By Team Homes | Thursday, 17 August 2023

BBMP proposes amending two laws in fear of losing Rs 2.3 billion due to legal flaws

In a bid to save itself from losing more than Rs 2,362 crore due to loopholes in two existing laws, BBMP has proposed to amend them, especially sections dealing with sanctioning of building plans and issuing of commencement certificates (CCs) and Occupation Certificates (OCs), which provide for builders to approach court. 'The two laws proposed to be amended are Karnataka Municipal Corporations (KMC) Act, 1976, and BBMP Act, 2020.

According to BBMP officials, several builders and developers have approached the high court and got orders passed for reduction of fees collected by the agency. Their main contention was that BBMP was collecting fees from the developers without any provision under KMC Act or BBMP Act.

The builders also contended that fees under various heads like plan verification, ground rent, licence, CC and OC are illegally collected by the town planning division of the civic agency. "BBMP collects ground rent from the developers. Ground rent means fees for usage of public roads and other infrastructure facilities provided and maintained by BBMP. It is for storing the debris generated during construction time. But no developer uses BBMP property to store waste or debris. So, why do we need to pay ground rent when we don't use BBMP properties?" said an employee with a private construction firm.

The sections of KMC Act and BBMP Act have no clarity about these fees. So, the civic body would issue a circular related to fees to be collected from the developers by the town planning division. Builders or individuals who want to construct buildings are mandated to pay these fees based on the guidance value of the property. Many people challenged such circulars in court and got orders in favour of them. BBMP got worried after the court directed the civic agency to return the excess fee collected from the builders. The agency estimated it was supposed to return over Rs 2,362 crore which was collected by its town planning division. Having spent the money on its developmental works, BBMP approached legal experts to find a solution.

According to BBMP sources, legal experts told the civic body that it should amend several sections of the two laws. According to the proposal drafted by BBMP, the government should amend KMC Act with retrospective effect from September 9, 2015, and BBMP Act from December 12, 2020. The government can approach the court to quash the fees-related interim orders passed in favour of various builders. Otherwise, BBMP may lose over Rs 2,362 crore, they said.

BBMP chief commissioner Tushar Giri Nath prepared a note on May 18, 2023, about the necessity of amending the Acts and sought permission from BBMP administrator Rakesh Singh on June 12. The administrator accepted the note and permitted the Palike to prepare and send a proposal to the government. Officials in the town planning division said they have sent the proposal to the government for necessary action. They hope both Acts will be amended very soon.

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