The Karnataka High Court (Bengaluru Bench) has held that the Premium FAR scheme introduced through Section 18-B of the Karnataka Town and Country Planning Act, 1961 [KTCP Act], Rule 37-E of the Karnataka Planning Authority Rules, 1965 [KPA Rules], the notifications dated April 02, 2025 and the 2026 notifications does not violate Article 300A of the Constitution merely because it may lower the market value of TDRs. The Court emphasised that Article 300A protects against deprivation of property without authority of law and does not guarantee preservation of market value against policy changes or economic forces.
The Court further held that Section 18-B of the KTCP Act does not suffer from the vice of excessive delegation, the impugned notifications validly identify eligible areas by reference to road width, Rule 37-E and the notifications are not inconsistent with Section 18-B, and Section 18-B is not inconsistent with Section 14-B or the Transferable Development Rights (TDR) framework because Premium Floor Area Ratio (FAR) and TDR are structured to coexist within the regulatory regime.
The Court also held that the Premium FAR scheme does not violate Article 21 and is not akin to the Akrama Sakrama scheme, that Section 18-B and the Premium FAR framework do not violate Article 243ZE for want of BMPC consultation, and that Section 38-D of the Bangalore Development Authority Act, 1976 (BDA Act) is valid and not manifestly arbitrary.
The Division Bench comprising the Chief Justice Vibhu Bakhru and Justice C.M. Poonacha observed that the challenge under Article 300A proceeded on an erroneous assumption that Article 300A guarantees preservation of market value of property. It observed that Article 300A protects against deprivation of property save by authority of law, but does not insulate property owners from policy changes or market forces affecting value. Even assuming that Premium Charges payable for Premium FAR may be lower than the cost of acquiring TDRs, that by itself does not render the Premium FAR scheme expropriatory or amount to deprivation of property. The Bench also noted that TDRs were not rendered nugatory, since under the 2026 notification, plots abutting roads between 9 metres and 12 metres could avail additional FAR only through TDRs, and even on wider roads, full additional FAR up to 0.6 times the base FAR would require use of TDRs to the prescribed extent.
On excessive delegation, the Bench observed that essential legislative function consists in determination of legislative policy, while working out details may be delegated if sufficient guidance exists in the plenary enactment. Reading Section 18-B with the KTCP Act as a whole, the Bench found that the section is an enabling provision permitting grant of Premium FAR in areas identified in the Zonal Regulations of the Master Plan, subject to payment of Premium Charges not less than 50% of the estimated increase in value of land and building, and within limits specified in the Zonal Regulations. It further held that the competent authority was identifiable by reference to Section 15 read with Section 2(7) of the KTCP Act and the impugned notifications. Thus, Section 18-B did not confer unbridled or unguided power.
The Bench rejected the contention that the impugned notifications and Rule 37-E were inconsistent with Section 18-B or Section 14-B of the KTCP Act. It held that identifying plots abutting roads of specified width amounted to identifying the “areas” for Premium FAR under Section 18-B, since road width is a relevant planning parameter. It further held that the method of computing Premium Charges based on guidance value of additional notional sital area did not violate Section 18-B, because the incremental value of both land and building is captured through the notional land formulation. The Bench also found no inconsistency between Premium FAR and TDR, as the scheme provides for their structured coexistence and does not extinguish the permissible use of TDR under Section 14-B and Rule 4 of the TDR Rules.
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On Article 21, the Bench recognised the importance of planned urban development and the adverse effects of haphazard development, but held that the scope of judicial review is limited and the Court cannot supplant its opinion for that of the planning authorities on whether increase in FAR would lead to haphazard development. In the absence of material establishing that the increase in FAR would deprive residents of quality of life, the Bench declined to hold that the Premium FAR scheme violates Article 21. It also held that the scheme is not akin to the Akrama Sakrama scheme because it does not seek to regularise unauthorised construction, but uniformly amends the permissible extent of construction under the Zonal Regulations, though excess construction may incidentally be brought into conformity by acquiring Premium FAR.
The Bench also rejected the challenge under Article 243ZE, holding that the role of the Bengaluru Metropolitan Planning Committee (BMPC) in preparing a draft development plan for the metropolitan area is distinct from statutory master plans, building regulations and zonal regulations under the KTCP Act. Since Section 13-E of the KTCP Act does not mandate consultation with BMPC, Section 18-B, Rule 37-E and the impugned notifications were not liable to be invalidated on that ground. As regards Section 38-D of the BDA Act, the Bench held that the provision contains clear conditions and guiding principles for allotment of BDA land in favour of original owners, purchasers or persons in settled possession in specified circumstances, and therefore is neither unbridled nor manifestly arbitrary.
Briefly, the case concerns a common challenge to the constitutional validity of the statutory provisions introducing the “Premium Floor Area Ratio” (Premium FAR) scheme in Karnataka. The scheme permits additional construction over and above the ordinarily permissible FAR on payment of Premium Charges. The challenge was directed principally against Section 18-B of the Karnataka Town and Country Planning Act, 1961 (KTCP Act), Rule 37-E of the Karnataka Planning Authority Rules, 1965 (KPA Rules), the notifications dated April 02, 2025 introducing Chapter 11 / corresponding amendments in the Zonal Regulations, the notifications dated February 05, 2026 further amending the regime, and also Section 38-D of the Bangalore Development Authority Act, 1976 (BDA Act).
On writ appeal, the appellant had surrendered 432.62 sq. mtrs. of land for road widening, opted for Transferable Development Rights (TDR) under Section 14-B of the KTCP Act, and contended that the Premium FAR scheme denuded the value of TDRs and thereby violated Article 300A of the Constitution. The petitioners in the connected PILs challenged the scheme on grounds including manifest arbitrariness, excessive delegation, inconsistency with Section 14-B and Rule 37-E, violation of Article 21 and Article 243ZE, and procedural infirmity in issuance of the notifications. The petitioners additionally assailed Section 38-D of the BDA Act as arbitrary and akin to the Akrama Sakrama scheme.
