Bedi lost by a margin of 2,400 votes in a election where AAP has swept to victory.
Krishna Nagar has been a BJP bastion since 1993 with senior party leader Harsh Vardhan winning the seat five consecutive times.
Bedi was leading till round 13 but lost out to the AAP candidate in subsequent rounds.
“This is the mandate of the people. My commitment is to the people of Krishna Nagar and to deliver everything we promised to them. We will not fail to deliver,” said Bagga as he came out with the winning certificate from the counting centre in Akshardham.