The Karnataka High Court has ruled that shopping malls in Bengaluru do not need to obtain or renew an annual BBMP trade licence for diesel generator sets they own and maintain, provided the equipment undergoes the required inspections and certifications by the Electrical Inspector and the Karnataka State Pollution Control Board.
A division bench of Justices Anu Sivaraman and T P Vivekananda issued the ruling while allowing a writ appeal filed by Island Star Mall Developers Pvt Ltd, which operates Phoenix Market City in Bengaluru. The court held that the BBMP could not insist on an annual trade licence or levy renewal fees for a mall’s own generator when the civic body was not carrying out the relevant inspection or fitness verification.
The dispute arose after Island Star Mall Developers installed a diesel generator set at Phoenix Market City in Dyavasandra Phase-II Industrial Area. The company obtained a BBMP licence in 2011 after paying Rs 10 lakh. In 2013, it paid Rs 12.5 lakh towards renewal fees and penalty while seeking clarification from the civic authority. The BBMP made another renewal demand in 2015, prompting the developer to challenge the requirement before the High Court.
A single-judge bench dismissed the company’s petition in 2022, holding that the BBMP could demand the fee under Section 354 of the Karnataka Municipal Corporation Act. The earlier order treated the diesel generator as machinery that generated electrical energy through the combustion of diesel and therefore required municipal permission.
The division bench disagreed with that interpretation. It also clarified that shopping malls within BBMP limits do not require a trade licence merely because they operate as malls. Individual shops and business establishments functioning inside a mall must continue to obtain their own trade licences, the court said.
The bench observed that mall or commercial-complex owners would pay annual property tax under the relevant BBMP Act provisions. On the generator licence, it said that, apart from issuing the licence and collecting the prescribed fee, the BBMP was not providing a service such as inspection or verification of the generator’s fitness. Those functions, the court noted, were being performed by the Electrical Inspector and the KSPCB.
The court said the BBMP’s insistence that the mall obtain and renew a trade licence each year by paying a substantial fee “cannot be sustained”. The ruling is limited to cases where the generator is owned and maintained by the mall owner or occupier. It does not apply where the equipment is installed and maintained by another person or entity, in which case operating the generator would amount to a trade or business requiring a separate licence.
Although the appeal was allowed, the division bench declined the developer’s request for a refund of licence fees already paid. The judgment therefore settles the licensing requirement for the mall’s own generator while leaving earlier payments undisturbed.
