We report the observation of quantum Hall effect (QHE) in a Bi$_2$Se$_3$ single crystal having carrier concentration ($n$) $sim1.13times10^{19}$cm$^{-3}$, three dimensional Fermi surface and bulk transport characteristics. The plateaus in Hall resistivity coincide with minima of Shubnikov de Haas oscillations in resistivity. Our results demonstrate that the presence of perfect two dimensional transport is not an essential condition for QHE in Bi$_2$Se$_3$. The results of high resolution x-ray diffraction (HRXRD), energy-dispersive x-ray spectroscopy (EDX), and residual resistivity measurements show the presence of enhanced crystalline defects and microstrain. We propose that the formation of localized state at the edge of each Landau level due to resonance between the bulk and defect band of Bi$_2$Se$_3$ causes the quantum Hall effect.
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