Bangalore Development Authority (BDA) to complete the registration of the Nadaprabhu Kempegowda Layout (NPKL) project that was delayed within two weeks. The regulatory body moreover commanded BDA to clarify the matter by providing the reasons why penalty proceedings should not be initiated within three weeks, in case of selling sites without obtaining the necessary RERA registration, as stipulated in the Real Estate (Regulation and Development) Act, 2016, without BDA having made the mandatory RERA registration.
“The preliminary objection of the Respondent (BDA) that the Authority lacks jurisdiction because BDA is a statutory planning authority is rejected,” the order said. “It is declared that BDA, in so far as it develops land and allots plots/buildings to members of the public for consideration (NPKL), is a ‘promoter’ under Section 2(zk) and the Nadaprabhu Kempegowda Layout (NPKL) is a Real Estate Project under Section 2(zn),” order further noted.
Background: The Story of a Long Delay and Buyers’ Grievances
The decision of the court, which was made by a two-member K-RERA bench, who addressed grievances of the users who had paid the price in full almost a decade ago and are yet to be given possession.
Complainants declared that while BDA was collecting full payment upfront—often more than the legally allowed 10% advance, the layout was not only staying incomplete but also unlivable due to the absence of the basic amenities like motorable roads, clean water, sewerage, drainage, and electricity.
Some complainants also emphasized that BDA did not open an escrow account for the funds collected from the allottees—one of the major provisions under RERA that aims to ensure financial transparency and to prevent the diversion of funds.
Before this, BDA had requested to be excluded from the purview of the Real Estate (Regulation and Development) Act, 2016, by presenting a case to Karnataka RERA that the BDA Act is a specially legislated law which has been confirmed by the Supreme Court and hence RERA is not applicable to its projects or complaints.
RERA Bench Rebuts BDA’s Argument
Disagreeing with the authority’s assertions, the K-RERA bench comprising Chairman Rakesh Singh and Member Ravindranadha Reddy held that a public authority that develops and sells plots to the public is a “promoter” under RERA, no matter whether it is a profit or non-profit organization. The bench pointed out that BDA’s layout development and plot sale activities are the same as those of private developers and hence must conform to RERA transparency and accountability requirements.
The panel, referring to a 2019 clarification by the Ministry of Housing and Urban Affairs, pointed out that even the Delhi Development Authority (DDA) is not exempt from RERA thereby setting a clear example for similar bodies all over India. “The contention that BDA does not fall under the definition of a promoter is contrary to law. RERA exempts only small projects under Section 3(2) or those not offered to the general public,” the bench said.
The decision of the court is NPKL dwellers’ bright hope. “We’ve been struggling for eight years to get justice,” said Sairam K.A., a member of the NPKL Forum. “BDA collected the full amount but failed to deliver developed plots. We now expect compensation with interest as per RERA provisions.”
The case of the NPKL project is that of nearly 10,000 allottees, i.e., general applicants, farmers, and auction purchasers, a great number of whom are still waiting for the provision of basic infrastructure and for possession.
BDA’s Defence: A Statutory Planning Authority
In its response, BDA contended that it is a statutory authority constituted under the BDA Act, 1976, and that its activities—layout formation and site allotment, are carried out for public welfare, not for commercial profit. The authority argued that the BDA Act is a special law, which, by principles of statutory interpretation, overrides the general provisions of RERA. “RERA is a general law; BDA Act is a special law. Therefore, the provisions of the BDA Act must prevail, and RERA cannot regulate BDA’s statutory schemes,” the civic body stated.
BDA has indicated that its response will depend on the outcome of a legal review of the order. Should the command be upheld, it might become a landmark case for other public housing bodies not only in Karnataka but also across the country, thus paving the way for the enhancement of their accountability in government-led housing projects.
The present decision constitutes a major movement in the direction of RERA’s protection scope being extended to public housing authorities, with the effect that the respective statutory agencies will be held accountable for transparency and promptness in the same manner as private developers.
Image source- rera.karnataka.gov.in
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