K-RERA Directs BDA to Register Delayed Layout, Offers Relief to Homebuyers

Bengaluru: In a major relief to thousands of homebuyers who have waited nearly a decade for possession of plots, the Karnataka Real Estate Regulatory Authority (K-RERA) has ruled that the Bangalore Development Authority (BDA) must be treated as a 'promoter' under the Real Estate (Regulation and Development) Act, 2016 (RERA).

The regulator has directed the BDA to register the long-delayed Nadaprabhu Kempegowda Layout (NPKL) within two weeks and explain within three weeks why penalty proceedings should not be initiated for selling sites without the mandatory RERA registration. The ruling, issued on November 7 by a two-member bench, came on a batch of complaints by allottees who alleged that the BDA had collected full payment years ago but failed to complete the layout or provide basic civic infrastructure.

Several complainants said the layout has remained 'uninhabitable,' with many blocks lacking roads, drinking water, underground sewerage, drainage, electricity, and other essential amenities despite repeated assurances. Homebuyers also alleged that the BDA collected more than the legally permitted 10% advance at the time of allotment and demanded the full site value before completion of development works or registration.

They submitted that the authority failed to maintain an escrow account for funds collected—a key RERA requirement intended to prevent the diversion of project money. The buyers further pointed out that the BDA advertised around 5,000 additional sites even though earlier phases remained incomplete, arguing that such conduct mirrored that of private developers and therefore warranted full RERA oversight to ensure transparency, timely completion, and financial accountability.

BDA claims exemption

Denying the allegations, the BDA maintained that it is a statutory urban development authority constituted under the BDA Act, 1976, and not a commercial real estate builder. It argued that site formation, allotment, and layout development fall within its urban planning and welfare mandate, not profit-oriented real estate activity. Its counsel submitted that statutory bodies such as the BDA are governed by separate frameworks, including the BDA (Allotment of Sites) Rules, 1984, and that RERA was not intended to apply to government-run development schemes.

The civic authority contended that large-scale housing schemes such as NPKL involve extensive land acquisition, litigation, and procedural delays beyond its control. It also stated that funds collected from one layout are sometimes utilized for other public infrastructure works—a long-standing practice among statutory development bodies.

RERA rejects BDA arguments

However, the bench—comprising chairman Rakesh Singh and member Ravindranadha Reddy—rejected the BDA's stand and held that any public authority engaged in developing and selling plots to the public is a 'promoter' under RERA, irrespective of profit motive. The bench observed that the BDA's role in forming layouts and selling plots on consideration was 'indistinguishable from the activities of private developers' and therefore, subject to the same transparency and accountability standards.

Citing a 2019 clarification issued by the Ministry of Housing and Urban Affairs, which stated that even the Delhi Development Authority (DDA) falls under RERA, the bench held that public authorities engaged in real estate development can't claim exemption from the Act. Reacting to the order, a senior BDA official told TOI the authority was yet to examine the full text of the ruling. 'We will have to study the order. The legal department must review it first, and only after consultation will we be able to respond,' the official said.

Homebuyers welcome order

The ruling has been widely welcomed by allottees. 'We've been struggling for eight years to get justice,' said Sairam KA, a member of the NPKL Forum who had purchased a plot for Rs 96 lakh. 'BDA collected full payment upfront but failed to deliver developed sites as promised. We are seeking compensation with interest for the delay as per the RERA Act. There are nearly 10,000 allottees like us, including farmers and auction purchasers, who only received barren plots and paper certificates.'