Karnataka High Court upholds Premium FAR scheme; says it is not violation of right to property

Upholding the constitutional validity of the State government’s Premium Floor Area Ratio (FAR) scheme, the High Court of Karnataka has ruled that the scheme can’t be termed as violative of the Constitution of India while dismissing the petitions, which had claimed that it violated property rights and eroded the value of Transferable Development Rights (TDRs).

A Division Bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Poonacha delivered the verdict while dismissing the PIL petitions filed Citizens’ Action Forum, Vijayan Menon and other civic activists, and landowner Krishnamurthy N. A.

The Premium FAR scheme, introduced under Section 18-B of the Karnataka Town and Country Planning (KTCP) Act, 1961, does not violate Articles 14, 21, or 300A of the Constitution, the Bench said.

What it allows

The Premium FAR scheme allows property owners to purchase additional construction rights over and above the ordinarily permissible FAR by paying prescribed premium charges in a bid to facilitate vertical development and generate revenue for urban local bodies.

It was argued on behalf of petitioners that introduction of Premium FAR — which allows developers to purchase additional building rights at rates significantly lower than the market cost of TDRs — had rendered TDRs, secured by the landowners in lieu of monetary compensation for the land, as “nugatory.” It was also contended that premium charges, ranging from 28% to 50% of the notional land value, for availing Premium FAR placed TDR holders at a severe disadvantage, particularly when factoring in additional costs like stamp duty on TDR transfers.

Policy decision

However, the Bench rejected these arguments while holding that “the policy decision of the State government that results in fluctuation of the values of property would not render the policy as violative of Article 300A” while noticing that landowners were not compelled to secure only TDRs as compensation as they were not curtailed from opting for monetary compensation.

While analysing the zonal framework governing additional FAR in Bengaluru, the Bench said that Premium FAR is not universally available for all properties, while pointing out that scheme creates a protected zone for TDR holders on plots abutting roads with a width of 9 metres or greater but less than 12 metres. On such roads, the Bench pointed out, the additional FAR of 0.6 times the base FAR is available only by loading TDRs as developers cannot utilise Premium FAR in this zone and must acquire TDRs from their holders.

The Bench also noted the undisputed data presented by the government showing that approximately 85,000 out of 1,08,240 roads fall within this 9-to-12-metre width category and hence it would be difficult to accept that there will be no demand for TDRs in this extensive zone.

Even for plots abutting roads wider than 12 metres, the Bench pointed out that the norms impose limits as the maximum Premium FAR that can be loaded is restricted to 0.4 times the base FAR, while the balance 0.2 times can be utilised only through TDRs. Any developer, seeking to maximise permissible additional FAR would necessarily have to acquire TDRs for at least 0.2 times the base FAR, the Bench observed.

Bengaluru’s lowest FAR

“It is not disputed that there are several cities in the world, where the permissible FAR is higher. The permissible FAR in Bengaluru is amongst the lowest. According to the State, there is enough headroom to increase FAR,” the Bench said while stating that the petitioners could not establish that “an increase in FAR would be debilitating to the quality of life in the city.”