Supreme Court’s Pause on Karnataka’s Premium FAR Scheme: Urban Growth Meets Land‑Reform Limits

The Supreme Court on 22 September 2026 issued notice to Karnataka, asking the state to file a counter‑affidavit on a petition that challenges the Premium Floor Area Ratio (FAR) scheme. The apex court also cautioned that the scheme should not be used, for the time being, to regularise unauthorised constructions, underscoring the tension between revenue‑generating vertical growth and the state’s constitutional land‑reform obligations.

What is the Premium FAR Scheme?

The Premium FAR scheme permits property owners to buy additional construction rights beyond the statutory floor‑area ratio, paying a premium to the urban local body. In practice, a developer can increase the gross floor area of a building without expanding the plot footprint, ostensibly encouraging vertical development in land‑scarce cities.

• ▸Floor Area Ratio (FAR) is the ratio of a building’s total floor area to the size of its land parcel.
• ▸The scheme was introduced by Karnataka to generate non‑tax revenue for municipalities.
• ▸Premium charges are set by the state and vary with the excess FAR sought.

The constitutional foundation for such land‑use reforms rests on Article 19(1)(c), which protects the right to acquire, hold and dispose of property, and on Article 31A that safeguards agrarian reforms. The 42nd Amendment of 1976 insulated land‑reform statutes from judicial review, a shield that continues to shape debates on schemes like Premium FAR.

Supreme Court Intervention and the Karnataka Case

A three‑judge bench headed by Chief Justice Surya Kant, with Justice Joymalya Bagchi, heard the petition filed by the NGO Citizens Action Forum. Senior advocate Aditya Sondhi argued that the scheme’s reliance on road width as the sole eligibility criterion enables massive additional construction without accounting for Bengaluru’s overstretched infrastructure.

• ▸The bench issued notice on 22 September 2026 and gave the state four weeks to file a counter‑affidavit.
• ▸The Court stressed that any clearance of Premium FAR must await the final outcome of the litigation.
• ▸The Karnataka High Court had upheld the scheme’s constitutional validity on 15 June 2026.

Justice Bagchi highlighted Bengaluru’s “nightmarish” traffic snarls, while Chief Justice Kant warned that vertical growth without parallel upgrades to roads, sewers and power lines risks a systemic collapse, citing Gurugram’s experience during natural calamities.

Fiscal and Urban‑Planning Implications

Premium FAR promises a steady stream of premium payments to urban local bodies, bolstering municipal finances without raising taxes. However, the scheme’s revenue upside is offset by hidden costs: additional water demand, electricity load, and parking pressure that exacerbate existing deficits.

• ▸Bengaluru’s water supply already operates at 85 % of capacity, leaving little margin for new high‑rise consumption.
• ▸Traffic congestion contributes to an estimated loss of ₹12,000 crore annually in productivity, according to city planners.
• ▸The scheme’s design bypasses the Karnataka High Court’s earlier validation, creating legal uncertainty that can deter private investment.

From a land‑reform perspective, the scheme stretches the ceiling on permissible built‑up area, challenging the spirit of the Tenancy and Ceiling Acts that aim to prevent excessive land concentration. The Supreme Court’s pause signals a re‑examination of whether premium‑based vertical expansion aligns with the constitutional mandate to protect weaker sections under Article 46.

Parallel Push for Aviation Infrastructure in West Bengal

While Karnataka grapples with vertical growth, the Centre is assessing four new airports in West Bengal, reviving airstrips at Balurghat and Purulia and converting IAF bases at Kalaikunda and Hasimara for commercial use. The Airports Authority of India (AAI) has requested 38.25 acres at Kalaikunda and 38 acres at Hasimara, land still pending from the state government.

• ▸The BJP’s victory over the TMC in the 2026 West Bengal Assembly election is expected to smooth land‑handover hurdles.
• ▸The “Modified UDAN” scheme, approved in March 2026, carries a total outlay of ₹28,840 crore for regional connectivity over the next decade.
• ▸The Ministry of Civil Aviation has signed MoUs with 21 states and union territories to propose new regional connectivity airports (RCS).

The aviation push mirrors the Premium FAR’s revenue‑generation motive: both rely on leveraging existing assets—land and airstrips—to spur growth. Yet, without coordinated infrastructure upgrades—such as road links to new airports—the same bottlenecks that plague Bengaluru’s vertical expansion could undermine the viability of new air corridors.

Broader Policy Lessons and Way Forward

The Supreme Court’s cautionary stance underscores the need for an integrated approach that aligns land‑use incentives with infrastructure capacity and constitutional safeguards. Policymakers must calibrate premium charges to reflect the true cost of additional utility provision, and embed mandatory upgrades—roads, water, power—into any approval process.

• ▸A statutory “infrastructure offset” could require developers to fund specific upgrades proportional to the extra FAR purchased.
• ▸Revisiting the ceiling limits under the Tenancy and Ceiling Acts may prevent excessive concentration of built‑up area in prime zones.
• ▸Coordinated land‑acquisition mechanisms, akin to those envisaged under the Modified UDAN programme, could streamline airport development while respecting local land‑rights.

By marrying fiscal ambition with robust urban planning and constitutional fidelity, India can harness vertical growth and new aviation hubs without compromising the livability of its cities or the rights of its citizens.