Best Builder Not Paying After RERA Order? Recovery Certificate & Execution Lawyer

Winning a RERA order is a real achievement. Getting paid can be a different story. Across the NCR, thousands of buyers hold orders for refunds or interest that developers haven't paid. Some developers pay within weeks. Some pay only when the district administration starts attaching their bank accounts. And some, already in deep financial trouble, can't pay at all.

The Real Estate (Regulation and Development) Act, 2016 gives buyers a strong enforcement tool: amounts due under RERA orders are recoverable as arrears of land revenue, the same way the state recovers unpaid revenue dues. This page explains how that works, how the process differs between UP, Haryana and Delhi, what buyers can do to speed things up, and what other options exist when recovery stalls.

What the Act says

Section 40(1) provides that if a promoter, allottee or real estate agent fails to pay any interest, penalty or compensation imposed on it by the adjudicating officer, the authority or the Appellate Tribunal, it shall be recoverable from that person in the manner prescribed by the rules, as an arrears of land revenue.

Section 40(2) adds that if any adjudicating officer, the authority or the tribunal issues directions or orders and they aren't complied with, the order may be enforced in the manner prescribed by the rules.

Courts and authorities have read Section 40 to cover refund orders as well as interest, penalty and compensation, since a refund order is ordinarily an order to pay the principal with interest.

"Arrears of land revenue" is important because it plugs RERA orders into the state's revenue recovery machinery. In each state, the revenue law gives the Collector (the District Magistrate) and revenue officers wide powers to recover dues, including attaching and selling movable and immovable property and attaching bank accounts. Revenue laws in some states also allow arrest and detention of a defaulter in certain circumstances, subject to the safeguards in that law.

Before recovery: the compliance period

Most RERA orders give the developer a period to comply. State rules commonly require refunds to be paid within 45 days of becoming due, and orders often specify 45, 60 or 90 days. Recovery proceedings usually begin only after that period has passed without payment.

During that time, it's worth:

• sending the developer a copy of the order with a letter asking for payment and giving your bank details, so there can be no argument that it didn't know where to pay;
• keeping a record of any payments received and any communication; and
• checking whether the developer has appealed. An appeal by a developer requires a pre-deposit under Section 43(5), which secures your money (see our page on the pre-deposit rule). An appeal doesn't automatically stop recovery unless the tribunal grants a stay.

Uttar Pradesh: recovery certificates

In UP, recovery is through a recovery certificate (RC). The process typically works like this:

1. After the compliance period, the buyer applies to UP RERA (usually through the portal, in the complaint itself or by a separate application) stating that the order hasn't been complied with.
2. UP RERA calculates the amount due under the order, including interest up to a date, and issues a recovery certificate addressed to the District Magistrate (Collector) of the district where the developer's registered office or property is located, for example Gautam Buddh Nagar for Noida and Greater Noida, or Ghaziabad.
3. The Collector's office sends the RC to the relevant tehsil, where revenue officers start recovery under the Uttar Pradesh Revenue Code, 2006 and its rules.
4. Revenue officers issue a demand to the developer, and if it isn't paid, can attach bank accounts, attach and auction unsold units or land, and take other coercive steps the revenue law allows.
5. Amounts recovered are paid to the buyer through the authority or the Collector's office.

UP RERA has issued very large numbers of recovery certificates against NCR developers over the years, running into thousands of crores in total. Recovery rates have varied a great deal. Some developers paid promptly once an RC was issued; others have had RCs pending for years. The authority and the state government have, from time to time, run special drives, held review meetings with district officials and published lists of defaulting developers.

Practical experience suggests that recovery moves faster when the buyer stays involved: following up with the tehsil, identifying the developer's assets and bank accounts, and asking the authority to review progress.

Haryana: execution proceedings

In Haryana, buyers with orders from Haryana RERA (Gurugram or Panchkula) usually begin by filing an execution application before the authority, asking it to enforce its order. The authority can then:

• direct the developer to appear and explain non-payment;
• direct the developer to disclose its bank accounts and assets;
• direct attachment of the developer's bank accounts or unsold units, through the appropriate officers;
• refer the matter to the Collector for recovery as arrears of land revenue under the state's revenue law; and
• start proceedings for penalties under Section 63 for non-compliance.

The authority's own active role in execution has made recovery in some Haryana matters relatively quick, particularly where the developer has bank balances or unsold inventory that can be attached. Where the developer has few assets, the process is slower everywhere.

Orders of the Haryana Appellate Tribunal can be executed as a civil court decree under Section 57, and are often executed through the authority's process as well.

Delhi

Delhi's rules similarly provide for recovery as arrears of land revenue through the revenue authorities, alongside the authority's own powers to enforce its orders. The number of RERA-registered projects in Delhi is smaller than in UP and Haryana, but the same principles apply.

What can be attached

Recovery is against the person liable under the order, usually the promoter company. Assets that revenue officers commonly target include:

• bank accounts of the developer, other than the separate RERA project account, which is meant for construction (authorities and courts have sometimes been reluctant to allow buyers' recoveries to drain a project account needed to complete the project, since that would harm other buyers);
• unsold units in the developer's projects, which can be attached and sold;
• land owned by the developer;
• receivables, such as amounts due to the developer from other buyers, by directing those buyers to pay the revenue officers instead; and
• other property of the company, including vehicles and office premises.

Several difficulties come up repeatedly:

• Land held under lease from a development authority (common in Noida and Greater Noida) may be subject to the authority's prior claims for unpaid land dues.
• Assets held by group companies rather than the promoter company aren't ordinarily available, unless they are shown to be the promoter's assets or the group company is itself liable.
• Mortgaged assets are subject to lenders' security.
• Directors' personal assets aren't ordinarily liable for a company's debts. Personal liability can arise in limited circumstances, such as where directors are themselves parties to the order, or where criminal law or company law provides for it, but a recovery certificate against a company is not by itself a claim against its directors' homes.

Helping recovery along

Buyers can do several things to make recovery more effective.

Find the assets

Revenue officers have many demands on their time. A buyer who gives them specific information gets better results. Useful sources include the developer's project pages on the RERA portal (showing unsold inventory and bank details), its filings with the Registrar of Companies (showing assets, charges and group companies), land records, and other buyers' knowledge of what's happening in the project.

Follow up

Ask the authority for the RC number and the date it was sent to the Collector. Then follow up with the Collector's office and the tehsil, in writing, referring to the RC. Keep copies.

Act together

Where many buyers in a project hold unpaid orders, a joint approach to the Collector, with a consolidated list of RCs and identified assets, is more effective than many individual follow-ups. Associations of allottees have had success with this.

Ask the authority to review

Authorities hold review meetings and can call for reports from district officials on RCs pending with them. An application asking the authority to review progress on a specific RC, with details of the delay, can prompt action.

Use the penalty provisions

Under Section 63, a promoter that fails to comply with the authority's orders is liable to a penalty for every day of default, up to 5% of the estimated cost of the project. For tribunal orders, Section 64 provides for a penalty up to 10% or imprisonment up to three years, or both. These proceedings put additional pressure on developers. See our page on builders ignoring orders.

When the developer can't pay: insolvency

Sometimes the problem isn't that the developer won't pay, but that it can't. Many of the developers with the most unpaid RCs in the NCR are in serious financial difficulty, and some have gone into insolvency.

Once a developer is admitted into the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, a moratorium under Section 14 of the Code applies. It prohibits the institution or continuation of proceedings against the developer, including execution of orders and recovery of money. Pending RCs are effectively frozen, and buyers must file their claims with the resolution professional instead (for homebuyers, usually in Form CA). See our pages on builder insolvency and filing claims in Form CA.

A buyer who holds a RERA order goes into the insolvency as an allottee, with a claim for the amount due. The Supreme Court held in Vishal Chelani v. Debashis Nanda (2023) that allottees who had obtained refund orders from RERA couldn't be treated as a separate, better class than other allottees in the resolution process. So a RERA order doesn't give priority in insolvency, though it does make the amount of the claim clear.

Buyers can also consider starting insolvency themselves, as financial creditors under Section 7 of the Code, but homebuyers must meet the threshold added in 2020: at least 100 allottees or 10% of the total allottees in the same project, whichever is less. The Supreme Court upheld that threshold in Manish Kumar v. Union of India (2021). Insolvency is a serious step with consequences for everyone in the project, and isn't usually the first choice for buyers who want their flats; it's more often considered where the developer is plainly insolvent and recovery is going nowhere.

Recovering from a developer that is building

A harder situation is a developer that is still trying to complete a project but has many unpaid orders. Aggressive recovery, such as attaching the developer's bank accounts and unsold inventory, may get some buyers paid but could stop construction for everyone else. Authorities and district officials are aware of this tension.

In these situations, structured solutions sometimes work better than individual recovery: a payment schedule for refund-seekers funded from sales of unsold inventory, agreed with the authority's oversight, or a project-level settlement. Buyers who want refunds are entitled to pursue recovery, and nothing obliges them to wait. But it helps to understand the wider position when deciding how hard to push and what to accept.

An illustration

Here's a made-up example. A buyer in a Greater Noida West project obtained a UP RERA order in 2022 for a refund of Rs 52 lakh with interest. The developer didn't pay. An RC was issued for about Rs 68 lakh and sent to the Collector, Gautam Buddh Nagar. A year later, nothing had happened.

The buyer then:

• obtained the RC number and dispatch details from UP RERA;
• checked the project's RERA page and found that 40 units were shown as unsold;
• checked the company's filings and found that it had an operational current account with a named bank, from a charge filed by that bank;
• joined 25 other buyers with RCs against the same developer to write jointly to the Collector, with a list of RCs and the identified assets; and
• applied to UP RERA asking it to call for a status report from the district.

The tehsil attached the bank account and issued notices for the attachment of several unsold units. Within a few months, the developer approached the buyers with a proposal to pay the RCs in instalments from sales of those units, in exchange for lifting the attachments as each payment was made. The buyers accepted, with a condition that attachments would be restored immediately on any default.

Not every case ends this well, but it shows what active follow-up can achieve.

Why recovery stalls

From the cases we see, recovery usually gets stuck for one or more of these reasons:

• The RC never reached the right office. It was sent to the wrong district, or to the right district but not passed on to the tehsil. A simple written inquiry often reveals this.
• The developer's address is out of date. Notices are returned unserved, and nothing further happens. Updated addresses from company filings help.
• No assets have been identified. Revenue officers can't attach what they can't find.
• Competing claims. Several hundred RCs against the same developer, plus the development authority's land dues and lenders' security, all competing for the same limited assets.
• Insolvency. The developer has gone into insolvency and the moratorium applies, which buyers sometimes don't learn about for months.
• Informal holds. District officials sometimes hold back on attachment where the developer has promised to pay or where attachment would stop construction. Asking the authority to review progress, in writing, can help bring these into the open.

RERA orders compared with consumer commission orders

Buyers who went to the consumer commission instead of RERA enforce their orders differently. Under the Consumer Protection Act, 2019, orders of the District, State and National Commissions are enforceable as decrees of a civil court, and non-compliance can be punished under Section 72 of that Act with imprisonment (from one month up to three years), a fine, or both. Consumer commissions have issued warrants against developers' directors in some high-profile cases, which can be a powerful lever. But execution through the commissions is often slow too, and recovery from a developer with no assets is no easier in one forum than another. See our page on consumer court cases.

A buyer can't use both routes for the same claim, but where a buyer has an order from one forum, the enforcement tools of that forum are worth using fully.

What to keep in your file

• the RERA order (and any tribunal order), with the date you received it;
• your letter demanding payment, and proof it was delivered;
• the application for recovery or execution, and the RC number and date;
• any correspondence with the authority, the Collector's office and the tehsil;
• details of the developer's assets you have identified, with sources;
• a running calculation of the amount due, including interest; and
• a record of any payments received, with dates.

With this file in order, it's much easier to follow up, to join forces with other buyers, to file a claim in insolvency if it comes to that, or to check that a final payment is correct.

Co-promoters and landowners

The Act's definition of "promoter" in Section 2(zk) is wide, and its explanation makes the person who constructs and the person who sells, where they are different, jointly liable as promoters for the functions and responsibilities under the Act. In many NCR projects, a landowner company and a developer company are both promoters under a joint development or collaboration arrangement. Where the RERA order names both, or the authority has held both liable, recovery can be pursued against either. If your order names only the developer and the developer has no assets, it may be worth taking advice on whether the landowner co-promoter can be brought in, for example through an application to the authority. Whether that's possible depends on the project's registration documents, the agreements and how the order was framed.

Interest while waiting

Most RERA refund orders award interest until the date of actual payment, not just until the date of the order. So while recovery is pending, interest continues to run. When the RC is issued, it usually states the amount up to a particular date, and buyers can ask for the figure to be updated when payment is finally made. Keep track of the calculation so that you don't accept less than is due when the money arrives.

Recovering from buyers and agents

Section 40 works both ways. If a buyer is ordered to pay a developer, for instance interest on late instalments, or an agent is ordered to pay a penalty, the same recovery machinery applies. Developers holding orders against buyers can use it, though in practice this is less common.

How we help

1. Check the order and calculate the amount due, including interest to date.
2. Send the formal demand to the developer and track the compliance period.
3. Apply for a recovery certificate (UP) or file execution proceedings (Haryana, Delhi).
4. Research the developer's assets, bank accounts, unsold inventory and group structure.
5. Follow up with the authority, the Collector and the tehsil, and apply for review where recovery stalls.
6. Start Section 63 or 64 penalty proceedings where appropriate.
7. Coordinate with other buyers holding orders against the same developer.
8. Advise on insolvency options where the developer can't pay, and file claims if insolvency has begun.
9. Negotiate payment plans that are secured and enforceable.

We regularly handle recovery for buyers in Noida, Greater Noida, the Yamuna Expressway, Ghaziabad and Gurugram, and know the district offices involved.

Frequently asked questions

What is a RERA recovery certificate?

In UP, it's a certificate issued by the authority to the District Magistrate stating the amount a developer owes under a RERA order, so that the district administration can recover it as arrears of land revenue under Section 40.

How long after the order can I apply for recovery?

After the compliance period in the order or the rules expires, commonly 45 to 90 days, without payment.

What can the district administration attach?

The developer's bank accounts, unsold units, land, receivables and other property, subject to prior claims such as lenders' security and land dues to development authorities.

Can the builder's directors be made to pay personally?

Not ordinarily. Recovery is against the company named in the order. Directors may be personally liable only in limited circumstances.

Does a builder's appeal stop recovery?

Not automatically. The tribunal must grant a stay. Developers must make a pre-deposit to appeal, which secures the amount.

What happens if the builder goes into insolvency?

A moratorium stops recovery. You must file your claim with the resolution professional, as an allottee. A RERA order doesn't give priority over other homebuyers.

Does interest continue while recovery is pending?

Usually yes, if the order awards interest until payment. Ask for the amount to be updated when payment is made.

Is there anything else I can do if recovery is stuck?

Help identify assets, follow up in writing, act with other buyers, ask the authority to review progress, and seek penalties for non-compliance under Section 63 or 64.

General information about recovery and enforcement under Sections 40, 57, 63 and 64 of the Real Estate (Regulation and Development) Act, 2016. Recovery procedures depend on each state's rules and revenue law and on district practice, which differ and change. Not legal advice.