The Bangalore Development Authority (BDA) is likely to face additional compensation claims after several allottees of the Nadaprabhu Kempegowda Layout (NPKL) successfully secured favorable orders from the Real Estate Regulatory Authority (Rera). As of April, site owners had filed 38 complaints against BDA, with around 30 already disposed of by the regulator. Most complaints pertained to compensation for delays in providing basic amenities such as roads, water, drainage, and electricity connections.
Project Delays and Allottee Woes
The vast housing project, located between Mysuru Road and Magadi Road in the Yeshwantpur assembly constituency, comprises about 29,000 plots. Delays in project completion have left over 10,000 primary allottees and others who purchased plots in auctions in a difficult position. NPKL tops Rera's list of defaulting projects, with December 31, 2021, set as the original completion date. Allottees are frustrated that the project remains under development nine years after the first allotment round.
Rera and appellate tribunals have ruled that BDA is a promoter, rejecting its claims to the contrary, which has provided relief to thousands of allottees. Many are now approaching the regulator with complaints, seeking compensation for interest paid on loans during the extended period, continued rental expenses, and higher interest rates after banks downgraded their home loans to site loans with retrospective effect. Banks require home loan borrowers to construct houses within two years; failure results in downgrades to commercial loans.
BDA Plans to Challenge Orders
BDA officials stated that the authority plans to challenge the Rera orders in appellate courts. However, under the mandatory pre-deposit requirements of the Rera Act, a promoter must deposit 30% of the imposed penalty to challenge a Rera award, which could pose a challenge for BDA.
Meanwhile, allottees see a ray of hope in the Rera orders. Many told TOI that they waited nearly two decades for the site, and an additional 10 years means they are now entering old age. Some have become ineligible for home loans from banks.
Sairam, a member of the NPKL Open Forum who registered his plot in 2020, said: "When BDA failed to deliver ready-to-build sites, I felt someone had to take action, so I filed complaints. I paid about Rs 97 lakh plus registration in February 2020. My main grievance was that despite full payment and possession, essential infrastructure like roads, water, sewerage, and electricity was missing. Winning against BDA in Rera was a relief."
Another allottee, aged 56 from Block 5, said: "After learning we could approach Rera, I filed a complaint and received a compensation order for Rs 47 lakh. Despite investing our life savings and paying loans, I am unable to build a home. The judgment provides some relief, but we are prepared for further legal steps depending on BDA's response. Ultimately, we want both rightful compensation and a livable site."
Madhusudhan, an allottee from NPKL Block 3, said: "My mother was unaware of the process, so I had to handle registration. She paid Rs 6 lakh under the Economically Weaker Section (EWS), yet I have spent nearly five years following up. This is my mother's life savings."
Clear Disregard for Law
Sridhar Nuggehalli, president of the NPKL Open Forum, stated: "BDA has offered no proper response on compensation, reflecting a clear disregard for the law. Encouraged by rulings awarding 50-60% of site value as compensation, more allottees are approaching Rera. While buyers still want to retain their sites and build homes, the absence of basic infrastructure continues to make construction unviable."
He added: "Many have waited nearly nine years, and some have passed away without seeing their homes. While compensation orders have given people confidence, payments are still uncertain, and BDA may challenge them. But accountability must be enforced; people cannot continue to suffer due to prolonged delays and lack of infrastructure."
Allottees said BDA has not yet responded regarding payment of compensation, but they remain hopeful as some time is still left.
