Please do not mix two cases - Katara case should be considered as a voilation of parliamentary propreity by a one person. There will always individuals like this. Only if the party knew about it, then they have to blame the party.
Other case is more connected to party's image. If it was really fake encounter for reasons such as personal gain and enemity, then BJP has to pay the price for it. However if this guy is a hard core criminal or a smart militant working against India's interest, then it is not wrong even if it was 'fake encounter'. In many cases it is better to end these 'sleeper agent of Pak', otherwise India pays price in terms of innocent lives. It is better to kill 1 or 2 terrorists than sacrifice the lives of handreds of innocents as in Bombay railway blast case.
