No Vested Right to Have Building Plan Sanctioned Under Obsolete Laws: Karnataka High Court

In a landmark judgment Karnataka High Court delivered a decisive ruling in BBMP v. M/s. Sangam Enterprises, clarifying that building plans must comply with the statutory framework in force at the time of approval, not at the time of application. The Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Joshi allowed the BBMP’s appeal and overruled the earlier precedent set in M/s. Aishwarya Heights Infra Pvt. Ltd., holding that “settled expectation” or prior policies cannot override binding legislative amendments or urban planning rules introduced in public interest.

“A ‘settled expectation’ or the so-called ‘vested right’ cannot be countenanced against public interest and convenience which are sought to be served by amendment of the Building Rules,” the Court emphatically declared, quoting from the Supreme Court’s ruling in Howrah Municipal Corporation v. Ganges Rope Co. Ltd.

The High Court held that plans seeking Transferable Development Rights (TDRs) and setback relaxations must adhere to the Karnataka Town and Country Planning (Benefit of Development Rights) Rules, 2016, and the amended Section 14B of the KTCP Act, both of which were in force before the plan in question could be approved.

“The Law at the Time of Sanction, Not Application, Governs Approval of Building Plans”: BBMP Wins Appeal Over Modified Plan Rejected for Exceeding 25% Setback Relaxation

The Court was hearing a writ appeal filed by Bruhath Bengaluru Mahanagara Palike (BBMP) against a Single Judge’s direction to approve a modified building plan submitted by M/s. Sangam Enterprises in 2014, which sought setback relaxation beyond permissible limits by relying on TDRs acquired under pre-2017 norms. While the learned Single Judge had directed BBMP to consider the plan under the rules prevailing in 2014, the Division Bench set aside this order, holding:

“The question whether the building plan has to be sanctioned on the basis of the Rules and bye-laws prevailing on the date of the application or on the date when the sanction is accorded, is no longer res integra.”

The Court reaffirmed that statutory amendments, especially those concerning urban development regulations, apply prospectively to all pending applications, unless explicitly stated otherwise.

Developer’s Modified Plan Rejected for Non-Compliance With 2016 TDR Rules

M/s. Sangam Enterprises had initially secured building plan approval in April 2013 for a commercial complex and multiplex on Dhanvanthri Road and Subedar Chatram Road, Bengaluru. In 2014, the petitioner sought approval of a Modified Plan, proposing to raise the structure to 29.60 metres by utilizing TDRs and seeking 50% setback relaxation, relying on BBMP’s 2009 Circular and Revised Master Plan 2015.

However, in the intervening period:

• The KTCP Act was amended on 10.09.2015, introducing restrictions under Section 14B regarding use and extent of TDRs.

• The Karnataka Town and Country Planning (Benefit of Development Rights) Rules, 2016, were notified on 04.03.2017, capping setback relaxation to 25%.

Despite multiple representations, BBMP did not approve the modified plan. The developer approached the High Court, which ruled in its favour based on an earlier decision in Aishwarya Heights. BBMP appealed, contending that the modified plan exceeded the 25% relaxation limit and could not be approved under the new law.

Do Applicants Have a Vested Right to Have Building Plans Approved Under Earlier Rules?

At the core of the appeal was whether a developer who applied for plan modification before the 2017 rule change could insist on approval under the old, more lenient regime, particularly when the approval process extended into the period governed by stricter rules.

The Single Judge had ruled in favour of the developer, citing legitimate expectation and retrospectivity concerns, relying heavily on the ruling in M/s. Aishwarya Heights Infra Pvt. Ltd.

The Division Bench disagreed and held: “The decision in M/s. Aishwarya Heights is contrary to the law as settled by the Supreme Court… The said decision is accordingly overruled.”

Supreme Court Precedents Emphasize Law at Time of Approval

The Karnataka High Court drew on binding precedent from the Supreme Court, especially:

• Howrah Municipal Corporation v. Ganges Rope Co. Ltd., (2004) 1 SCC 663

• Usman Gani J. Khatri v. Cantonment Board, (1992) 3 SCC 455

• NDMC v. Tanvi Trading & Credit Pvt. Ltd., (2008) 8 SCC 765

In Howrah Municipal Corporation, the Supreme Court had categorically held:

“A legitimate or settled expectation to obtain sanction… does not create any vested right… such expectation cannot be set up against statutory provisions brought into force by the State.”

Similarly, in Usman Gani, the Court held: “Building plans can only be sanctioned according to the building regulations prevailing at the time of sanctioning.”

And in Tanvi Trading, it was held that: “The law for approval of the building plan would be the date on which the approval is granted and not the date on which the plans are submitted.”

By applying these decisions, the High Court rejected the notion that mere application for plan modification creates an indefeasible right to have it sanctioned under the earlier rules.

Relaxation Under Master Plan Not Absolute: 50% Setback Not a Right

The developer also argued that under Paragraph 10 of the Revised Master Plan 2015, up to 50% setback relaxation was permissible. The Court rejected this claim, stating:

“It does not mandate that relaxation to 50% set backs is required to be granted… BBMP has framed Rules… and cannot sanction a plan contrary to the Rules.”

The Court noted that the 2016 Rules, framed under Section 14B of the KTCP Act, are binding and cannot be overridden by administrative circulars or master plan provisions that lack statutory force.

Contempt Petition Also Dismissed as Order Set Aside

A civil contempt petition (CCC No. 1332/2024) filed by the developer against BBMP for not complying with the Single Judge's order was also closed by the Court:

“As the judgment below is set aside, no wilful disobedience exists.”

Rule of Law and Planning Supremacy Restored

This judgment stands as a significant reaffirmation of statutory supremacy in urban planning. By overruling Aishwarya Heights, the Karnataka High Court has brought its jurisprudence in line with the Supreme Court’s view that urban development laws must be applied at the time of sanction, and there is no vested right to outdated regulatory regimes.

It ensures that building plan approvals reflect current safety, zoning, and urban infrastructure needs, and prevents developers from exploiting procedural lags to circumvent updated norms designed in the public interest.