be to secure that object.  In so far as the “industrial area”

allotted by KIADB, the interpretation given by the High Court to the

provisions of KTCP Act would render the existence of the Planning

Authority like the appellant to futility.  While on the one hand, the

High Court has directed the first respondent to obtain permission

from the Planning Authority under KTCP Act and that the appellant-

Authority to scrutinise those plans only to ensure that they are in

conformity with the Regulations etc.  At the same time, the High

Court  is  saying  that  the  appellant-Authority  cannot  collect  the

betterment  fees.  In  our  considered  view,  such  findings  are

contradictory to each other and cannot be sustained.

31. The High Court held that KIAD Act being a Special Act, the

same will prevail over KTCP Act which is a General Act.  KTCP Act

is  applicable to all  the developmental  activities in respect  of  any

land coming within the area of  Outline Development  Plan (ODP)

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and the lands in question even though situated in industrial  area

comes  within  the  area  of  ODP of  the  Planning  Authority.   The

developmental activities over the said land have to be carried on

only with the permission of the Authority and both the enactments

have to be harmoniously construed so as to give effect to each of

the Acts enacted by the State Government.   

32. The question to be considered in this regard is whether KIAD

Act is a special enactment and KTCP Act a general Act and whether

the maxim  ‘Generalia Specialibus Non Derogant’ is applicable as

held by the High Court. Rule of interpretation says that a statute is

best interpreted when we know why it was enacted, which can be

seen from the preamble of an Act. As discussed earlier, as per the

preamble of the KIAD Act, it is an Act to make special provision for

securing  the  establishment  of  industrial  areas  in  the  State  of

Karnataka and generally to promote the establishment and orderly

development of industries therein. KTCP Act on the other hand, as

we  have  pointed  out  earlier,  was  enacted  to  provide  for  the

regulation of planned growth of land use and development and for

the making and execution of town planning schemes in the State of

Karnataka.  Thus,  considering  the  legislative  intent  of  the  two

enactments,  it  is  seen  that  there  is  nothing  in  the  KIAD  Act  to

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destroy the authority of the Appellant which has its own assigned

role to perform under the provisions of the KTCP Act. Considering

the object and purpose for which both the Acts were enacted, there

is no inconsistency or overlapping between the two enactments and

the power of authorities constituted under the Acts. As the areas of

operation of KIAD Act and KTCP Act are wholly different, there is no

question of  applicability  of  the maxim  Generalia Specialibus Non

Derogant.

33. Seeking  grant  of  permission  for  construction  of  industrial

buildings  –  Bulk  Cement  Terminal  near  Dodaballapur  Railway

Station,  the  first  respondent  submitted  its  application  to  the

appellant-Authority  on  08.06.1998.   On  that  application  for

sanctioning the development plan consisting of the plan of storage,

packing and administrative office buildings in the plot in question,

the  appellant-Authority  vide order  dated  17.09.1988  levied

betterment  charges,  road  charges etc.  of  Rs.1,48,29,173/-  under

various heads.  In response to the same, the first respondent has

sent its reply on 16.10.1998 inter alia stating that:- (i) since the first

respondent has made payment to KIADB towards allotment of lands

considering the first respondent as commercial establishment and

levy of development at the rate of Rs.75/- per sq. mtr. may not be

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necessary; (ii)  the construction put up by the first respondent are

industrial buildings and not commercial establishments; and (iii) the

first respondent is situated in Bengaluru Rural (North) District and it

is not situated in Bengaluru Urban District attracting levy of such

higher fee.

34. By careful  perusal  of  the first  respondent’s  response dated

16.10.1998, it is seen that the first respondent has not challenged

the jurisdiction of appellant-Authority to levy betterment charges and

that  the  objections  that  the  first  respondent  has  raised  were

regarding the rate of betterment fee treating the first respondent as

commercial  establishment  and  the  fact  that  they  are  situated  in

Bengaluru Rural (North) District and not in Bengaluru Urban District.

When the first respondent has not raised the objection regarding the

jurisdiction/competence of the appellant-Authority to levy betterment

fee,  the  first  respondent  was  not  justified  in  turning  around and

challenging the powers of the appellant-Planning Authority to levy

betterment charges.  The High Court, in our view, did not properly

consider the response of the first respondent and the High Court

erred  in  saying  that  the  role  of  KTCP is  only  to  scrutinise  the

application  to  ensure  that  the  plan  is  in  conformity  with  the

provisions of the KTCP Act and that it cannot levy the fee.

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35. It is also pertinent to note that for obtaining sanction of their

plan, the other allottees of industrial plots by KIADB have paid the

betterment charges and also the road cess as demanded by the

appellant-Authority.  In this regard, the learned senior counsel for

the appellant has drawn our attention to the communication from

ITC Limited including the Pay Order dated 01.08.1997 for payment

of betterment charges of Rs.3,01,71,600/-.  When other allottees of

industrial plots by KIADB have paid betterment charges and road

cess for obtaining sanction of the plan, the first respondent cannot

challenge the levy and contend that they are not liable to pay the

betterment charges.

36. The High Court, in our view, ignored the important provisions

of KTCP i.e. Sections 14 and 15 regarding the development act and

the development activities including the industrial areas fall  within

the scope of the appellant-Authority and that the first  respondent

while obtaining the approval from the appellant-Authority for its plan

is  bound  to  pay  the  betterment  charges,  road  cess  and  other

charges as per  the laws.   The learned Single  Judge has rightly

dismissed  the  writ  petition  filed  by  the  first  respondent  and  the

Division  Bench  erred  in  reversing  the  same  and  the  impugned

judgment is liable to be set aside.   

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37. In the result, the impugned judgment of the High Court is set

aside and this appeal is allowed.  The first respondent is directed to

pay Rs.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 months from this date, failing which the respondent is liable to

pay  the  interest  at  the  rate  of  12%  thereafter  on  the  accrued

amount.  

…………….……………J.  [R. BANUMATHI]

…………….……………J.      [INDIRA BANERJEE]

New Delhi; November 27, 2018

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