In a major ruling concerning urban development in Karnataka, the High Court has affirmed the State’s implementation of a Premium Floor Area Ratio (Premium FAR) under Section 18B of the Karnataka Town and Country Planning Act, 1961.
The court dismissed two petitions submitted by landowners and Transferable Development Rights (TDR) holders who challenged the constitutional validity of the amendment and related notifications.
The petitions were filed by landowners whose properties were previously acquired for public use, receiving TDR instead of monetary compensation.
They contended that the introduction of Premium FAR enables developers to gain additional buildable rights from the government through payments, thus devaluing the TDR issued under Section 14B.
The petitioners sought to revoke the Premium FAR notifications issued in February and April 2025—Notification No. UDD 78 MNJ 2024(E)—arguing that these were arbitrary, ultra vires the parent Act, and contrary to urban planning principles.
They also challenged Rule 37-E of the Karnataka Planning Authority Rules, 1965, asserting that the retrospective implementation and insufficient notification violated constitutional protections, including Article 300A.
“Clearly defined rules on Premium FAR are long overdue, and this ruling instills confidence in the industry. We hope that the additional revenue accelerates necessary infrastructure improvements in Bengaluru,” said Zayd Noaman, president of CREDAI Bengaluru.
In his detailed order dated December 5, 2025, Justice M.I. Arun rejected the petitioners’ claims. He noted that both Premium FAR and TDR serve to enable landowners to exceed standard FAR—one through state payments and the other via private development rights. The Court stated their societal impacts are similar.
“This ruling alleviates uncertainty for ongoing and future projects. Premium FAR will facilitate higher-density development in well-serviced areas, while policy safeguards will ensure funds are allocated for city-wide infrastructure enhancements,” said Anuranjan Mohnot, Managing Director of Lumos Equity Advisors.
The Court acknowledged that while Premium FAR may negatively affect TDR market value, maximum FAR in Bengaluru can still be achieved only by combining it with TDR. Thus, TDR retains its relevance and is not obsolete.
“Anyone looking to exploit land commercially in a city like Bengaluru will utilize the maximum FAR, achievable only by purchasing TDR from private entities,” the order concluded, asserting there was no infringement of property rights or violation of Article 300A.
The judge also dismissed concerns that Section 18B excessively delegated legislative power, stating that operational specifics for Premium FAR are best determined by the executive as circumstances require, and are consistent with the Act’s framework.
The Court confirmed that the notifications were issued following Section 18B and should be viewed in conjunction with Section 14B, finding no illegality in their issuance or timing.
The judgment indicated that Premium FAR is already implemented in major cities like Mumbai and Ahmedabad, aligning with established urban development practices. Concluding that the petitioners failed to show grounds for intervention, the Court dismissed both writs and resolved all outstanding interim applications.
