Rajasthan RERA Imposes 50 Lakh Fine On Builder For Failure To Register Project Under RERA

Background Fact

On 19.10.24, the Authority issued a show cause notice to the builder after taking suo moto cognizance of the case, in which the builder was asked to provide an explanation as to why a penalty should not be imposed on them under Section 59(1) of RERA.

Subsequently, in an order passed by the Authority dated 12.02.21, the Authority directed the builder to register the project under Section 3 of RERA within 45 days.

Later, on 09.05.22, the Authority passed another order in which it directed the builder to register the entire project City Trade Center as one single project or as two independent phases of the project within 30 days. Despite two orders, the builder failed to register the project under Section 3 of RERA 2016.

RERA Order

The Authority observed that the Builder has neither registered the project till now despite repeated directives from the Authority nor offered any explanation. Therefore, it is evident that the builders have failed to comply with the Authority's orders to register the project under Section 3 of the Act.

The Authority referred to Section 59 of The Real Estate (Regulation and Development) Act, 2016, which reads as follows:

Section 59: Punishment for non-registration under Section 3.

(1) If any promoter contravenes the provisions of Section 3, they shall be liable to a penalty of up to ten percent of the estimated cost of the real estate project as determined by the Authority.

(2) If any promoter does not comply with the orders, decisions, or directions issued under subsection (1) or continues to violate the provisions of Section 3, they shall be punishable with imprisonment for a term of up to three years or with a fine of up to a further ten percent of the estimated cost of the real estate project, or with both.

Furthermore, the Authority noted that the total cost of the project amounts to Rs. 11,00,28,5551, inclusive of the estimated building cost and the cost of the land. Therefore, in accordance with the provision of Section 59(1), the Authority imposed a fine of Rs. 50 lakhs on the builders.