NGT’s Landmark Ruling: Green Nod Now Includes Non-FSI Areas in Realty Projects

In a ruling likely to have a far-reaching impact on real estate projects across the country, the National Green Tribunal (NGT) has determined that fire safety provisions, parking spaces, and recreation grounds must be included when calculating a realty project’s built-up area to decide whether it requires environmental clearance. For the first time, the NGT’s principal bench, headed by Justice Swatanter Kumar, brought these municipal issues under the scope of environmental approvals. The tribunal also imposed a fine of ₹23 crore on Priyali Builders and directed the developer to halt construction on a slum rehabilitation project in the Antop Hill locality.

The NGT ruled that the developer must pay ₹73 crore under the Public Liability Insurance Act and an additional fine for failing to provide a recreation ground for project beneficiaries. The tribunal also ordered the builder to halt construction and refrain from creating any third-party rights on the project.

This ruling followed a case filed by Sunil Kumar Chugh, a beneficiary of the slum rehabilitation project, and his neighbor, who had challenged the environmental approval granted to the redevelopment. The project, with a total built-up area of 29,150 square meters, was under scrutiny.

The NGT’s order effectively ends the malpractice of considering only the Floor Space Index (FSI) area, and not the total built-up area, to evade obtaining green clearance. According to Aditya Pratap, the advocate for the petitioners, “By ruling that built-up area includes both FSI and non-FSI areas, the tribunal has made this definition applicable retrospectively from 2006.”