Vernacular settlements provide us an opportunity to learn how sustainable building was inherently practiced in various regions of the world.This paper looks at how rituals that are a part of the Indra Jatra,a community festival,reinforces the ideals of sustainable spatial planning in the vernacular settlements of the Newars who are the indigenous community belonging to the Kathmandu Valley in Nepal.The settlement-pattern and vernacular dwellings are appraised,and the current scenario is analyzed so as to derive how the ritual spaces get activated during the festival(that have been spatially planned)and whether they guide decision-making and policy planning.This is essential to determine whether these spaces face any urban pressures and to further investigate how they can be mitigated.