Cannot Exploit Entire Land's FAR For New Tower Once OC Is Issued Without Flat Owners' Consent: Karnataka High Court Mandates TDR Purchase

"In law, on the plan being approved by the BDA, the entire area of land on which the residential complex is constructed would be treated as common area, and every apartment owner would have undivided interest in the common area." High Court of Karnataka, in a significant ruling delivered on August 18, 2026, held that real estate developers cannot recalculate or utilize the Floor Area Ratio (FAR) of an entire land parcel to erect additional towers once an Occupancy Certificate has already been issued and undivided shares conveyed, unless express consent is obtained from existing apartment owners.

A Division Bench comprising Justice D.K. Singh and Justice T.M. Nadaf ruled that once flats are conveyed and common areas demarcated, a promoter is legally precluded from appropriating the entire site's FAR for new constructions.

The dispute arose after M/s Pedigree Constructions and its developer obtained a modified plan from the Bangalore Development Authority (BDA) in 2016 to construct a 120-flat 5th tower ('B' Block/H.M. Crescendo) on vacant land within the same 3-acre 20.18-guntas parcel where 241 flats across four towers ('A' Block/H.M. Tambourine) had already been completed and occupied since 2006. The apartment owners' association challenged the sanction before a Single Judge, who dismissed the writ petition, prompting this intra-court appeal.

The primary questions before the Court were whether a promoter retains any independent development rights over vacant land within a project after conveying undivided shares to flat owners, and whether the planning authority can legally sanction a modified plan for a new building by computing the FAR of the entire parent plot without the consent of existing apartment owners.

Entire Land Becomes Common Area Upon Approval Under 1972 Act

Examining the statutory framework under the Karnataka Apartment Ownership Act, 1972, the Court underscored that the architecture of the legislation strictly safeguards buyer interests against unauthorized structural alterations. The Bench noted that under Section 3(f)(1) and Section 4 of the 1972 Act, the entire plot on which the building is located constitutes a common area, vesting heritable and transferable undivided interest in every flat purchaser.

"Thus, in law, on the plan being approved by the BDA, the entire area of land on which the residential complex is constructed would be treated as common area, and every apartment owner would have undivided interest in the common area. Therefore, any future development that is mentioned in the plan can only be relatable to development by the owners on the vacant area, if that area was not part of the common area of the existing residential plan."

Developer Cannot Recalculate Combined FAR Without Buyers' Consent

The Bench emphasized that Section 7 of the 1972 Act and Section 14 of the Real Estate (Regulation and Development) Act, 2016 explicitly prohibit promoters from making additions or structural alterations without previous purchaser consent. The Court held that while the developer could utilize legitimately reserved vacant land outside the demarcated residential boundary, it had no legal authority to pool the entire land's FAR to build additional high-rises.

The judges observed that taking into account the entire 3 acres and 20.18 guntas to calculate allowable built-up area for the new tower, without the consent of the existing 241 flat owners who held undivided shares across that land, was impermissible. The Bench held that the builder could only develop the vacant portion using the specific FAR permissible for that segregated parcel or by independently purchasing Transferable Development Rights (TDR).

"We are of the considered view that such course of action may not be available to the builder in absence of express consent of the apartment owners of 'A' Block. However, the developer would be entitled to develop the unused/vacant land as per the permissible FAR for the said land and by buying additional TDR, if so required."

BDA Rapped Over Flawed Planning Practice; 15-Point Circular Approved

During the proceedings, the Court took strong exception to the BDA's historical practice of entertaining modified plans for single-ownership parcels by recalculating FAR on the entire property even after issuing Partial or Full Occupancy Certificates. In response to the Court's probing queries, the Commissioner of BDA submitted a Board-approved Clarificatory Circular dated July 15, 2026, containing 15 mandatory directives to streamline future plan sanctions.

The High Court directed all urban planning bodies across the state, including the BDA and the Greater Bengaluru Authority (GBA), to strictly implement the circular, cautioning that any deviation by sanctioning officials would attract severe penal consequences. The binding circular mandates that planning authorities shall never sanction modified plans where permissible FAR is fully utilized and an Occupancy Certificate is issued, nor shall any vacant area not earmarked for future development in the original plan be entertained for subsequent approvals.

Construction Not Demolished; Developer Directed To Purchase TDR

Distinguishing the Supreme Court's ruling in Supertech Limited v. Emerald Court Owner Resident Welfare Association, the Bench held that the construction of the new tower was not per se illegal since the vacant front parcel had been specifically earmarked for future development in the original brochures and sale deeds. Consequently, the Court held that existing flat owners who consented to such clauses were estopped from obstructing construction on that earmarked vacant land.

However, to cure the excess floor area built by wrongfully taking into account the entire land's FAR, the Court directed the developer to buy TDR at current rates rather than ordering demolition. The Bench ordered the BDA/GBA to communicate the cost of required TDR within one month, and directed the builder to remit the entire amount within two months thereafter.

The Court further recorded the developer's undertaking that the new block must have fully self-contained, separate amenities—including its own swimming pool, gym, and clubhouse—and barred residents of the new tower from utilizing the exclusive common facilities of the existing residential complex.

"The builder shall ensure that by adding or loading of additional floor area in the form of utilising balance permissible FAR/TDR/Premium FAR, the Undivided Share shall not be altered."

Modifying the Single Judge's order, the Division Bench disposed of the appeal by regularizing the construction strictly subject to the developer purchasing requisite TDR for the excess FAR within the stipulated timeframe, while insulating the common amenities and undivided property rights of existing apartment owners.

Date of Decision: 18 August 2026