Best Builder Ignoring RERA Order - Penalty and Jail Proceedings Lawyer

Some RERA orders are about money: a refund, interest, compensation. Others tell the developer to do something: hand over possession, execute a conveyance deed, provide an amenity, fix a defect, stop charging an amount, or file documents with the authority. When a developer simply ignores an order, buyers understandably feel that the system has let them down twice.

The Real Estate (Regulation and Development) Act, 2016 anticipates this. Alongside recovery as arrears of land revenue under Section 40, it provides escalating consequences for promoters who don't comply: daily penalties for ignoring the authority's orders under Section 63, and heavier penalties, with the possibility of imprisonment, for ignoring the Appellate Tribunal's orders under Section 64. This page explains how these provisions work, how they fit with recovery, and how buyers can use them.

Section 63: ignoring the authority's orders

Section 63 provides that if any promoter fails to comply with, or contravenes, any of the orders or directions of the authority, it is liable to a penalty for every day during which the default continues, which may cumulatively extend up to 5% of the estimated cost of the real estate project.

Points to note:

• It applies to any order or direction of the authority, not only money orders. Failing to hand over possession, to execute a conveyance, or to file information as directed are all covered.
• The penalty is per day of continuing default, which allows it to grow the longer the developer ignores the order.
• The cap is measured against the whole project's estimated cost, not the amount owed to one buyer. For a large project, the potential penalty is many times larger than any individual buyer's claim.
• The penalty is paid to the government, not to the buyer. It doesn't satisfy the buyer's claim. Its purpose is to pressure the developer into compliance.
• It is imposed by the authority itself, after notice and a hearing.

Section 64: ignoring the tribunal's orders

Section 64 deals with promoters who fail to comply with orders, decisions or directions of the Appellate Tribunal. It provides that such a promoter shall be punishable with imprisonment for a term which may extend up to three years, or with a fine for every day during which the default continues, which may cumulatively extend up to 10% of the estimated cost of the project, or with both.

Because Section 64 provides for imprisonment, it's a criminal provision. That has procedural consequences:

• Under Section 80, no court can take cognizance of an offence under the Act except on a complaint in writing by the authority or an officer authorised by it, and the offence can be tried only by a court not inferior to a Metropolitan Magistrate or Judicial Magistrate of the first class. In practice, that means a buyer usually has to ask the authority to file the criminal complaint, rather than filing it directly.
• Under Section 69, where the promoter is a company, every person in charge of and responsible for the conduct of its business at the time is deemed guilty, unless he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent it. Directors and officers who consented, connived or were negligent can also be proceeded against. This is the route by which directors can personally face consequences.
• Under Section 70, offences punishable with imprisonment may be compounded by the court, before or after prosecution begins, on terms the court sets. In practice, compliance with the underlying order is often the price of compounding.

Corresponding provisions for agents and buyers

The Act treats non-compliance by others in a similar way. Sections 65 and 66 provide penalties for agents who don't comply with the authority's or tribunal's orders, and Sections 67 and 68 do the same for allottees, measured against the cost of the unit rather than the project. So, for instance, a buyer ordered to pay overdue instalments with interest who simply ignores the order can face penalty proceedings too.

How Sections 63 and 64 fit with recovery

For money orders, the main enforcement route is recovery as arrears of land revenue under Section 40. See our page on recovery certificates. Penalty proceedings run alongside recovery. They don't replace it.

The value of Sections 63 and 64 lies in pressure. A developer that is ignoring one buyer's recovery certificate may respond quite differently when the authority opens penalty proceedings that could, in principle, run into crores, or when the authority files a criminal complaint naming its directors. Many developers settle unpaid orders at this stage.

For orders that aren't about money, such as handing over possession or executing a conveyance, Section 40(2) allows the orders to be enforced in the manner prescribed by the state's rules, and Sections 63 and 64 provide the main pressure. For tribunal orders, Section 57 also makes them executable as a decree of a civil court, with the tribunal having the powers of a civil court for that purpose. That opens up the execution tools of the Code of Civil Procedure, which include attachment of property and, in appropriate cases and subject to safeguards, detention of a judgment-debtor who wilfully refuses to comply.

Starting Section 63 proceedings

A buyer who holds an order the developer hasn't complied with can apply to the authority asking it to initiate proceedings under Section 63. The application should set out:

• the order, its date and what it required;
• the compliance period and when it expired;
• what the developer has and hasn't done, with evidence (for instance, the buyer's demand letter and the absence of any response, or the developer's refusal to give possession despite the order);
• any recovery or execution steps already taken and their result; and
• a request that the authority impose a daily penalty under Section 63 and take any other action it considers appropriate.

The authority will issue notice to the developer and hear it. Developers often respond by making a payment, offering a payment plan, or offering possession. If they don't, the authority can impose a penalty, which is then itself recoverable under Section 40.

Authorities differ in how actively they use Section 63. Some have imposed significant daily penalties on persistent defaulters. Others have used the threat of penalty mainly to bring developers to the table. Either way, a Section 63 application tends to move a stalled matter.

Seeking action under Section 64

Where the developer is ignoring an order of the Appellate Tribunal (for instance, after losing an appeal), a buyer can:

• apply to the tribunal to execute its order as a decree under Section 57, using civil court execution powers; and
• ask the authority (or, depending on state practice, the tribunal) to file a complaint under Section 64 against the promoter and, under Section 69, against the persons responsible for its conduct.

Criminal proceedings are a serious step and move slowly. They're most useful where the developer is clearly able to comply and is choosing not to. Where the developer genuinely has no money, prosecution may add pressure but is unlikely to produce payment, and insolvency or a project-level solution may be more realistic.

Possession orders

Orders directing possession raise particular problems. A developer may not be able to give possession because the tower isn't finished, the occupancy certificate hasn't been issued, or there are disputes over dues. The authority can't build the flat. What it can do is:

• keep delay interest running until possession is actually offered (most possession orders also award interest, which continues);
• impose penalties under Section 63 for unjustified non-compliance;
• direct the developer to file a schedule for completion and report progress;
• in an appropriate case, allow the buyer to change their mind and seek a refund instead, if the delay continues; and
• in serious cases affecting the whole project, act under Sections 7, 8 and 37, including revoking registration and arranging for completion by others.

Where the flat is ready and the occupancy certificate issued, but the developer is refusing possession because of a dispute over charges, the authority can direct possession on payment of the undisputed amount, with the disputed amount left for decision. Refusal to comply with such a direction is clearly a matter for Section 63. See our page on disputed charges.

Conveyance deed orders

Orders to execute a conveyance deed under Section 17 are often held up by the developer's unpaid dues to the development authority, especially in Noida and Greater Noida, where the authorities have withheld permission to register deeds until land dues are paid. Section 63 proceedings can push the developer, but the underlying problem sometimes needs a wider solution involving the development authority and the state's policies on stalled projects. Associations of buyers have often pursued these together. See our page on registry delays.

Other consequences for non-complying developers

Beyond penalties and prosecution, developers who persistently ignore orders face other consequences under the Act and in practice:

• Revocation of registration under Section 7, for default in doing anything required by the Act, with action under Section 8 for completion of the project by others.
• Directions under Section 37, which the authority can issue to promoters to discharge their functions under the Act. These have been used to restrict withdrawals from project accounts and to require reporting.
• Effect on other applications. Authorities may take into account a developer's record of non-compliance when considering extension applications or other requests, and some have published lists of developers with large numbers of unpaid orders.
• Reputation and financing. Banks and funds look at a developer's RERA record, including unpaid orders, before lending.

An illustration

Here's a made-up example. A buyer in a Gurugram project won an order from Haryana RERA in 2023 directing the developer to hand over possession of a flat within 60 days, the occupancy certificate having been issued, and to pay delay interest of about Rs 18 lakh. The developer appealed, deposited the interest amount with the tribunal, and lost. The tribunal released the deposit to the buyer and directed possession within 30 days.

The developer then refused possession, demanding Rs 6 lakh for "club charges" and an increase in super area that the tribunal had held were not payable.

The buyer:

• filed an execution application before the tribunal under Section 57, asking for possession to be delivered;
• applied to the authority asking it to file a complaint under Section 64 against the company and its directors; and
• wrote to the developer pointing out both steps and offering to take possession on payment of the undisputed final instalment.

Within weeks, the developer withdrew the disputed demands and handed over possession. Faced with the prospect of a criminal complaint naming its directors, it saw no benefit in continuing.

Not every case resolves this neatly, especially where the developer is in financial distress. But where the developer can comply and is choosing not to, these provisions are effective.

When the developer is in insolvency

If the developer has been admitted into insolvency under the Insolvency and Bankruptcy Code, 2016, the moratorium under Section 14 of the Code generally stops proceedings to enforce money orders and penalty proceedings that are in substance recovery of money. Criminal proceedings stand on a different footing, and the position on them is more nuanced, though the Code also provides, in Section 32A, protection for the corporate debtor in certain circumstances once a resolution plan is approved. Buyers in this situation need to file their claims in the insolvency and follow the resolution process. See our page on builder insolvency.

Practical tips for buyers

• Start early. Don't wait months after the compliance period. Write to the developer, then move to recovery and Section 63 promptly.
• Use the tools together. Recovery under Section 40 for money, Section 63 for pressure, execution under Section 57 for tribunal orders, and Section 64 for serious, deliberate non-compliance.
• Keep the authority informed. Authorities respond to specific, documented reports of non-compliance.
• Coordinate with other buyers. A list of twenty unpaid orders against the same developer, presented together, carries more weight than one.
• Be ready to settle on enforceable terms. The point of enforcement is to get what the order gives you. A secured payment plan, recorded before the authority, may achieve that faster than a long fight.

How we help

1. Assess the order, what remains unperformed and which enforcement routes fit.
2. Send formal demands and track compliance periods.
3. File applications under Section 63 and represent buyers at the hearings.
4. File execution applications before the tribunal under Section 57.
5. Prepare requests to the authority to file complaints under Section 64, with the evidence needed against the company and responsible persons.
6. Coordinate recovery under Section 40 alongside penalty proceedings.
7. Negotiate and record settlements once the developer engages.

We act for buyers in these matters across Noida, Greater Noida, the Yamuna Expressway, Ghaziabad, Gurugram and Delhi.

Other kinds of orders that get ignored

Possession and money aren't the only orders developers fail to carry out. Others we see regularly include:

• Orders to fix defects under Section 14(3), where the developer has been directed to rectify structural or workmanship defects within 30 days or a set period. If the developer doesn't, Section 14(3) itself entitles the buyer to appropriate compensation, and the authority can impose Section 63 penalties. Buyers sometimes ask for permission to carry out the repairs themselves and recover the cost, which some authorities have allowed. See our page on defects.
• Orders to provide amenities such as a clubhouse, swimming pool, power backup or parking promised in the sanctioned plans. These often stall for the same reasons as the project itself: money and approvals. Asking the authority for a time-bound schedule, with reporting, is usually more productive than a penalty alone. See our page on missing amenities.
• Orders on maintenance and handover, such as directions to hand over common areas, maintenance funds and documents to the association of allottees, or to stop charging maintenance at a disputed rate. See our pages on handover to the RWA and maintenance charges.
• Orders to refund excess charges, which are money orders and can be recovered under Section 40.
• Directions to file information, such as quarterly updates or audit reports. These are between the developer and the authority, and the authority usually acts on them itself.

For associations, a single application listing all the orders in a project that haven't been complied with, and asking the authority to act on them together, can be more effective than individual applications.

For developers who can't comply in time

We also advise developers, and the advice to a developer that can't comply with an order on time is simple: don't ignore it. Silence is what turns an ordinary order into a Section 63 or 64 problem.

Instead:

• Tell the buyer, in writing, before the compliance period ends, what the difficulty is and what you propose.
• Make a part-payment if you can. It shows good faith and reduces the interest running.
• Propose a realistic schedule, ideally secured, for the balance.
• Apply to the authority for more time, with reasons and evidence, if the buyer won't agree. Authorities are more sympathetic to a developer that comes to them first than to one dragged in by an execution application.
• Appeal, if the order is wrong, within 60 days and with the pre-deposit. Don't use non-compliance as a substitute for an appeal.
• For possession orders, give the authority a clear completion schedule and keep it updated.

Developers sometimes assume that, because recovery is slow, ignoring orders costs nothing. It costs a great deal: interest continues to run, penalties can be imposed, directors can be exposed under Section 69, and the authority's view of the developer hardens in every other matter it hears. A developer with a track record of engaging, even when it can't pay immediately, is treated very differently.

Why the escalation matters

Before RERA, a buyer who won a consumer case against a developer often had to start a separate, slow execution process, with little leverage beyond the developer's wish to avoid embarrassment. The RERA scheme is deliberately layered: recovery as land revenue to get the money, daily penalties to make delay expensive, criminal liability for defiance of the tribunal, and personal exposure for those running the company. Not every layer is used in every case, and enforcement in practice is still slower than it should be. But for a buyer facing a developer that has the means to comply and is choosing not to, these provisions are worth using.

Evidence that makes enforcement easier

Authorities act faster on applications that leave nothing to guess. Before filing, collect: the order and proof of when it was received by the developer (an email, a speed post receipt, or the developer's own acknowledgement); your letter asking for compliance and any reply; photographs or a site report where the order concerns possession, amenities or defects; a calculation of amounts due with interest to date; and, where the developer claims it can't comply, anything that shows otherwise, such as recent sales of units in the same project, new launches by the group, or advertisements. Evidence that the developer is still selling or launching projects while ignoring orders is often the most persuasive material in a Section 63 or 64 application.

Frequently asked questions

What can I do if the builder ignores a RERA order?

Seek recovery as arrears of land revenue under Section 40 for money orders, and ask the authority to impose daily penalties under Section 63. For tribunal orders, seek execution under Section 57 and action under Section 64.

How much penalty can be imposed under Section 63?

A penalty for every day of default, cumulatively up to 5% of the estimated cost of the whole project.

Can a builder go to jail for not following a RERA order?

For orders of the Appellate Tribunal, Section 64 provides for imprisonment of up to three years, a daily fine up to 10% of the project cost, or both. Prosecution requires a complaint by the authority, and directors can be liable under Section 69.

Can I file the criminal complaint myself?

Generally not. Section 80 requires a complaint in writing by the authority or an officer it authorises. Buyers apply to the authority to file it.

Does the Section 63 penalty go to me?

No. It's paid to the government. It adds pressure on the developer but doesn't satisfy your claim, which you recover separately.

What if the builder can't give possession because the flat isn't ready?

Interest usually continues, the authority can require a completion schedule and impose penalties for unjustified delay, and in some cases you may seek a refund instead.

Can these proceedings continue if the builder is in insolvency?

Money recovery and related proceedings are generally stopped by the moratorium. Criminal proceedings are more complex. Claims must be filed in the insolvency.

General information about enforcement of orders under Sections 40, 57, 63, 64, 69, 70 and 80 of the Real Estate (Regulation and Development) Act, 2016. How actively authorities and tribunals use these powers differs between states and over time. Not legal advice.