BDA not exempt from Real Estate Act: RERA

In a landmark order, the Karnataka Real Estate Regulatory Authority (RERA) has ruled that the Bangalore Development Authority (BDA) falls under the purview of the Real Estate (Regulation and Development) Act, 2016, and must be treated as a promoter for all housing projects it undertakes.

The authority has directed the BDA to register its Nadaprabhu Kempegowda Layout (NPKL) project as a real estate project within two weeks.

Rejecting BDA’s claim that it is an independent statutory body exempt from RERA regulations, the authority clarified that government agencies developing and selling layouts are also considered promoters under Section 2(zk) of the Act. “The nature of the project—whether for profit or welfare—is irrelevant. BDA clearly qualifies as a promoter under the RERA Act,” the order stated.

The verdict, delivered by RERA Chairperson Rakesh Singh and Member G.R. Reddy, came after a detailed hearing on complaints filed by Ramachandra Nayak and others. The 14-page order dismissed all arguments made by the BDA and emphasized that transparency, accountability, and consumer protection are the key objectives of the RERA law.

RERA further directed the BDA to submit all related project documents, including layout plans and approvals, to the authority within the stipulated time.

The order underscored that Section 89 of the RERA Act gives it overriding authority over any conflicting provisions in other laws. Therefore, in matters relating to layout development, sale, and distribution, RERA provisions will prevail over the BDA Act. Citing a previous Supreme Court observation, the order reaffirmed that even government development bodies involved in the commercial sale of housing or plots must comply with regulatory oversight and consumer protection laws.

Petitioners, including members of the Nadaprabhu Kempegowda Layout Residents’ Forum, accused the BDA of violating RERA norms by failing to register the NPKL project under Section 3. They also alleged that the layout lacks basic infrastructure such as water, sanitation, power supply, roads, and parks, rendering it uninhabitable. Moreover, they claimed that the BDA had collected funds from allottees in excess of legally permissible limits.

In its defense, BDA argued that it functions under a special statute (the BDA Act) focused on urban planning and public welfare, not commercial activity, and therefore should be exempt from RERA. However, the RERA authority dismissed this argument, marking a significant legal setback for the BDA.