Real Estate (Regulation and Development) Act, 2016
Section 63 of RERA: Penalty for Failure by a Promoter to Comply with Authority Orders
Section 63 of the Real Estate (Regulation and Development) Act, 2016 (RERA) provides for a daily monetary penalty when a promoter fails to comply with, or contravenes, an order or direction of the Real Estate Regulatory Authority. The total penalty may extend to 5% of the estimated cost of the real estate project, as determined by the Authority.
Text of Section 63
If any promoter, who fails to comply with, or contravenes any of the orders or directions of the Authority, he shall be liable to a penalty for every day during which such default continues, which may cumulatively extend up to five per cent., of the estimated cost of the real estate project as determined by the Authority.
Meaning and scope of Section 63
The provision applies to a promoter, a term defined in Section 2(zk) of RERA and covering, among others, persons who construct or develop a real estate project for sale in the circumstances specified in that definition. The Authority means the Real Estate Regulatory Authority established under Section 20, read with the definition in Section 2(i).
A failure to carry out a binding direction of the Authority, or conduct contrary to that direction, may attract Section 63. The provision addresses non-compliance with an Authority order; it does not by itself prescribe the penalty for every breach of RERA.
How is the penalty calculated?
The penalty accrues for each day the default continues. The Act prescribes a cumulative maximum of 5% of the estimated project cost determined by the Authority; it does not impose an automatic fixed daily rate of 5% or require the maximum in every case.
For illustration only, where the Authority determines the estimated project cost at Rs. 20 crore, the statutory ceiling under Section 63 would be Rs. 1 crore. The actual penalty and its assessment depend on the relevant order, period of default and applicable legal requirements.
Procedure and available remedies
The Authority may exercise its powers under the Act to address non-compliance. Section 38 concerns the Authority's powers and the requirement to be guided by principles of natural justice. Section 40 deals with recovery of specified interest, penalties and compensation and enforcement of orders, subject to the applicable rules.
An aggrieved person may examine the appeal remedy under Section 44 before the Real Estate Appellate Tribunal, subject to limitation and statutory conditions, including the promoter's pre-deposit requirement where applicable. The facts, order and relevant State or Union Territory rules should be reviewed before taking action.
Difference between Sections 61, 63 and 64
Section 61 generally concerns a promoter's contravention of provisions of the Act other than those specifically addressed in Sections 3 and 4 or the rules and regulations. Section 63 concerns non-compliance with orders or directions of the Authority. Section 64 separately addresses a promoter's failure to comply with orders or directions of the Appellate Tribunal and provides different consequences.
Official statutory and regulatory resources
Consult the India Code portal for the central Act and the Ministry of Housing and Urban Affairs for central RERA information. For proceedings, notifications, orders and State-specific rules, consult the relevant State or Union Territory RERA Authority's official website.
Note: This article explains the central statutory provision. State rules, orders and judicial interpretations may affect its application to an individual dispute.