Supreme Court on Premium FAR and Unauthorised Construction in Karnataka 

The Supreme Court, on 22 September 2026, issued an interim order concerning Karnataka’s Premium Floor Area Ratio (“Premium FAR”) framework, directing that Premium FAR cannot be utilised as a mechanism to regularise unauthorised construction. The Court has also made the utilisation of Premium FAR subject to the final outcome of the proceedings challenging the scheme. 

Background

Floor Area Ratio (“FAR”) determines the permissible floor area that may be constructed on a plot in proportion to its area. Premium FAR permits additional FAR, over and above the ordinarily permissible limit, subject to payment of prescribed premium charges and compliance with applicable planning regulations. 

Section 18-B of the Karnataka Town and Country Planning Act, 1961 (“KTCP Act”) provides the statutory basis for Premium FAR. The permissible additional FAR is linked, among other factors, to the width of the road abutting the property and remains subject to prescribed planning and building regulations. 

Proceedings Before the Karnataka High Court

The Premium FAR framework was challenged before the Karnataka High Court on several grounds, including constitutional challenges and contentions concerning the statutory framework under the KTCP Act. 

By its judgment dated 15 June 2026, the Karnataka High Court upheld the relevant framework governing Premium FAR. The Court distinguished the Premium FAR mechanism from a regularisation scheme, observing that Premium FAR operates within the applicable planning framework and permits additional construction subject to prescribed conditions. 

Supreme Court Proceedings

The matter subsequently reached the Supreme Court. On 22 September 2026, the Court issued notice to the State and directed that Premium FAR could not be used to regularise unauthorised construction. The Court further directed that utilisation of Premium FAR would remain subject to the final outcome of the proceedings. 

The order is interim in nature and does not, at this stage, finally determine the validity of the Premium FAR framework or invalidate the scheme in its entirety. 

Implications for Real Estate Stakeholders

Developers: Projects proposing to utilise Premium FAR should be examined for compliance with sanctioned plans, applicable development regulations and requisite approvals. 

Purchasers and Investors: Due diligence should extend beyond verification of Premium FAR payments and include scrutiny of sanctioned plans, revised approvals, Premium FAR permissions, completion or occupancy documentation and the actual extent of construction. 

Ongoing Projects: Projects relying on Premium FAR, particularly where additional construction or revised plans are proposed, may require enhanced regulatory scrutiny pending the Supreme Court’s final determination. 

Conclusion

The Supreme Court’s interim order draws a clear distinction between permitting additional development through Premium FAR and regularising unauthorised construction. Premium FAR cannot be used to regularise unauthorised construction, and its utilisation remains subject to the final outcome of the proceedings. The outcome of the proceedings will clarify the future scope and application of Premium FAR in Karnataka.

Last Updated on 13 October, 2026