Building Owner Can Decide If Parking Fees Is To Be Levied From Customers Utilizing Its Shopping Facility: Kerala High Court In Plea Against Lulu Mall

The Kerala High Court recently held that it is up to the building owner to determine whether or not to charge customers for parking their vehicles while using the shopping facility and services offered in the building.

However, the court also held that for operating multilevel parking facilities around the commercial establishment that operate as stand-alone buildings used for parking, a licence under Section 475 of Kerala Municipality Act is required.

A single bench of Justice V G Arun was hearing two writ petitions challenging the collection of parking fees from vehicles parked in the parking area of Lulu Shopping Mall at Edappally in Kochi. The petitions sought for a refund of the money collected and also for a direction to refrain the mall from collecting any parking fee. The court held that:

“collection of fees from the vehicles parking in the 1083 parking slots in the basement of Lulu Mall is legal, but collection of fees from vehicles parking in the multilevel parking facility, without obtaining a licence under Section 475 of the Kerala Municipality Act, is illegal. If the company intends to utilise the multilevel parking facility near the shopping mall and collect parking fees from persons using the facility, that can be done only under a licence issued in terms of Section 475 of the Act.”

Lulu Mall, one of the largest shopping malls in the country, is spread across an area of 68,000 sq.mts. It has a parking facility in the basement of the building with 1083 parking slots as statutorily required. However, in addition to this, the mall also has a separate multilevel car parking facility adjacent to it because of which the mall has a total of 4387 parking slots.

Bosco Louis, the petitioner in the first writ petition appeared in person. Adv. Jomy K. Jose appeared for Pauly Vadakkan, the petitioner in the second writ petition. Senior. Advocates Mukul Rohatgi, S. Sreekumar and P.K. Suresh Kumar, and Advs. M.K. Aboobacker, M.P. Shammem Ahamed and Nebil Nizar appeared for the respondents. Adv. Alex M. Scaria was the Amicus Curiae in the matter.

The petitioners argued that since Rule 20 of the Kerala Municipality Building Rules mandates the providing of a parking space, it cannot be charged for. It was also argued that the purpose of a mandatory parking space is to prevent visitors to the mall from parking on the road, and this objective would be undermined if the mall was allowed to levy a high parking fee. It was also contended by the Petitioners that by charging parking fees, the company has transformed the parking area into a cart-stand for which a separate license under Section 475 of the Kerala Municipality Act was required.

It was argued on behalf of Lulu International Shopping Mall Pvt. Limited that the writ petition was not maintainable as the petitioners had sought for a refund of parking fees and they ought to have approached the Consumer Forum for the said recourse. It was further argued that there was no prohibition on charging parking fees and that Rule 29 Sub-rule (9) of the Kerala Municipality Building Rules, 2019 permits parking space to be rented out. As property tax must also be paid for the area, the company stated that it decided to charge fees for parking to utilize the space economically. Interfering with the levying of parking fees would violate the owner's fundamental right under Article 19(1)(g) and the constitutional right under Article 300(A), it was argued. The company also contended that it is authorized to collect parking fees under the license issued under Section 447 of the Kerala Municipality Act.

The court observed that under Rule 7(9)(D) of the Kerala Municipality Building Rules of 1999, an applicant is required to show a parking plan with parking spaces, driveways, and maneuvering spaces in order to get a building permit. Noting that nothing in the rules prohibits the charging of fees for parking, the court observed:

“This court is also of the definite view that it is the prerogative of the building owner to decide whether parking fee is to be levied from the customers, parking their vehicles for utilising the shopping facility and services provided in the building. If the building owner decides to levy fees, such activity can be carried out only under a licence issued by the local authority.”

The court also considered the question of whether the license for collecting parking fees should be issued under Section 475 or under Section 447 of the Act.

Under the Kerala Municipality (Issue of Licence to Dangerous and Offensive Trades and Factories) Licensing Rules, 2011, issued in terms of Section 447, businesses that require licenses are listed in Schedule I. The pay and park facility is one such activity that requires a license as per the Schedule. Therefore, since pay and park is now included in the list of activities for which a license can be granted under Section 447, a license under Section 475 is no longer necessary to collect fees from people using the parking area, the court held. This conclusion is also supported by Rule 29(9) of the KMBR, 2019, which states that the mandatory parking space required by the rules can be sold or let out to those using the building, the court observed.

However, the above argument would not apply to multilevel parking facilities, which are separate structures used solely for parking vehicles, the court held. Even though the vehicles parked in the company's multilevel parking facility are those that have spilled over from the basement parking area of the Mall, charging fees for parking is a commercial activity and therefore, the company is operating a cart stand, the court ruled. As a result, this would require a license issued under Section 475 of the Act, the court held. 

Case Title: Bosco Louis V State of Kerala, Pauly Vadakkan v. Lulu International Shopping Mall Pvt Ltd

Citation: 2023 LiveLaw (Ker) 197 

Click here to read/download judgment