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The Karnataka Real Estate Regulatory Authority has ruled that the Bangalore Development Authority (BDA) must be treated as a promoter under RERA and must register the Nadaprabhu Kempegowda Layout within two weeks. The order follows complaints from allottees who paid in full years ago but are still waiting for plots that lack basic amenities such as roads, water, sewerage, drainage and electricity. Buyers also said the BDA collected excess advance payments and took full amounts before development, violating RERA norms. Although the BDA argued it is a statutory planning body, the regulator held that any public authority selling developed plots is a promoter under the law.
The Karnataka Real Estate Regulatory Authority recently ruled that the Bangalore Development Authority must be treated as a promoter under the Real Estate (Regulation and Development) Act, 2016. The regulator instructed the BDA to register the Nadaprabhu Kempegowda Layout within two weeks and to respond within three weeks on the need for penal action against its previously unregistered land sales. Advertisement
The decision stems from a cluster of complaints lodged by allottees, who alleged that after paying full amounts years ago, they have waited nearly a decade for possession of developed plots. Many blocks in the layout reportedly remain uninhabitable, lacking roads, drinking water, underground sewerage, drainage, electricity and other key amenities despite repeated assurances. The buyers also claimed that the BDA had collected more than the legally permitted ten per cent advance at allotment, demanded full site value before development completion and failed to maintain an escrow account for funds collected?practices that breach RERA norms.
The BDA contended that it is a statutory urban development authority constituted under the BDA Act, 1976, rather than a commercial real-estate builder. It argued that site formation, allotment and layout development lie within its urban planning and welfare mandate and that RERA was not intended to apply to government-run development schemes. The authority also noted that large-scale housing schemes such as NPKL involve extensive land acquisition, litigation and procedural delays beyond its control, and that funds from one layout are sometimes used for other public infrastructure works-a long-standing practice among statutory development bodies.
However, the RERA bench-comprising the chairman and a member-rejected the BDA's arguments. It observed that any public authority engaged in developing and selling plots to the public constitutes a promoter under the Act, irrespective of profit motive. The bench pointed to a 2019 clarification by the Ministry of Housing and Urban Affairs which had stated that even the Delhi Development Authority falls under RERA, meaning public authorities conducting real-estate development cannot claim exemption.
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