Beneficiary capital contribution, water sewerage fees illegal: Karnataka High Court

Bengaluru: The Karnataka High Court has declared the demand for Beneficiary Capital Contribution Charges and Greater Bangalore Water Sewerage Project Charges as illegal.

However, the court has upheld the demand for Advance Probable Pro Rata Charges and Treated Water Charges for Construction, since it has legal support.

Sobha Limited and five others filed the petition. They had approached the BBMP seeking a no-objection certificate (NOC). They were asked to pay Rs 1.1 crore. This includes Rs 54,48,000 towards Beneficiary Capital Contribution Charges, Rs 49,85,548 towards Advance Probable Pro Rata Charges, and Rs 8,30,925 towards Treated Water Charges for construction to the BWSSB before getting the NOC.

The petitioners contended that the authorities cannot charge the fees without quid pro quo, that, too, for issuing an NOC.

The petitioners further submitted that levies are unconstitutional, illegal and in violation of Article 265 of the Constitution of India.

On the other hand, the BWSSB submitted that the Act empowers authorities to demand advance pro rata charges, treated water charges for construction and Greater Bangalore Water Supply and Sewerage Project Charges from anyone applying for an NOC for construction projects.

In his judgement, Justice M Nagaprasanna observed that tax can be imposed on a citizen who is bound to pay it, irrespective of him getting any benefit. “But, when it comes to a fee, the element of quid pro quo becomes sine qua non,” the court said.

110 villages

Regarding levying the Beneficiary Capital Contribution Charges from residents within the newly added 110 villages under the Palike jurisdiction, the BWSSB argued that it was a one-time imposition to cover the Rs 2,500 crore cost exclusively for multi-storeyed buildings. However, the court ruled against this argument, stating that it lacked statutory provisions to support it.

"A parting observation in the circumstances may not be inapt. Hue and cry are so loud by the petitioners that they are not willing to pay any charges, as they are not receiving any benefit from the board.

"...sewerage is also a service by the board. If the board does not maintain sewerage, it would undoubtedly result in chaos.

"But the board also cannot impose imposts contrary to the law," Justice Nagaprasanna said.

What are these charges? An explainer      

The Bangalore Water Supply and Sewerage Board (BWSSB) has been levying the Greater Bangalore Water Sewerage Project Charges since 2008. This is applicable to the seven City Municipal Corporations and one Town Municipal Corporation that were added to the Bruhat Bengaluru Mahanagara Palike (BBMP) in 2007.

The charges range from Rs 5,000 to Rs 24,000, depending on the area of the property.

Similarly, the Beneficiary Contribution Charges (BCC) is applicable to the 110 villages on the city’s periphery that were added to the BBMP limits in 2008. The BCC starts at Rs 5,000 for a residential house measuring up to 600 sq ft and increases depending on the number of floors and area.

Both these are one-time charges to be paid while applying for a water connection.

The BWSSB claimed that the charges were approved by the government and were levied to ease the financial burden on the BWSSB. The BWSSB has spent over Rs 5,000 crore to provide water to these areas and these charges were levied considering the huge infrastructure to be put in place for the water supply to begin.