Real Estate (Regulation and Development) Act, 2016

Section 7: Revocation of Real Estate Project Registration under RERA

Section 7 of the Real Estate (Regulation and Development) Act, 2016 (RERA) empowers the Real Estate Regulatory Authority to revoke a real estate project's registration for statutory defaults, breach of approvals, unfair practices or fraud. Revocation is subject to a written notice of at least 30 days and consideration of the promoter's response. The Authority may instead allow registration to continue on conditions protecting allottees.

Grounds for revocation under Section 7(1)

The Authority may act on a complaint, on its own motion (suo motu), or on the recommendation of the competent authority. It must be satisfied that one or more statutory grounds exist:

Statutory default - clause (a): the promoter fails to comply with the Act, applicable rules or regulations.
Breach of approval - clause (b): the promoter violates conditions imposed by the competent authority.
Unfair practices or irregularities - clause (c): deceptive or misleading representations, false claims about approvals, affiliations or standards, or advertising services not intended to be offered.
Fraudulent practices - clause (d): the promoter engages in fraudulent conduct.

Mandatory notice and opportunity to respond - Section 7(2)

Before revoking registration granted under Section 5, the Authority must issue a written notice of not less than 30 days, setting out the proposed grounds, and consider any cause shown by the promoter within that notice period. A complaint does not automatically revoke registration: the Authority must examine the facts and follow the prescribed procedure.

Conditional continuation instead of revocation - Section 7(3)

Where protection of allottees warrants it, the Authority may permit the registration to remain in force subject to additional terms and conditions. These conditions bind the promoter. This provision provides a statutory alternative to immediate revocation.

Consequences of revocation - Section 7(4)

Publication and access: the promoter is barred from accessing the Authority's website for the affected project; the Authority lists the promoter as a defaulter, displays the promoter's photograph and informs other State and Union Territory Authorities.
Completion of works: the Authority facilitates remaining development in accordance with Section 8.
Project bank account: the bank holding the separate project account referred to in Section 4(2)(l)(D) must be directed to freeze it; the Authority may subsequently take necessary steps, including de-freezing, to facilitate completion under Section 8.
Protective directions: the Authority may issue further directions in the interests of allottees or the public.

Relevant statutory terms and connected provisions

Promoter: broadly, a person who constructs or develops a real estate project for sale, including persons covered by Section 2(zk). Allottee: a person to whom a plot, apartment or building is allotted, sold or otherwise transferred, subject to the definition in Section 2(d). Competent authority: the local authority or other authority empowered to grant relevant development permissions under Section 2(p).

Section 3 governs prior registration; Section 5 governs grant; Section 6 governs extension; and Section 8 governs remaining development after lapse or revocation. Appeals against relevant orders are governed by Section 44, subject to its statutory requirements.

Practical implications for promoters and allottees

A promoter responding to a show-cause notice should address each allegation with project approvals, compliance records, disclosures and evidence of remedial steps. Allottees should retain agreements, payment records, correspondence, advertisements and relevant project disclosures. Project-specific remedies and procedures also depend on applicable State or Union Territory RERA rules, regulations and Authority orders.

Section 7: Statutory provisions

The following preserves the substance and clause structure of Section 7, including the statutory safeguards and consequences:

(1) The Authority may, on receipt of a complaint or suo motu in this behalf or on the recommendation of the competent authority, revoke the registration granted under section 5, after being satisfied that-

(a) the promoter makes default in doing anything required by or under this Act or the rules or the regulations made thereunder;

(b) the promoter violates any of the terms or conditions of the approval given by the competent authority;

Explanation.-For the purposes of this clause, the term "unfair practice" means a practice which, for the purpose of promoting the sale or development of any real estate project adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-

(A) the practice of making any statement, whether in writing or by visible representation which,-

(i) falsely represents that the services are of a particular standard or grade;

(ii) represents that the promoter has approval or affiliation which such promoter does not have;

(iii) makes a false or misleading representation concerning the services;

(B) the promoter permits the publication of any advertisement or prospectus whether in any newspaper or otherwise of services that are not intended to be offered;

(d) the promoter indulges in any fraudulent practices.

(2) The registration granted to the promoter under section 5 shall not be revoked unless the Authority has given to the promoter not less than thirty days notice, in writing, stating the grounds on which it is proposed to revoke the registration, and has considered any cause shown by the promoter within the period of that notice against the proposed revocation.

(3) The Authority may, instead of revoking the registration under sub-section (1), permit it to remain in force subject to such further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed shall be binding upon the promoter.

(4) The Authority, upon the revocation of the registration,-

(a) shall debar the promoter from accessing its website in relation to that project and specify his name in the list of defaulters and display his photograph on its website and also inform the other Real Estate Regulatory Authority in other States and Union territories about such revocation of registration;

(b) shall facilitate the remaining development works to be carried out in accordance with the provisions of section 8;

(c) shall direct the bank holding the project bank account, specified under sub-clause (D) of clause (l) of sub-section (2) of section 4, to freeze the account, and thereafter take such further necessary actions, including consequent de-freezing of the said account, towards facilitating the remaining development works in accordance with the provisions of section 8;

(d) may, to protect the interest of allottees or in the public interest, issue such directions as it may deem necessary.

Official legal resources

For the enacted law, consult the India Code official legislation portal (search for the Real Estate (Regulation and Development) Act, 2016), the Ministry of Housing and Urban Affairs and the relevant State or Union Territory Real Estate Regulatory Authority for rules, orders and project records.