BENGALURU: In a significant development for homebuyers who have awaited possession of plots for nearly a decade, the Karnataka Real Estate Regulatory Authority (K-Rera) has ruled that the Bangalore Development Authority (BDA) must be classified as a “promoter” under the Real Estate (Regulation and Development) Act, 2016. K-Rera has instructed the BDA to register the long-overdue Nadaprabhu Kempegowda Layout (NPKL) within two weeks and to justify why penalty proceedings should not be initiated for selling sites without the necessary Rera registration.
The ruling, issued on November 7 by a two-member bench, followed multiple complaints from allottees who claimed that the BDA had collected full payments years ago without completing the layout or providing basic infrastructure. Many complainants described the layout as “uninhabitable,” lacking essential services such as roads, drinking water, sewerage, drainage, and electricity, despite numerous assurances.
Homebuyers also alleged that the BDA collected more than the legally permitted 10% advance during allotment and demanded full payment before completing the development or registration. They argued that the authority failed to maintain an escrow account for collected funds, a vital requirement of Rera designed to prevent the misappropriation of project money. Furthermore, buyers pointed out that the BDA marketed approximately 5,000 additional sites while earlier phases remained incomplete, claiming such actions mirrored those of private developers and necessitated full Rera oversight for transparency, timely completion, and financial accountability.
BDA claims exemption
The BDA denied these allegations, asserting that it is a statutory urban development authority established under the BDA Act, 1976, rather than a commercial real estate builder. The BDA argued that site formation, allotment, and layout development fall within its urban planning and welfare responsibilities, not profit-driven real estate activities. BDA’s counsel stated that statutory bodies operate under distinct frameworks and that Rera was not meant to apply to government-run development schemes.
The authority further argued that large-scale housing projects like NPKL involve extensive land acquisition and legal challenges beyond its control, and noted that funds from one layout may sometimes be allocated to other public infrastructure projects—a common practice among statutory development entities.
RERA rejects BDA arguments
However, the bench—chaired by Rakesh Singh and including member Ravindranadha Reddy—dismissed the BDA’s position, asserting that any public authority that develops and sells plots to the public qualifies as a “promoter” under Rera, regardless of profit intent. They noted that the BDA’s role in creating layouts and selling plots closely resembles the activities of private developers, thus subjecting it to comparable standards of transparency and accountability.
Citing a 2019 clarification from the Ministry of Housing and Urban Affairs, which indicated that even the Delhi Development Authority (DDA) falls under Rera, the bench reaffirmed that public authorities engaged in real estate development cannot claim exemption from the Act.
Reacting to the verdict, a senior BDA official remarked that the authority had yet to thoroughly review the ruling. “We need to study the order. Our legal department must review it first, and only after consultation can we respond,” the official stated.
Homebuyers welcome order
The ruling has been met with positive responses from allottees. “We’ve been fighting for eight years to attain justice,” said Sairam KA, a member of the NPKL Forum who bought a plot for ₹96 lakh. “The BDA collected the full payment upfront but did not deliver the developed sites as promised. We are now seeking compensation with interest for the delay according to the Rera Act. There are nearly 10,000 allottees like us, including farmers and auction purchasers, who only received vacant plots and paper certificates.”
