BANGALORE DEVELOPMENT AUTHORITY versus THE AIR CRAFT EMPLOYEES COOPERATIVE SOCIETY LTD. AND OTHERS

31. We shall first deal with the question whether the area in which the respondents have formed layouts fall within the Bangalore Metropolitan Area. In the impugned order, the Division Bench has recorded brief reasons for negating the respondents' challenge to Notification dated 1.3.1988. The conclusion recorded by the Division Bench and similar view A expressed by another Division Bench of the High Court in the Commissioner, Bangalore Development Authority v. State of Karnataka ILR 2006 KAR 318 will be deemed to have been approved by the three Judge Bench of this Court in Bondu Ramaswamy v. Bangalore Development Authority (2010) 7 B SCC 129, which referred to Notifications dated 1.11.1965 and 13.3.1984 issued under Section 4A(1) of the Town Planning Act and Notification dated 1.3.1988 issued under Section 2(c) of the 1976 Act and observed: c "A careful reading of the Notification dated 1-3-1988 would show that the clear intention of the State Government was to declare the entire area declared under the Notification dated 1-11-1965 and the Notification dated 13-3-1984, together as the Bangalore Metropolitan Area. The Notification dated 1-3-1988 clearly states that the entire area situated within the boundaries indicated in Schedule II to the Notification dated 13-3-1984 was the area for the purpose of Section 2(c) of the BOA Act. There is no dispute that the boundaries indicated in Schedule II to the Notification dated 13-3-1984 would include not only the villages enumerated in First Schedule to the Notification dated 13-3-1984 but also the area that was declared as planning area under the Notification dated 1-11-1965. This is because the areas declared under Notification dated 1- 11-1965 are the core area (Bangalore City) and the area surrounding the core area that is 218 villages forming the first concentric circle; and the area declared under the Notification dated 13-3-1984 (325 villages) surrounding the area declared under the Notification dated 1-11-1965 forms the second concentric circle. Therefore, the boundaries of the lands declared under the Notification dated 13-3-1984, would also include the lands which were declared under the Notification dated 1-11-1965 and therefore, the 16 villages which are the subject-matter of the impugned acquisition, are part of the Bangalore Metropolitan Area. BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 939 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] The learned counsel for the appellants contended that the note at the end of Second Schedule to the Notification dated 13-3-1984 excluded the Bangalore City Planning Area declared under the Notification dated 1-11-1965. As the planning area that was being declared under the Notification dated 13-3-1984 was in addition to the area that was declared under the Notification dated 1-11-1965, it was made clear in the note at the end of the Notification dated 13-3-1984 that the area declared under the Notification dated 1-11-1965 is to be excluded. The purpose of the note was not to exclude the area declared under the Notification dated 1-11-1965 from the local planning area. The intention was to specify what was being added to the local planning area declared under the Notification dated 1-11-1965. But in the Notification dated 1-3-1988, what is declared as the Bangalore Metropolitan Area is the area, that is, within the boundaries indicated in Schedule II to the Notification dated 13-3-1984, which as noticed above is the area notified on 1-11-1965 as also the area notified on 13-3-1984. The note in the Notification dated 13-3-1984 was only a note for the purposes of the Notification dated 13-3-1984 and did not form part of the Notification dated 1-3-1988. There is therefore no doubt that the intention of the State Government was to include the entire area within the boundaries described in Schedule II, that is, the area declared under the two Notifications dated 1-11-1965 and 13-3-1984, as the Bangalore Metropolitan Area. In fact ever since 1988 everyone had proceeded on the basis that the Bangalore Metropolitan Area included the entire area within the boundaries mentioned in Schedule II to the Notification dated 13-3-1984. Between 1988 and 2003, BOA had made several development schemes for the areas in the first concentric circle around Bangalore City (that is, in the 218 villages described in First Schedule to the Notification dated 1-11-1965) and the State Government had sanctioned them. None of those were challenged on the ground that the area was not part of Bangalore Metropolitan Area." The Bench then considered the argument that the language of B notification dated 1.3.1988 cannot lead to a conclusion that the areas specified in the Schedule were made part of the Bangalore Metropolitan Area, referred to the doctrine of casus omissus, the judgment of the Constitution Bench in Padma Sundara Rao v. State of T. N. (2003) 5 SCC 533 and C proceeded to observe: "Let us now refer to the wording and the ambiguity in the notification. Section 2(c) of the BDA Act makes it clear that the city of Bangalore as defined in the Municipal Corporation Act is part of Bangalore Metropolitan Area. It also makes it clear that the areas where the City of Bangalore Improvement Act, 1945 was i;i force, is also part of Bangalore Metropolitan Area. It contemplates other areas adjacent to the aforesaid areas being specified as part of Bangalore Metropolitan Area by a notification. Therefore, clearly, the area that is contemplated for being specified in a notification under Section 2(c) is "other areas adjacent" to the areas specifically referred to in Section 2(c). But it is seen from the Notification dated 1- 3-1988 that it does not purport to specify the "such other areas adjacent" to the areas specifically referred to in Section 2(c), but purports to specify the Bangalore Metropolitan Area itself as it states that it is specifying the "areas for the purpose of the said clause". If the notification specifies the entire Bangalore Metropolitan Area, the interpretation put forth by the appellants that only the villages included in Schedule I to the Notification dated 13- 3-1984 would be the Bangalore Metropolitan Area, would result in an absurd situation. Obviously the city of Bangalore and the adjoining areas which were notified under the City of Bangalore Improvement Act, 1945 are BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT941 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] already included in the Bangalore Metropolitan Area and the interpretation put forth by the appellants would have the effect of excluding those areas from the Bangalore Metropolitan Area. As stated above, the core area or the inner circle area, that is, Bangalore City, is a part of Bangalore Metropolitan Area in view of the definition under Section 2(c). The 218 villages specified in the Notification dated 1-11-1965 are the villages immediately surrounding and adjoining Bangalore City and it forms the first concentric circle area C around the core area of Bangalore City. The 325 villages listed in First Schedule to the Notification dated 13-3-1984 are situated beyond the 218 villages and form a wider second concentric circle around the central core area and the first concentric circle area of 218 villages. That is why the Notification dated 1-3-1988 made it clear that the D Bangalore Metropolitan Area would be the area within the boundaries indicated in Second Schedule to the Notification dated 13-3-1984. It would mean that the three areas, namely, the central core area, the adjoining 218 villages constituting the first concentric circle area and the next adjoining 325 villages forming the second concentric circle are all included within the Bangalore Metropolitan Area. What is already specifically included by Section 2(c) of the BDA Act cannot obviously be excluded by Notification dated 1-3-1988 while purporting to specify the additional areas adjoining to the areas which were already enumerated. Therefore, the proper way of reading the Notification dated 1-3-1988 is to read it as specifying 325 G villages which are described in the First Schedule to the Notification dated 13-3-1984 to be added to the existing metropolitan area and clarifying that the entire areas within the boundaries of Second Schedule to the Notification dated 13-3-1984 would constitute the Bangalore Metropolitan Area. There is no dispute that the boundaries indicated in the Notification dated 13-3-1984 would clearly include the 16 villages which are the subject-matter of the acquisition."

32. In view of the judgment in Bondu Ramaswamy v. Bangalore Development Authority (supra), we hold that the villages specified in the schedules appended to Notifications dated 1.11.1965 and 13.3.1984 form part of the Bangalore Metropolitan Area. The question whether the BOA has lost territorial jurisdiction over the area in which the House Building Societies have formed layouts need not be decided because the learned counsel for the respondents did not challenge the observations made by the Division Bench of the High Court.

33. We shall now consider the following core questions: (1) whether Section 32(5A) of the 1976 Act is violative of Article 14 of the Constitution; (2) whether Section 32(5A) of the 1976 Act suffers from the vice of excessive delegation of legislative power; (3) whether the demand of charges under the Cauvery Scheme etc. amounts to tax and is, therefore, ultra vires the provisions of Article 265 of the Constitution; and (4) whether the BOA has collected charges from the house building societies and the allottees of sites of the layouts prepared by it far in excess of its contribution towards the Cauvery Scheme, MRTS, etc. Question (1)

34. Shri Altaf Ahmed, learned senior counsel appearing H for the BOA and Shri Sanjay R. Hegde, learned counsel for the BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 943 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] State of Karnataka argued that Section 32(5A) is not violative A of Article 14 of the Constitution inasmuch as it does not operate unequally qua the allottees of the sites of the layouts prepared by the house building societies on the one hand and the BOA layouts on the other hand. Learned counsel emphasised that the allottees of sites in the BOA layouts which were carved out B after 20.06.1987 have been burdened with the liability to pay charges for the Cauvery Scheme as well as Ring Road and no discrimination has been practiced between the two sets of allottees. Learned senior counsel Shri Altaf Ahmed submitted that even otherwise there is no comparison between the BOA c layouts which were formed by spending substantial public funds and the private layouts prepared by the house building· societies. Learned counsel referred to the additional affidavit of Shri Siddaiah to show that Rs. 34.55 crores were collected by the BOA between 1988 and 2005 both from the private 0 layouts as well as the BOA sites and the entire amount has been paid to BWSSB in lieu of the BDA's share in the Cauvery Scheme.

35. Shri K.K. Venugopal and Shri P. Vishwanatha Shetty, learned senior advocates and Shri R.S. Hegde and other E learned counsel appearing for the respondents supported the conclusion recorded by the High Court that Section 32(5A) is violative of Article 14 of the Constitution by emphasizing that the impugned provision has resulted in hostile discrimination between the allottees of sites in the layouts of the house building societies and other people living in the Bangalore Metropolitan Area. Learned counsel submitted that while the benefit of the Cauvery Scheme, Ring Road, etc. will be availed by all the residents of the Bangalore Metropolitan Area, the cost of amenities have been loaded exclusively on the allottees of the G sites of the private layouts and to some extent the BOA layouts and in this manner similarly situated persons have been discriminated. Shri Venugopal referred to the averments contained in paragraphs 4 to 6 of the amendment application filed in Writ Petition No. 11144/1993 to drive home the point H that the BOA has loaded its share towards the Cauvery Scheme and Ring Road exclusively on the allottees of the private layouts leaving out the remaining population of the Bangalore Metropolitan Area.

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 C 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.

37. In Charanjit Lal Chowdhuri v. Union of India (1950) 1 SCR 869, this Court enunciated the rule of presumption in favour of constitutionality of the statute in the following words: "Prima facie, the argument appears to be a plausible one, but it requires a careful examination, and, while examining it, two principles have to be borne in mind:- (1) that a law may be constitutional even though it relates to a single individual, in those cases where on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; (2) that it is the accepted doctrine of the American courts, which I consider to be well-founded on principle, that the presumption is always in favour of the constitutionality of an enactment, and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. A clear enunciation of this latter doctrine is to be found in Middleton v. Texas Power and Light Company 248 U.S. 152, 157, in which the relevant passage runs as follows: "It must be presumed that a legislature understands and BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 945 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.} correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based upon adequate grounds."" (emphasis supplied)

38. In M.H. Quareshi v. State of Bihar (1959) 1 SCR 629, this Court observed: "The Courts, it is accepted, must presume that the legislature understands and correctly appreciates the c needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds. It must be borne in mind that the legislature is free to recognise degrees of harm and may confine its restrictions to those o cases where the need is deemed to be the clearest and finally that in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge, matters of common report, the history of the times, and may assume every state of facts which can be conceived existing at the time of legislation."

39. In Ram Krishna Dalmia v. Justice S.R. Tendolkar (supra), to which reference has been made in the impugned order, this Court laid down various propositions including the following: "(b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (e) that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation;"

40. In R.K. Garg v. Union of India (1981) 4 SCC 675 the 8 Constitution Bench reiterated the well-settled principles in the following words: "While considering the constitutional validity of a statute said to be violative of Article 14, it is necessary to bear in mind certain well established principles which have been evolved by the courts as rules of guidance in discharge of its constitutional function of judicial review. The first rule is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. This rule is based on the assumption, judicially recognised and accepted, that the legislature understands and correctly appreciates the needs of its own people, its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds. The presumption of constitutionality is indeed so strong that in order to sustain it, the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation."

41. 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 G 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.

42. While examining the issue of hostile discrimination in BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 947 EMPLOYEES COOP. SOCIETYtID". [G.S. SINGHVI, J.] the context of Section 32(5A), the Court cannot be oblivious of the fact that due to unprecedented increase in the population of the Bangalore City and the policy decision taken by the State Government to encourage house building societies to form private layouts, the BOA was obliged to take effective measures to improve the civic amenities like water supply, electricity, roads, transportation, etc. within the Bangalore Metropolitan Area and for this it became necessary to augment the resources by the BOA itself or through other State agencies/ instrumentalities by making suitable contribution. It would be a matter of sheer speculation whether in the absence of increase c in the population of the Bangalore Metropolitan Area and problems relating to planned development, the legislature would have enacted the 1976 Act and the State and its agencies/ instrumentalities would have spent substantial amount for augmenting water supply, electricity, transportation and other amenities. However, the fact of the matter is that with a view to cater to the new areas, and for making the concept of planned development a reality qua the layouts of the private House Building Societies and those involved in execution of large housing projects, etc., the BOA and other agencies/ instrumentalities of the State incurred substantial expenditure for augmenting the water supply, electricity, etc. There could be no justification to transfer the burden of this expenditure on the residents of the areas which were already part of the city of Bangalore. In other words, other residents could not be called upon to share the burden of cost of the amenities largely meant for newly developed areas. Therefore, it is not possible to approve the view taken by the High Court that by restricting the scope of loading the burden of expenses to the allottees of the sites in the layouts developed after 1987, the legislature violated Article 14 of the Constitution. Question (2)

43. Learned senior counsel for the BOA and the counsel appearing for the State assailed the finding recorded by the A High Court that Section 32(5A) is a piece of excessive delegation by pointing out that while the sums specified in Section 32(5) are required to be deposited by those intending to form an extension or layout to meet the expenditure for making roads, side-drains, underground drainage and water B supply, lighting etc., the amount required to be deposited under Section 32(5A) is meant for developing the infrastructure necessary for augmenting the supply of water, electricity, construction of roads, etc., which are an integral part of the concept of planned development. Learned counsel emphasised c that the policy of the legislation is clearly discernable from the Preamble of the 1976 Act and its provisions in terms of which the BOA is required to ensure planned development of the Bangalore Metropolitan Area. Both, Shri Ahmed and Shri Sanjay R. Hegde submitted that Section 32(5A) does not confer 0 unbridled and unguided power upon the BOA and by using 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" and the legislature has provided sufficient guidance for exercise of power by the BOA. In support of this argument, learned counsel relied upon E the judgments in Municipal Board, Hapur v. Raghuvendra Kripal and others (1966) 1 SCR 950, Corporation of Calcutta and another v. Liberty Cinema (1965) 2 SCR 477 and Bhavesh D. Parish and others v. Union of India and another (2000) 5 sec 471.

44. Shri K. K. Venugopal, Shri P. Vishwanatha Shetty, learned senior counsel and other learned counsel appearing for the respondents reiterated the argument made before the High Court that Section 32(5A) suffers from the vice of G excessive delegation because the legislature has not laid down any policy for recovery of cost of infrastructure required for augmentation of supply of water, electricity, roads, transportation, etc. Learned senior counsel referred to the averments contained in the amended writ petitions to show that H the cost of additional infrastructure is recovered only from those BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 949 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] who apply for sanction of private layouts and there is no provision for distribution of liability by creating demand on others including those to whom sites are allotted in the BOA layouts. Shri Venugopal referred to Sections 15 and 16 of the Act to show that the BOA is required to prepare development scheme and execute the same and argued that the cost of the scheme cannot be loaded only on the private layouts. Learned counsel relied upon the judgments in Daymond v. South West Water Authority (1976) 1 All England Law Reports 39, The State of West Bengal v. Anwar Ali Sarkar (1952) SCR 284, Devi Das Gopal Krishnan and Ors. v. State of Punjab and Ors. (supra) and A.N. Parasuraman and others v. State of Tamil Nadu (1989) 4 sec 683 to support the conclusion recorded by the High Court that Section 32 (5A) is a piece of excessive delegation.

45. The issue relating to excessive delegation of legislative powers has engaged the attention of this Court for the last more than half century. In Devi Das Gopal Krishnan and Ors. v. State of Punjab and Ors. (supra), Kunnathat Thathunni Moopil Nair v. State of Kera/a ( 1961) 3 SCR 77 and A.N. Parasuraman and others v. State of Tamil Nadu (supra), the Court did not favour a liberal application of the concept of delegation of legislative powers but in a large number of other judgments including Jyoti Pershad v. the Administrator for the Union Territory of Delhi (supra), Ajay Kumar Banerjee v. Union of India (1984) 3 SCC 127, Maharashtra State Board of S.H_.S.E. v. Paritosh Bhupeshkumar Sheth (1984) 4 SCC 27, Kishan Prakash Sharma v. Union of India (2001) 5 SCC 212 and Union of India v. Azadi Bachao Ando/an (2004) 10 SCC 1, the Court recognized that it is not possible for the legislature to enact laws with minute details to deal with increasing complexities of governance in a political democracy, and held that the legislature can lay down broad policy principles and guidelines and leave the details to be worked out by the executive and the agencies/instrumentalities of the State and that the delegation of the powers upon such authorities to A implement the legislative policy cannot be castigated as excessive delegation of the legislative power.

46. In Jyoti Pershad v. the Administrator for the Union Territory of Delhi (supra), the Court dealt with the question whether Section 19(1) of the Slum Areas (Improvement and 8 Clearance) Act, 1956 which adversely affected the decree of eviction obtained by the landlord against the tenant was a piece of excessive delegation. It was argued that the power vested in the competent authority to withhold eviction in pursuance of orders or decrees of the Court was ultra vires the provisions C of the Constitution. While repelling this argument, the Court referred to the provisions of the 1956 Act and observed: "In the context of modern conditions and the variety and complexity of the situations which present themselves for solution, it is not possible for the Legislature to envisage in detail every possibility and make provision for them. The Legislature therefore is forced to leave the authorities created by it an ample discretion limited, however, by the guidance afforded by the Act. This is the ratio of delegated legislation, and is a process which has come to stay, and which one may be permitted to observe is not without its advantages. So long therefore as the Legislature indicates, in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation is skeletal, or the fact that a discretion is left to those entrusted with administering the law, affords no basis either for the contention that there has been an excessive delegation of legislative power as to amount to an abdication of its functions, or that the discretion vested is uncanalised and unguided as to amount to a carte blanche to discriminate. The second is that if the power or discretion has been conferred in a manner which is legal and constitutional, the fact that Parliament could possibly have made more detailed provisions, could obviously not be a ground for invalidating BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 951 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] the law." (emphasis supplied)

47. In Maharashtra State Board of S.H.S.E. v. Paritosh Bhupeshkumar Sheth, (supra), the Court while dealing with the issue of excessive delegation of power to the Board of Secondary Education observed: "So long as the body entrusted with the task of framing the rules or regulations acts within the scope of the authority conferred on it, in the sense that the rules or regulations C made by it have a rational nexus with the object and purpose of the statute, the court should not concern itself with the wisdom or efficaciousness of such rules or regulations. It is exclusively within the province of the legislature and its delegate to determine, as a matter of o policy, how the provisions of the statute can best be implemented and what measures, substantive as well as procedural would have to be incorporated in the rules or regulations for the efficacious achievement of the objects and purposes of the Act. It is not for the Court to examine E the merits or demerits of such a policy because its scrutiny has to be limited to the question as to whether the impugned regulations fall within the scope of the regulation- making power conferred on the delegate by the statute."

48. In Ajoy Kumar Banerjee v. Union of India (supra), the three Judge Bench, while interpreting the provisions of the General Insurance Business (Nationalisation) Act, 1972, observed: "The growth of legislative power of the executive is a G significant development of the twentieth century. The theory of laissez-faire has been given a go-by and large and comprehensive powers are being assumed by the State with a view to improve social and economic well- being of the people. Most of the modem socio-economic H c legislations passed by the Legislature lay down the guiding principles of the legislative policy. The Legislatures, because of /imitation imposed upon them and the time factor, hardly can go into the matters in detail. The practice of empowering the executive to make subordinate legislation within the prescribed sphere has evolved out of practical necessity and pragmatic needs of the modem welfare State. Regarding delegated legislation, the principle which has been well established is that Legislature must lay down the guidelines, the principles of policy for the authority to whom power to make subordinate legislation is entrusted. The legitimacy of delegated legislation depends upon its being used as ancillary which the Legislature considers to be necessary for the purpose of exercising its legislative power effectively and completely. The Legislature must retain in its own hand the essential legislative function which consists in declaring the legislative policy and lay down the standard which is to be enacted into a rule of law, and what can be delegated in the task of subordinate legislation which by very nature is ancillary to the statute which delegates the power to make it effective provided the legislative policy is enunciated with sufficient clearness or a standard laid down. The courts cannot and do not interfere on the discretion that undoubtedly rests with the Legislature itself in determining the extent of the delegated power in a particular case." (emphasis supplied)

49. In Kishan Prakash Sharma v. Union of India (2001) G 5 SCC 212, the Constitution Bench speaking through Rajendra Babu, J. (as he then was), summed up the principle of delegateq legislation in the following words: "The legislatures in India have been held to possess wide power of legislation subject, however, to certain limitations BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 953 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] such as the legislature cannot delegate essential legislative functions which consist in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of conduct. The legislature cannot delegate uncanalised and uncontrolled power. The legislature must set the limits of the power delegated by declaring the policy of the law and by laying down standards for guidance of those on whom the power to execute the law is conferred. Thus the delegation is valid only when the legislative policy and guidelines to implement it are adequately laid down and the delegate c is only empowered to carry out the policy within the guidelines laid down by the legislature. The legislature may, after laying down the legislative policy, confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the framework of the policy. When the Constitution entrusts the ·duty of law-making to Parliament and the legislatures of States, it impliedly prohibits them to throw away that responsibility on the shoulders of some other authority. An area of compromise is struck that Parliament cannot work in detail the various requirements of giving effect to the enactment and, therefore, that area will be left to be filled in by the delegatee. Thus, the question is whether any particular legislation suffers from excessive delegation and in ascertaining the same, the scheme, the provisions of the statute including its preamble, and the facts and circumstances in the background of which the statute is enacted, the history of the legislation, the complexity of the problems which a modem State has to face, will have to be taken note of and if, on a liberal construction given to a statute, a legislative policy and guidelines for its execution are brought out, the statute, even if skeletal, will be upheld to be valid but this rule of liberal construction should not be carried by the court to the extent of always trying to discover a dormant or latent legislative policy to 'sustain an arbitrary power conferred on the executive." (emphasis supplied)

50. In Union of India v. Azadi Bachao Ando/an (supra), 8 the Court was called upon to consider the constitutionality of the Inda-Mauritius Double Taxation Avoidance Convention, 1983. While rejecting the argument that Section 90 of the Income Tax Act, under which the Treaty is said to have been entered, amounted to delegation of the essential legislative C functions, the Court observed: "The question whether a particular delegated legislation is in excess of the power of the supporting legislation conferred on the delegate, has to be determined with regard not only to specific provisions contained in the relevant statute conferring the power to make rules or regulations, but also the object and purpose of the Act as can be gathered from the various provisions of the enactment. It would be wholly wrong for the court to substitute its own opinion as to what principle or policy would best serve the objects and purposes of the Act; nor is it open to the court to sit in judgment over the wisdom, the effectiveness or otherwise of the policy, so as to declare a regulation ultra vires merely on the ground that, in the view of the court, the impugned provision will not help to carry through the object and purposes of the Act." (emphasis supplied)

51. The principle which can be deduced from the above G 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 H achieved by the particular legislation and the scheme thereof BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 955 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] and that the Court would not sit over the wisdom of the A legislature and nullify the provisions under which the power to implement the particular provision is conferred upon the executive authorities.

52. The policy underlying the 1976 Act is clearly B discernable from the Preamble of the Town Planning Act and the 1976 Act and the objects sought to be achieved by the two legislations, namely, development of the City of Bangalore and areas adjacent thereto. The Town Planning Act was enacted for the regulation of planned growth of land use and development and for the making and execution of town planning C schemes in the entire State including the City of Bangalore. By virtue of Section 67 of the 1976 Act and with the insertion of Section 81-B in the Town Planning Act by Act No.12 of 1976, the BOA became the Local Planning Authority for the local planning area comprising the City of Bangalore with jurisdiction 0 over an area which the City Planning Authority for the City of Bangalore had immediately before the constitution of the BOA and the latter has been empowered to exercise the powers, perform the functions and discharge the duties under the Town Planning Act as if it were a Local Planning Authority constituted for the Bangalore City. In other words, w.e.f. 20.12.1975, i.e., the date on which the 1976 Act was enforced, the BOA acquired the status of a Local Planning Authority as defined in Section 2(7) read with Section 4(C) of the Town Planning Act in respect of the City of Bangalore and thereby acquired the powers which were earlier vested in the Local Planning Authority constituted for the Bangalore City. The objects sought to be achieved by the legislature by enacting the Town Planning Act were to create conditions favourable for planning and replanning of the urban and rural areas in the State so that full G civic and social amenities could be available for the people of the State; to stop uncontrolled development of land due to land speculation and profiteering in land; to preserve and improve existing recreational facilities and other amenities contributing towards the balance use of land and future growth of populated · [2012] 4 S.C.R. areas in the State ensuring desirable standards of environment, health, hygiene and creation of facilities of orderly growth of industry and commerce. The Town Planning Act also envisaged preparation of the town planning schemes and execution thereof by the Planning Authorities constituted for the specified areas. Section 9 (unamended) envisaged preparation of outline development plan incorporating therein the various matters enumerated in Section 12(1), preparation of comprehensive development plara by including the proposal for comprehensive zoning of land use for the planning area; building complete c street pattern indicating major and minor roads, National and State highways and traffic circulation pattern for meeting • immediate and future requirements; areas for new housing and new areas earmarked for future development and expansion. The definition of "development" contained in Section 20) of the 1976 Act is somewhat similar to the one contained in Section 1(c) of the Town Planning Act. Section 14 of the 1976 Act lays down that the objects of the BOA shall be to promote and secure the development of the Bangalore Metropolitan Area and for that purpose, the BOA shall have the power to acquire, hold manage and dispose of movable and immovable property, whether within or outside the area under its jurisdiction. "Bangalore Metropolitan Area" has been defined under Section 2(c) of the 1976 Act. It consists of the following areas: (a) area comprising the City of Bangalore as defined in the City of Bangalore Municipal Corporation Act, 1949 which is now replaced by the Karnataka Municipal Corporations Act, 1976, (b) the areas where the City of Bangalore Improvement Act, 1945 was immediately before the commencement of the 1976 Act in force, and (c) such other areas adjacent to the aforesaid as the Government may from time to time by notification G specify. Section 15 empowers the BOA to draw up detailed schemes and undertake works for the development of the Bangalore Metropolitan Area and incur expenditure for that purpose. It can also take up any new or additional development scheme on its own, subject to the availability of sufficient resources. If a local authority provides necessary funds for BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 957 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] framing and carrying out ,my scheme, then too, the BOA can take up such scheme. Under Section 15(3), which contains a non obstante clause, the Government can issue direction to the BOA to take up any development scheme or work and execute it subject to such terms and conditions as may be specified by it. Section 16 enumerates the matters which are required to be included in the scheme, i.e., the acquisition of land necessary for or affected by the execution of the scheme, laying or relaying of land including construction and reconstruction of buildings and formation and alteration of streets, drainage, water supply and electricity, reservation of land for public parks or c playgrounds and at least 10% of the total area for civil amenities. The development scheme may also provide for raising of any land to facilitate better drainage, forming of open spaces for better ventilation of the area comprised in the scheme or any adjoining area and the sanitary arrangement. Sections 17 to 19 contain the mechanism for finalisation of the scheme and its approval by the State Government as also the acquisition of land for the purposes of the scheme. Sections 20 to 26 provide for levy and collection of betterment tax. Section 27 specifies the time limit of five years from the date of publication of the scheme in the Official Gazette for execution of the scheme as also consequence of non execution. Section 28-A casts a duty on the BDA to ensure proper maintenance, lighting and cleansing of the streets and the drainage, sanitary arrangement and water supply in respect of the streets formed by it. Section 32 provides for formation of new extensions or layouts or making of new private streets, which can be done only after obtaining express sanction from the· BOA and subject to the conditions which may be specified by the BDA. Section 32(5) lays down that the BDA can. call upon the applicant to deposit the sums necessary for meeting the expenditure for making roads, drains, culverts, underground drainage and water supply and lighting and the charges for such other purposes as may be indicated by the BDA, as a condition precedent to the grant of application. Section 32(5A), which also contains a non obstante clause, empowers the BOA to require the applicant [2012) 4 S.C.R. A to deposit additional amount to meet a portion of the expenditure, which the BOA may determine towards the execution of any scheme or work for augmenting water supply, electricity, roads, transportation and such other amenities within the Bangalore Metropolitan Area.

53. The above survey of the relevant provisions of the 1961 and the 1976 Acts makes it clear that the basic object of the two enactments is to ensure planned development of the areas which formed part of the Bangalore Metropolitan Area as on C 15.12.1975 and other adjacent areas which may be notified by the Government from time to time. The BOA is under an obligation to provide "amenities" as defined in Section 2(b) and "civic amenities" as defined in Section 2(bb) of the 1976 Act for the entire Bangalore Metropolitan Area. In exercise of the 0 powers vested in it under Sections 15 and 16, the BOA can prepare detailed schemes for the development of the Bangalore Metropolitan Area and incur expenditure for implementing those schemes, which are termed as development schemes. The expenditure incurred by the BOA in the implementation of the development schemes can be E loaded on the beneficiaries of the development schemes. By virtue of Notifications dated 1.11.1965 and 13.3.1984 issued under Section 4A(1) of the Town Planning Act and notification dated 1.3.1988 issued under Section 2(c) of the 1976 Act, hundreds of villages adjacent to the City of Bangalore were F merged in the Bangalore Metropolitan Area. For these areas, the BOA was and is bound to ·provide amenities like water, electricity, streets, roads, sewerage, transport system, etc., which are available to the existing Metropolitan Area of the City of Bangalore. This task could not have been accomplished by G the BOA alone from its meager fiscal resources. Therefore, the State Government, the BOA and other instrumentalities of the State like BWSSB had to pool their resources as also man and material to augment water supply, electricity and transport facilities and also make provision for construction of new roads, H layouts, etc. The BOA had to contribute to the funds required BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 959 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] for new water supply scheme, generation of additional electri~ity and development of a mass rapid transport system to decongest the Bangalore Metropolitan Area. This is the reason why the State Government passed orders dated 25.3.1987 and 12.1.1993, which could appropriately be treated as directions issued under Section 65 of the 1976 Act for carrying out the purposes of the Act and approved the proposal for loading the BOA's share of expenditure in the execution of the Cauvery Scheme on all the layouts to be formed thereafter. With the insertion of Section 32(5A) in the 1976 Act, these orders acquired the legislative mandate. In terms of that section, the BOA has been vested with the power to call upon the applicants desirous of forming new extensions or layouts or private streets to pay a specified sum in addition to the sums referred to in Section 32(5) to meet a portion of the expenditure incurred for the execution of any scheme or work for augmenting o water supply, electricity, roads, transportation and other amenities.

54. At the cost of repetition, it will· 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 BOA 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 BOA to demand an unspecified amount from those desirous of forming private layouts. It is needless to say that the exercise of power by the BOA 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 A Metropolitan Area and this task had to be delegated to some other agency/instrumentality of the State.

55. The above discussion leads to the conclusion that Section 32(5A) does not suffer from the vice of excessive B 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. Question (3) c

56. The next question which calls for determination is whether the demand of charges under the Cauvery Scheme, etc. amounts to imposition of tax and is, therefore, ultra vires the provision of Article 265 of the Constitution.

57. The debate whether a particular levy can be treated D as 'fee' or 'tax' and whether in the absence of direct evidence of quid pro quo, the levy would always be treated as tax has engaged the attention of this Court and almost all the High Courts for the last more than four decades.

58. In Kewal Krishan Puri v. State of Punjab (1980) 1 SCC 416, the Constitution Bench considered the question whether the resolutions passed by the Agriculture Market Committees in Punjab and Haryana to increase the market fee on the agricultural produce bought and sold by the licensees in the F notified market areas from Rs. 2/- to Rs. 3/- for every Rs. 100/ – were legally sustainable. After noticing the distinction between tax and fee and a large number of precedents, the Constitution Bench culled out the following principles: "(1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose. (2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 961 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] agricultural produce. (3) That while rendering services in the market area for the purposes of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions. (4) That while conferring some special benefits on the licensees it is permissible to render such service in the market which may be in the general interest of all concerned with the transactions taking place in the market. (5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in viilages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them. (6) That the element of quid pro quo may not be possible, or ewen necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee. (7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three-fourths, must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above."

59. The ratio of the aforesaid judgment was substantially diluted in Southern Pharmaceuticals and Chemicals, Trichur and others v. State of Kera/a and others (1981) 4 SCC 391. In the latter decision, the Court considered the constitutional validity of Sections 12-A, 12-B, 14(e) and (f) and 68-A of the B Kerala Abkari Act 1077. One of the questions considered by the 3-Judge Bench was whether the levy of supervisory charges under Section 14 (e) of the Act and RI.lie 16(4) of the Kerala Rectified Spirit Rules, 1972 could be regarded as fee even though there was no quid pro quo between the levy and the c services rendered by the State. The Bench. referred to the distinction between tax and fee highlighted in the Commissioner, Hindu Religious Endowments, Madras v. Lakshmindra Thirtha Swamiar of Shirur Mutt (1954) SCR 1005 and proceeded to observe: "''Fees" are the amounts paid for a privilege, and are not an obligation, but the payment is voluntary. Fees are ·distinguished from taxes in that the chief purpose of a tax is to raise funds for the support of the Government or for a public purpose, while a fee may be charged for the privilege or benefit conferred, or service rendered or to meet the expenses connected therewith. Thus, fees are nothing but payment for some special privilege granted on service rendered. Taxes and taxation are, therefore, distinguishable from various other contributions, charges, or burdens paid or imposed for particular purposes and under particular powers or functions of the Government. It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or licence, are taken to the consolidated fund of the State and are not separately appropriated towards the expenditure for rendering the service is not by itself decisive. That is because the Constitution did not contemplate it to be an essential element of a fee that it should be credited to a separate fund and not to the consolidated fund. It is also increasingly realised that the BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 963 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] element of quid pro quo stricto senso is not always a sine qua non of a fee. It is needless to stress that the element of quid pro quo is not necessarily absent in every tax. We may, in this connection, refer with profit to the observations of Seervai in his Constitutional Law, to the effect: "ft is submitted that as recognised by Mukherjea, J. himself, the fact that the collections are not merged in the consolidated fund, is not conclusive, though that fact may enable a court to say that very important feature of a fee was present. But the c attention of the Supreme Court does not appear to have been called to Article 266 which requires that all revenues of the Union of India and the States must go into their respective consolidated funds and all other public moneys must go into the respective public accounts of the Union and the States. It is submitted that if the services rendered are not by a separate body like the Charity Commissioner, but by a government department, the character of the imposition would not change because under Article 266 the moneys collected for the services must be credited to the consolidated fund. It may be mentioned that the element of quid pro quo is not necessarily absent in every tax."" (emphasis supplied) The three Judge Bench also referred to the Constitution Bench judgment in Kewal Krishna Puri v. State of Punjab (supra) and observed: "To our mind, these observations are not intended and meant as laying down a rule of universal application. The Court was considering the rate of a market fee, and the question was whether there was any justification for the increase in rate from Rs 2 per every hundred rupees to Rs 3. There was no material placed to justify the increase in rate of the fee and, therefore, it partook the nature of a tax. It seems that the Court proceeded on the assumption that the element of quid pro quo must always be present in a fee. The traditional concept of quid pro quo is undergoing a transformation."

60. The test laid down in Kewal Krishna Puri v. State of Punjab (supra) was again considered in Sreenivasa General Traders v. State of A.P. (1983) 4 SCC 353. In that case, the petitioners had challenged the constitutional validity of the increase in the rate of market fee levied under the Andhra C Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 from 50 paise to Rs. 1/- on every Rs. 100/- of the aggregate amount for which the notified agricultural produce, etc. were purchased or sold in the notified market area. The petitioners relied upon the proposition laid down in Kewal D Krishna Puri's case (supra) in support of their argument that in the absence of any evidence or correlation between the levy and special services rendered by the Market Committees to the beneficiaries, the levy should be regarded as tax. The three Judge Bench referred to the proposition laid down in Kewal E Krishna Puri's case (supra) and observed: "It would appear that there are certain observations to be found in the judgment in Kewal Krishan Puri case which were really not necessary for purposes of the decision and go beyond the occasion and therefore they have no binding authority though they may have merely persuasive value. The observation made therein seeking to quantify the extent of correlation between the amount of fee collected and the cost of rendition of service, namely: (SCC p. 435, para 23): "At least a good and substantial portion of the amount collected on account of fees, maybe in the neighbourhood of two-thirds or three-fourths, must be shown with reasonable certainty as being spent for rendering services in the market to the payer of fee", appears to be an obiter. BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 965 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] The traditional view that there must be actual quid pro quo for a fee has undergone a sea change in the subsequent decisions. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest if the element of revenue for general purpose of the State predominates, the levy becomes a tax. In regard to fees there is, and must always be, correlation between the fee collected and the service intended to be rendered. In c determining whether a levy is a fee, the true test must be whether its primary and essential purpose is to render specific services to a specified area or class; it may be of no consequence that the State may ultimately and indirectly be benefited by it. The power of any legis!ature to levy a fee is conditioned by the fact that it must be "by and large" a quid pro quo for the services rendered. However, correlationship between the levy and the services rendered (sic or) expected is one of general character and not of mathematical exactitude. All that is necessary is that there should be a "reasonable E relationship" between the levy of the fee and the services rendered."

61. In Kishan Lal Lakhmi Chand v. State of Haryana 1993 Supp (4) sec 461, while dealing with the constitutionality of the levy of cess under the Haryana Rural Development Act, 1986, the three Judge Bench referred to the scheme of the Act and held that from the scheme of the Act it would be clear that there is a broad, reasonable and general corelationship between the levy and the resultant benefit to the producer of G the agricultural produce, dealer and purchasers as a class though no single payer of the fee receives direct or personal benefit from those services. Though the general public may be benefited from some of the services like laying roads, the primary service was to the producer, dealer and purchaser of H the agricultural produce.

62. In Krishi Upaj Mandi Samiti v. Orient Paper & Industries Ltd. (1995) 1 SCC 655 the two Judge Bench reviewed and analysed various precedents including the judgments in Commissioner, Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (supra), Mahant Sri Jagannath Ramanuj Das v. State of Orissa (1954) SCR 1046, Ratilal Panachand Gandhi v. State of Bombay (1954) SCR 1055, H.H. Sadhundra Thirtha Swamiar v. Commissioner for Hindu Religious and Charitable C Endowments 1963 Supp (2) SCR 302, Corporation of Calcutta v. Liberty Cinema (supra), Kewal Krishna Puri v. State of Punjab (supra), Sreenivasa General Traders v. State of A.P. (supra), Om Parkash Agarwal v. Giri Raj Kishori (1986) 1 SCC 722, Kishan Lal Lakhmi Chand v. State of Haryana (supra) and culled out 9 propositions, of which proposition No. 7 is extracted below: "(7) It is not a postulate of a fee that it must have relation to the actual service rendered. However, the rendering of service has to be established. The service, further, cannot be remote. The test of quid pro quo is not to be satisfied with close or proximate relationship in all kinds of fees. A good and substantial portion of the fee must, however, be shown to be expended for the purpose for which the fee is levied. It is not necessary to confer the whole of the benefit on the payers of the fee but some special benefit must be conferred on them which has a direct and reasonable corelation to the fee. While conferring some special benefits on the payers of the fees, it is permissible to render service in the general interest of all concerned. The element of quid pro quo is not possible or even necessary to be established with arithmetical exactitude. But it must be established broadly and reasonably that the amount is being spent for rendering services to those on whom the burden of the fee falls. There is no postulate of BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 967 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.] a fee that it must have a direct relation to the actual services rendered by the authorities to each individual to obtain the benefit of the service. The element of quid pro quo in the strict sense is not always a sine qua non for a, fee. The element of quid pro quo is not necessarily absent in every tax. It is enough if there is a broad, reasonable and general corelationship between the levy and the resultant benefit to the class of people on which the fee is levied though no single payer of the fee receives direct or personal benefit from those services. It is immaterial that the general public may also be benefited from some of the services if the c primary service intended is for the payers of the fees."

63. In/. T.C. Ltd. v. State of Karnataka 1985 (Supp) SCC 476, another three Judge Bench considered the validity of levy and collection of market fee from sellers of specified agricultural produce. Sabyasachi Mukharji, J. (as he then was), with whom Fazal Ali, J. (as he then was) agreed, laid down the following principles: "(1) there should be relationship between service and fee, (2) that the relationship is reasonable cannot be established with mathematical exactitude in the sense that both sides must be equally balanced, (3) in the course of rendering such services to the payers of the fee if some other benefits accrue or arise to others, quid pro quo is not destroyed. The concept of quid pro quo should be judged in the context of the present days – a concept of markets which are expected to render various services and provide various amenities, and these benefits cannot be divorced from the benefits accruing incidentally G to others, (4) a reasonable projection for the future years of practical scheme is permissible, and (2012] 4 S.C.R. (5) services rendered must be to the users of those markets or to the subsequent users of those markets as a class. Though fee is not levied as a part of common burden yet service and payment cannot exactly be balanced. (6) The primary object and the essential purpose of the imposition must be looked into."

64. If the conditions imposed by the BOA requiring the respondents to pay for augmentation of water supply, electricity, C 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 BOA amounts to levy of tax and is O ultra vires Article 265 of the Constitution.

65. Under the 1976 Act, the BOA is obliged to provide different types of amenities to the population of the Bangalore Metropolitan Area including the allottees of the sites in the E layouts prepared by house building societies. It is quite possible that they may not be the direct beneficiaries of one or the other amenities made available by the BOA, but this cannot detract from the fact that they will certainly be benefited by the construction of the Outer Ring Road and Intermediate Ring Road, Mass Rapid Transport System, etc. They will also be the F ultimate beneficiaries of the Cauvery Scheme because availability of additional 270 MLO water to Bangalore will enable BWSSB to spare water for the private layouts. It is neither the pleaded case of the respondents nor it has been argued that the allottees of sites in the layouts to be developed by the G private societies will not get benefit of amenities provided by the BOA. Thus, charges demanded by the BOA under Section 32(5A) cannot be termed as tax and declared unconstitutional on the ground that the same are not sanctioned by the law enacted by competent legislature. BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 969 EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.) Question (4)

66. The only issue which survives for consideration is whether the charges demanded by the BOA are totally disproportionate to its contribution towards Cauvery Water Scheme, Ring Road, Mass Rapid Transport System, etc. We may have examined the issue in detail but in view of the affidavit dated 11.11.2009 filed by Shri Siddaiah, the then Commissioner, BOA to the effect that only Rs. 34.55 crores have been collected between February, 1988 to 4.6.2005 towards the Cauvery Scheme and a sum of Rs. 15.15 crores has been collected by way of Ring Road surcharge between 1992-93 and 2005-06 and that the State Government has directed that henceforth Ring Road surcharge, the Cauvery Water Cess and MRTS Cess should not be levied till appropriate decision is taken, we do not consider it necessary to adjudicate the controversy, more so, because in the written arguments filed on behalf of the BOA it has been categorically stated that the Government has to take a decision about the pending demands and the Court may issue appropriate direction in the matter, which the BOA will comply. In our view, ends cf justice will be served by directing the State Government to take appropriate decision in the light of communication dated 03.05.2005.

67. 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 BOA or any other agency/ instrumentality of the State. (2012] 4 S.C.R.

68. In the result, the appeals are allowed, the impugned order is set aside and the writ petitions filed by the respondents are dismissed subject to the direction that within three months from the date of receipt/production of the copy of this judgment, the State Government shall take appropriate decision in the B context of communication dated 03.05.2005. Within this period, the State Government shall also decide whether the levy of supervision charges, improvement charges, examination charges, slum clearance development charges and MRTS cess at the rates specified in the communications of the BOA was c excessive. The decision of the State Government should be communicated to the respondents within next four weeks. If any of the respondents feel aggrieved by the decision of the State Government then it shall be free to avail appropriate legal remedy. The parties shall bear their respective costs. D B.B.B. Appeals allowed.