Summary: The High Court of Karnataka upheld the constitutional validity of the Premium Floor Area Ratio scheme, which permits landowners and developers to construct additional built-up area beyond the ordinarily permissible FAR upon payment of prescribed premium charges. The judgement affirms the State’s authority to regulate urban density through vertical growth, with significant implications for development potential of properties abutting roads of 12 metres and above, while TDR holders face a recalibrated market.

Bengaluru, bustling with traffic, and suffering from chronic shortage of space, has just received a judicial verdict that will shape its skyline for years to come. On June 15, 2026, a Division Bench of the High Court of Karnataka delivered a judgement upholding the constitutional validity of the Premium Floor Area Ratio Scheme (“Premium FAR Scheme”), Karnataka Town and Country Planning Act, 1963 (“KTCP”) Amendment Act, Bangalore Development Authority Amendment Act, KTCP Amended Rules.

What is Premium FAR?

The Premium FAR scheme allows a landowner or developer to construct more built-up area than what is ordinarily permitted, by paying prescribed fees to the Government. FAR or Floor Area Ratio is a planning metric that determines the permissible amount of construction on a given plot, relative to its size. It helps regulate how tall, large, or dense a building can be. In addition to Premium FAR, additional FAR may also be availed by utilising Transfer of Development Rights (“TDR”). TDR is the notional land granted in favour of a landowner in return for land surrendered to the Government, in lieu of compensation. Under the Premium FAR scheme, the authority may levy not less than 50% of the estimated increase in the value of the land and building, resulting from the grant of Premium FAR, as premium charges for granting such additional FAR.

The government issued a notification dated April 2, 2025, notifying the additional FAR available by road width:

Road Width (metres)	Maximum Permissible Additional FAR (Premium FAR + TDR combined)	Maximum Additional FAR via Premium FAR	Additional FAR availed using TDR alongside Premium FAR
>9 and ≤12	0.2	0.2	NIL
>12 and ≤18	0.4	0.3	0.1
>18	0.6	0.4	0.2

The scheme was subsequently amended to extend TDR benefits exclusively to plots abutting roads between nine metres and less than 12 metres, with effect from February 5, 2026, in the manner set out below:

Road Width (metres)	Maximum Additional FAR permitted by utilising TDR alongside Premium FAR	Maximum Additional FAR allowed for Premium FAR, without TDR
≥9m and <12m	0.60	NIL
12m and above	0.60	0.40

Set out below are the material changes between the 2025 and 2026 notification:

Road Width	Max. Additional FAR (April, 2025)	Max. Additional FAR (February, 2026)	Change
9m – <12m	0.20 × base FAR	0.60 × base FAR (via TDR only)	+0.40
12m – 18m	0.40 × base FAR	0.60 × base FAR	+0.20
>18m	0.60 × base FAR	0.60 × base FAR	No change

Testing Premium FAR: Legal Challenges and Judicial Findings

(a) Deprivation of Property: Article 300A of the Constitution provides that “no person shall be deprived of his property save by authority of law.” The petitioners argued that Premium FAR was destroying the value of TDR rights granted under Section 14-B of the KTCP and that the premium charges for Premium FAR are significantly less than the cost of acquiring and transferring TDR. The Court held that, providing additional FAR on payment of premium charges, which may be relatively lower than the costs of acquiring TDR, would not offend Article 300A. The Court further noted that for plots abutting roads of width nine metres or greater but less than 12 metres, the additional FAR of 0.6 times the base FAR is available only by loading TDR. Given that 85,000 out of approximately 1,08,240 roads in Bengaluru fall within this category, TDRs continue to retain relevance for a substantial portion of this market.

(b) Excessive Delegation: Section 18-B, inserted by the KTCP Amendment Act, 2020, provides in sub-section (1) that “the Authority may grant permission for Premium FAR in the areas identified for the purpose in the Zonal Regulations of the Master Plan.” Sub-section (2) authorises the levy of premium charges “at such rate, not less than 50% of the estimated increase in value of land and building as may be prescribed by the Government from time to time, for grant of Premium FAR.” The petitioners argued that this provision neither identified areas, nor planning considerations, nor the quantum of additional FAR, nor even the authority competent to grant it. The court noted that the KTCP, read as a whole, including its provisions for Master Plans, Zonal Regulations, and the rule-making power under Section 74, provides ample legislative policy to guide delegated authority.

(c) Article 21: Premium FAR, the petitioners said, would lead to the mushrooming of high-rise construction across the city, worsening traffic congestion and straining water supply, a threat to right to life. The Court, while acknowledging Bengaluru’s chronic urban ailments, held that there was no material to establish that an increase in FAR would deprive residents of their quality of life. It also noted that there is headroom to build higher without immediately rendering the city uninhabitable.

(d) The Akrama Sakrama Ghost: The Akrama Sakrama scheme was introduced under Section 76FF of the KTCP. The Supreme Court stayed the implementation of the scheme in SLP (C) Nos. 11077–11078 of 2017. The petitioners submitted that Section 18-B of the KTCP effectively substituted the Akrama Sakrama scheme. The court held that the Premium FAR scheme does not seek to regularise unauthorised construction; it changes the law uniformly, permitting additional construction by availing Premium FAR to the extent provided on payment of prescribed charges. Under the Premium FAR scheme, additional FAR is available not only for new constructions but also for additional construction on buildings already constructed in accordance with law.

(e) Metropolitan Planning Committee: Petitioners contended that the Premium FAR scheme, Section 18-B of the KTCP, and the notifications, had been introduced without consulting the Bengaluru Metropolitan Planning Committee (“BMPC”), in violation of the constitutional framework under Article 243ZE for metropolitan governance. The Court held that the role of the BMPC is fundamentally distinct from the specific task of amending Zonal Regulations under the KTCP and should not be confused with the functions of KTCP, such as development scheme or building regulations dealing with FAR, setbacks, and building heights.

What Does This Mean for Bengaluru?

The judgement is, at its heart, an assertion of the State’s right to manage its urban density pragmatically. Bengaluru is bursting at the seams, land is scarce, and horizontal expansion has its limits. Vertical growth, the court has confirmed, is a legitimate and legally sound response. The properties abutting roads of 12 metres and above are likely to witness enhanced development potential, resulting in higher land values, while existing TDR holders face an uncertain market. Only time will reveal whether Bengaluru’s skyline will rise with ever-taller cranes or if the FAR scheme will become a matter of courtroom debate.

1. Sri Krishnamurthy N. v. State of Karnataka & Ors., WA No. 1983 of 2025 C/W WP No. 14959 of 2020 & WP No. 2807 of 2026, decided on June 15, 2026 (High Court of Karnataka at Bengaluru, Division Bench).
2. Constitution of India, 1950
3. Karnataka Town and Country Planning (Fourth Amendment) Act, 2020
4. Karnataka Town and Country Planning Act, 1961.
5. SLP (C) Nos. 11077–11078 of 2017, pending before the Supreme Court of India.

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