Karnataka High Court Stays RERA's Applicability To BDA Layouts Based On Pre-Act Land Acquisition

On 3 June, the Karnataka High Court stayed the applicability of the Real Estate (Regulation and Development) Act, 2016 (RERA) to residential layouts and housing schemes undertaken by the Bangalore Development Authority (BDA) where preliminary land acquisition notifications predated the Act, holding that the issue requires detailed examination.

Justice Suraj Govindaraj granted interim relief to the BDA until 6 July 2026 and observed that the outcome of the case could affect allotments made to several hundred members of the public. He held:

“The stay is granted to examine the applicability of the Real Estate (Regulation and Development) Act, 2016 to the projects of statutory authorities like the BDA, who are implementing projects on the basis of acquisition of the land, prior to such projects being initiated, prior to the commencement of the RERA.”

The dispute arose after allottees of the Nadaprabhu Kempegowda Layout project initiated proceedings alleging substantial delays in development and the lack of basic infrastructure.

The Karnataka RERA and the Karnataka Real Estate Appellate Tribunal had held that the BDA falls within the definition of a “promoter” under Section 2(zk) of the RERA Act when it develops land and allotts plots for consideration. They consequently subjected BDA projects to the Act's regulatory framework.

The BDA challenged those findings before the High Court, arguing that its statutory development schemes cannot be equated with commercial real estate projects. It also sought a declaration that projects for which preliminary acquisition notifications were issued before the commencement of RERA fall outside the Act's ambit.

Appearing for the BDA, Advocate General for Karnataka Shashi Kiran Shetty argued that the authority's layout formation process differs fundamentally from that of private developers because it relies on statutory land acquisition proceedings under the Bangalore Development Authority Act, 1976.

He submitted that factors beyond the BDA's control often affect acquisition timelines and warned that treating such schemes as ongoing projects under RERA would impose obligations that the authority may be unable to meet.

After hearing the parties, Justice Govindaraj held that the BDA's contention warranted consideration. He noted that layout formation depends on land acquisition processes and the uncertainties associated with them.

The Judge observed that applying the concept of an ongoing project to acquisition-based schemes whose implementation depends on factors not entirely within the BDA's control would put “the BDA would be put to untoward harm and injury.”

The Court also observed that it would have to determine the categories of allotments to which the RERA framework applies, particularly because the decision could affect several hundred allottees. It held:

“At this stage, it would also have to be determined as to, for what kind of allotments, the RERA would be applicable and to what kind of allotments, it would not be applicable since the matter would touch upon the allotments made to several hundreds of general public.”

Accordingly, the Court stayed the operation and applicability of RERA to BDA residential layouts and housing schemes where preliminary acquisition notifications had been issued before the commencement of the Act.

The matter will next be heard on 6 July 2026.

Appearances for Bangalore Development Authority: Advocate General for Karnataka Shashi Kiran Shetty.

Appearances for Respondent No. 3: Advocate Gauthamdev C. Ullal.