Offences, Penalties and Adjudication — Land Law Notes

Offences, Penalties and Adjudication

A law is only as strong as its penalties. RERA’s drafters knew that a builder would ignore duties that cost nothing to breach, so they attached teeth to every obligation — and made the penalties bite where it hurts a developer most: a percentage of the project’s cost, running per day for continuing defaults, and, for defying the Tribunal, jail. The trick to this topic is to see the pattern: the worse the wrong (non-registration, defying the Tribunal) the heavier the penalty, climbing from a percentage fine all the way to imprisonment.

The scheme of penalties

Here is the everyday picture: think of the penalties in sections 59 to 72 as a staircase. Ordinary contraventions attract a percentage-of-cost fine; continuing defaults add a daily fine; and the gravest wrong — flouting an order of the Appellate Tribunal — brings imprisonment. Penalties fall on all three players — promoter, agent and allottee — but weigh most heavily on the promoter, who holds the buyer’s money.

Section 59, RERA, 2016: “If any promoter contravenes the provisions of section 3, he shall be liable to a penalty which may extend up to ten per cent. of the estimated cost of the real estate project … on continued violation, he shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten per cent. of the estimated cost of the real estate project, or with both.”

In Simple Terms: Sell a project without registering it, and you can be fined up to 10% of its cost; keep doing it after the Authority tells you to stop, and you can add another 10% fine and go to jail for up to three years. Non-registration is the cardinal sin, so it carries the heaviest opening penalty.

A. Penalties on the PROMOTER (ss. 59–64)

Non-registration of the project (s. 59) — up to 10% of the estimated project cost; continued default — up to a further 10% and/or imprisonment up to 3 years.
False information / breach of s. 4 (s. 60) — up to 5% of the estimated project cost.
Contravention of any other provision (s. 61) — up to 5% of the estimated project cost.
Failure to comply with the Authority’s orders (s. 63) — a penalty for every day of default, cumulatively up to 5% of the project cost.
Failure to comply with the Tribunal’s orders (s. 64) — imprisonment up to 3 years, or a daily fine cumulatively up to 10% of the project cost, or both.

B. Penalties on the AGENT (ss. 62, 65–66)

Non-registration / breach of s. 9 or 10 (s. 62) — Rs. 10,000 per day of default, cumulatively up to 5% of the cost of the plot/apartment/building facilitated.
Failure to comply with the Authority’s orders (s. 65) — daily penalty cumulatively up to 5% of the cost facilitated.
Failure to comply with the Tribunal’s orders (s. 66) — imprisonment up to 1 year, or a daily fine cumulatively up to 10%, or both.

C. Penalties on the ALLOTTEE (ss. 67–68)

Failure to comply with the Authority’s orders (s. 67) — daily penalty cumulatively up to 5% of the plot/apartment/building cost.
Failure to comply with the Tribunal’s orders (s. 68) — imprisonment up to 1 year, or a daily fine cumulatively up to 10%, or both.

⚠️ Do NOT say only the builder can be penalised. The allottee too faces penalties for defying an order — RERA is even-handed, and an answer that treats penalties as one-sided is incomplete.

D. Offences by companies, compounding, and adjudication (ss. 69–72)

Offences by companies (s. 69). Where a company commits an offence, the person in charge of its business, and the company, are both liable — unless he proves the offence was without his knowledge or that he exercised due diligence.
Compounding of offences (s. 70). An offence punishable with imprisonment may be compounded by the court, before or after prosecution, on payment of a sum not exceeding the maximum fine.
Power to adjudicate (s. 71). For adjudging compensation under sections 12, 14, 18 and 19, the Authority appoints an adjudicating officer — a person who is or has been a District Judge — who holds an inquiry (after a hearing) and must dispose of it within 60 days. He has civil-court powers to summon and examine.
Factors for adjudging the quantum (s. 72). In fixing the amount, the adjudicating officer considers the disproportionate gain or unfair advantage made, the loss caused to the person affected, and the repetitive nature of the default.

🔑 Note the split: the adjudicating officer decides compensation (ss. 12, 14, 18, 19); the Authority decides penalties and other contraventions. The Supreme Court drew this exact line in Newtech Promoters (2021).

🧩 WORKED EXAMPLE — penalty climbing the staircase

Facts. A promoter sells an unregistered project. The Authority orders him to stop and register; he ignores it. The Appellate Tribunal later orders him to refund the buyers; he defies that too.

Rule. Section 59 penalises non-registration (up to 10%, then further 10% and/or 3 years’ jail on continued default); s. 63 penalises defying the Authority (up to 5%, daily); s. 64 penalises defying the Tribunal (imprisonment up to 3 years or up to 10% fine or both).

Apply. Selling unregistered draws the s. 59 penalty (up to 10%); ignoring the Authority’s order adds the s. 63 daily penalty (up to 5%); and defying the Tribunal’s refund order exposes him to imprisonment up to 3 years under s. 64. Each fresh act of defiance moves him up the staircase.

Conclusion. The penalties escalate with the gravity of the defiance, ending in jail for flouting the Tribunal — which is why the topic is best written as a graded staircase, not a flat list.

flowchart TD
    ROOT["Offences, Penalties & Adjudication<br/>(ss. 59-72)"]:::root
    ROOT --> PR["PROMOTER<br/>s.59 non-registration: up to 10%<br/>(+10% &/or 3 yrs jail on default)<br/>s.60/61 other breaches: up to 5%<br/>s.63 defy Authority: up to 5% daily<br/>s.64 defy Tribunal: jail 3 yrs / 10%"]:::leaf
    ROOT --> AG["AGENT<br/>s.62 no registration: Rs.10,000/day, up to 5%<br/>s.65 defy Authority: up to 5%<br/>s.66 defy Tribunal: jail 1 yr / 10%"]:::leaf
    ROOT --> AL["ALLOTTEE<br/>s.67 defy Authority: up to 5%<br/>s.68 defy Tribunal: jail 1 yr / 10%"]:::leaf
    ROOT --> AD["ADJUDICATION<br/>s.71 adjudicating officer (District Judge)<br/>decides compensation (ss.12,14,18,19), 60 days<br/>s.72 factors: gain, loss, repetition"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,stroke-width:1px,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

Case Laws

M/s Newtech Promoters and Developers Pvt. Ltd. vs State of Uttar Pradesh (2021) — clarified that the adjudicating officer decides claims for compensation (ss. 12, 14, 18, 19) under section 71, while the Authority handles refund/interest and penalties — the jurisdictional split at the heart of adjudication.
Neelkamal Realtors and Developers Pvt. Ltd. vs Union of India (2017) — upheld RERA’s penalty provisions, including imprisonment for defying the Tribunal, as a proportionate and valid enforcement scheme.

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