Section 40 of RERA 2016: Recovery of Interest, Penalty, Compensation and Enforcement of Orders

Section 40 of the Real Estate (Regulation and Development) Act, 2016 (RERA) provides mechanisms for recovering unpaid interest, penalties and compensation and for enforcing directions or orders issued by the competent RERA forum. The section distinguishes recovery of monetary dues from enforcement of orders requiring a person to do, or refrain from doing, an act.

Section 40: Statutory provisions

Section 40(1): Recovery of interest, penalty or compensation

If a promoter or an allottee or a real estate agent, as the case may be, fails to pay any interest or penalty or compensation imposed on him, by the adjudicating officer or the Regulatory Authority or the Appellate Authority, as the case may be, under this Act or the rules and regulations made thereunder, it shall be recoverable from such promoter or allottee or real estate agent, in such manner as may be prescribed as an arrears of land revenue.

Section 40(2): Enforcement of directions and orders

If any adjudicating officer or the Regulatory Authority or the Appellate Tribunal, as the case may be, issues any order or directs any person to do any act, or refrain from doing any act, which it is empowered to do under this Act or the rules or regulations made thereunder, then in case of failure by any person to comply with such order or direction, the same shall be enforced, in such manner as may be prescribed.

Note: The original webpage reproduced only the beginning of subsection (2). Its remaining operative words have been restored above so the statutory provision is not left incomplete. For formal reliance, consult the current authoritative Act and the rules applicable in the relevant State or Union Territory.

Meaning and scope of Section 40

Monetary recovery under subsection (1)

Where a promoter, allottee or real estate agent fails to pay an amount imposed as interest, penalty or compensation by a competent forum, subsection (1) permits recovery as arrears of land revenue in the manner prescribed. This is a statutory recovery route; the detailed application, certificate, recovery authority and procedural steps may depend on the relevant State or Union Territory RERA Rules and valid procedural directions.

Enforcement of non-monetary orders under subsection (2)

Some RERA orders require performance rather than payment: for example, providing specified documents, complying with a lawful direction or stopping a prohibited practice. Subsection (2) addresses failure to obey an order to do or refrain from doing an act. The mode of enforcement is prescribed by applicable rules. A party should identify the precise operative directions, evidence of non-compliance and the relief sought.

Important terms and legal provisions

Promoter - Section 2(zk): Includes persons undertaking or causing construction or development of a real estate project for sale, and other persons covered by the statutory definition.
Allottee - Section 2(d): Generally, the person to whom a plot, apartment or building has been allotted, sold or otherwise transferred by the promoter, including a subsequent acquirer, subject to the statutory exclusions.
Real estate agent - Section 2(zm): A person who negotiates or acts on behalf of another in a transfer of a plot, apartment or building in a real estate project for remuneration or charges, as covered by the Act.
Regulatory Authority: The Real Estate Regulatory Authority established for the relevant jurisdiction under Section 20.
Adjudicating officer - Section 71: An officer appointed to adjudge compensation under the provisions specified in Section 71, subject to the statutory allocation of functions.
Appellate Tribunal - Section 43: The tribunal established to hear appeals under the Act, with appeals governed principally by Section 44.

Practical steps for seeking enforcement

Obtain the order: Retain the authenticated order, case number, date and the operative directions.
Establish default: Record the payment due, compliance deadline (if any), amounts paid and evidence that the respondent has not complied.
Check the governing rules: Use the applicable State or Union Territory RERA Rules and the forum's notified filing or execution procedure; do not assume procedures are identical nationwide.
Apply to the competent forum: Seek recovery of monetary dues under subsection (1), or enforcement of a non-monetary direction under subsection (2), as appropriate.
Track recovery or compliance: Follow notices, certificates, recovery proceedings or further directions issued by the competent authority.

Section 31 concerns filing complaints; Section 37 authorises binding directions; Section 38 addresses penalties, interest and procedure; and Section 39 concerns limited rectification of mistakes apparent from the record. Appeals and adjudication may also involve Sections 43, 44 and 71. Section 40 is concerned with enforcement of an operative order; it is not itself a general appeal or review provision.

Frequently asked questions

Can RERA recover compensation and interest if a promoter does not pay?

Section 40(1) provides for recovery of unpaid interest, penalty or compensation imposed by the competent RERA forum as arrears of land revenue, following the prescribed procedure.

Does Section 40 apply only to promoters?

No. Subsection (1) expressly includes promoters, allottees and real estate agents, as applicable. Subsection (2) addresses non-compliance by any person bound by a valid order or direction.

Is the procedure the same across India?

No. The Act establishes the power, while applicable rules and lawful procedural directions determine the mode of recovery or enforcement in a particular jurisdiction.

Official legal resources

Consult the Real Estate (Regulation and Development) Act, 2016 on India Code (official PDF) and the Ministry of Housing and Urban Affairs. For recovery procedures, verify the current rules and notices published by the concerned State or Union Territory RERA Authority.