Punjab RERA Orders PUDA to Refund ₹21 Lakh to Allottee Despite Payment Defaults

Rajesh Verma v. Punjab Urban Planning and Development Authority (PUDA)
GC No. 0512/2022

The Punjab Real Estate Regulatory Authority (Punjab RERA) has held that where both the allottee and the developer are found to have breached their respective obligations, neither party can ordinarily claim equitable relief such as specific performance or forfeiture of earnest money.

The Authority, chaired by Rakesh Kumar Goyal, accordingly directed the Punjab Urban Planning and Development Authority (PUDA) to refund ₹21 lakh deposited by allottee Rajesh Verma, along with interest. The total amount payable was assessed at ₹43.68 lakh as on August 31, 2026.

Dispute Over 400-Square-Yard Plot in Mohali

The case concerned a 400-square-yard residential plot in Gateway City, Sector 118-119, SAS Nagar, Mohali.

PUDA issued a Letter of Intent to Verma on July 10, 2015, for a tentative consideration of ₹84 lakh. An allotment letter was subsequently issued on August 16, 2016, pursuant to which Verma deposited ₹21 lakh towards the plot.

Verma thereafter failed to pay instalments due on August 17, 2017, February 17, 2018 and August 17, 2018.

He contended that the project had not been adequately developed and sought possession without interest on the outstanding dues. Alternatively, he sought a refund of the amount deposited along with interest.

Allottee's Payment Defaults Not Justified

PUDA informed Verma in February 2019 that possession was available and called upon him to clear the outstanding amount along with interest. Verma, however, did not act upon the offer.

Punjab RERA noted that the payment schedule under the allotment was not linked to the progress of development. It therefore rejected the contention that Verma was justified in withholding the instalments and held that he had defaulted on his payment obligations.

PUDA Also Found at Fault

At the same time, the Authority found shortcomings on PUDA's part concerning the timely offer of possession.

Punjab RERA noted that PUDA had the power under Section 45(3) of the Punjab Regional and Town Planning and Development Act, 1995, to cancel the allotment and forfeit the amount in the event of a breach. However, PUDA did not exercise that power and continued to retain the amount deposited by Verma.

The Authority observed that PUDA's conduct did not extinguish its obligation to deal with the money retained by it in accordance with law.

Neither Party Entitled to Equitable Relief

While considering the competing defaults, Punjab RERA relied on the established principle that a person seeking equitable relief must approach the forum with clean hands.

The Authority observed that while the allottee had defaulted in making payments, the developer had also failed to fulfil its obligations relating to timely handover. In such circumstances, neither party could ordinarily claim specific performance or forfeiture of earnest money.

The Authority therefore declined to grant Verma possession under Section 18 of the Real Estate (Regulation and Development) Act, 2016.

₹43.68 Lakh Payable to Allottee

Despite finding Verma in default of the payment schedule, Punjab RERA held that the circumstances justified a refund of the ₹21 lakh deposited by him, together with interest.

The complaint was accordingly partly allowed, with PUDA directed to pay:

• ₹21 lakh towards the principal amount;

• ₹22.68 lakh towards interest; and

• ₹43.68 lakh in total as on August 31, 2026.

PUDA was further directed to pay ₹18,900 per month from September 1, 2026, until the amount was actually paid.

The Authority also directed that the amount would be recoverable as land revenue and that a Debt Recovery Certificate would be issued in the event of non-compliance.

Ruling Highlights Importance of Mutual Compliance

The decision highlights that a party's own contractual default does not automatically entitle the opposite party to the relief of forfeiture or specific performance. Where defaults are attributable to both sides, the regulatory authority may examine the conduct of each party and mould the relief to ensure that neither side derives an unfair advantage from the other's breach.

Landowner Liable for Project Registration Despite Development Agreement: Rajasthan RERA

Case Title: Suo Motu v. K.D. Developers
Case No.: F.15 (326) RJ/RERA/C/2024 (RAJ-RERA-Suo Motu-2026-77)

The Rajasthan Real Estate Regulatory Authority (Rajasthan RERA) has held that a landowner cannot evade statutory obligations under the Real Estate (Regulation and Development) Act, 2016 (RERA Act) merely because a development agreement assigns construction and other development responsibilities to a developer.

In proceedings concerning the unregistered multi-storey residential project “99 Avenue” in Jaipur, the Authority imposed a penalty of ₹1 lakh each on Siddharth Landmark LLP, the developer, and Brajesh Saxena, one of the landowners, for contravention of the registration requirement under Section 3 of the RERA Act. The Authority further directed them to apply for registration of the project within 45 days.

Development Agreement Does Not Extinguish Landowner's Statutory Obligations

Chairperson Veenu Gupta observed:

“The contractual allocation of particular development responsibilities to the developer cannot, by itself, absolve the landowner from the statutory obligations arising under the Act in respect of the project.”

The project, situated at B-99-A, Surya Marg, Tilak Nagar, Jaipur, comprised 12 residential units. The proceedings arose from a complaint alleging that K.D. Developers was developing the project and had commenced bookings without obtaining the mandatory registration under the RERA Act. It was also alleged that requisite permissions from the Jaipur Development Authority and other competent authorities had not been obtained.

Rajasthan RERA issued a show-cause notice dated September 12, 2024, under Sections 3 and 59 of the Act concerning the failure to register the project. An interim direction under Section 36 was also issued restraining further booking, sale or purchase in relation to the project.

Pursuant to directions issued on March 12, 2025, a site inspection was conducted. The inspection report dated May 5, 2025 recorded the existence of a basement, ground floor and six additional floors. The project comprised 12 residential units spread over approximately 970 square metres. The structural framework had been completed, while interior and exterior works were still in progress.

Landowner's Defence Rejected

The inspection report recorded the involvement of Siddharth Landmark LLP and identified Brajesh Saxena as a landowner.

Saxena admitted that he had executed a Development Agreement dated February 8, 2023. However, he contended that his role was confined to that of a landowner and that he had not participated in the management, promotion, marketing or day-to-day affairs of the project.

The Authority rejected this defence.

The Development Agreement described Saxena as the First Party/Landowner and Siddharth Landmark LLP, through its partners Nischal Bhandari and Pradeep Moolrajani, as the Second Party/Developer. Although the agreement entrusted the developer with construction and the sale of the flats, it also provided for the constructed flats to be divided between the developer and the landowner.

Significantly, Saxena retained a 58.33% share in the flats to be constructed. On this basis, the Authority found that he continued to possess a substantive proprietary interest in the project.

The Authority held that the contractual arrangement between the parties could not override or dilute statutory obligations imposed by the RERA Act. The fact that construction, development and sale-related responsibilities had been assigned to the developer did not, by itself, absolve the landowner from compliance with the statutory registration requirement.

Violation Was Not a Mere Technical Lapse

Rajasthan RERA further held that the contravention could not be characterised as a “mere technical or inadvertent lapse”.

The project was actively under development and comprised 12 residential units, notwithstanding the statutory requirement that the project be registered before commencement of activities falling within Section 3 of the Act.

The Authority accordingly concluded that continued development of the project without registration constituted a “wilful contravention” of Section 3.

Proceedings Against Another Landowner Dropped

The Authority, however, distinguished the position of Kunal Daga, another person identified as a landowner.

Proceedings against Daga were dropped as the material on record did not establish his participation in the development arrangement, construction or sale of the project. The Authority held that his “mere identification as a landowner” was insufficient to impose liability in the absence of material demonstrating his participation in, or nexus with, the development.

Liability of Siddharth Landmark LLP

The order also noted that the proceedings were initially instituted against K.D. Developers. However, the subsequent site inspection report and the Development Agreement identified Siddharth Landmark LLP as the developer actually undertaking the development of the project.

Since no material was placed on record establishing any continuing role of K.D. Developers in the development or sale of the project, the Authority determined liability on the basis of the material subsequently brought on record.

Penalty and Direction for Registration

Rajasthan RERA ultimately held that Siddharth Landmark LLP, being the developer responsible for construction and development, and Brajesh Saxena, being the landowner having a substantive share in the constructed project, could not avoid the statutory requirement of registration under Section 3 of the RERA Act.

Accordingly, exercising its powers under Section 59, the Authority imposed a penalty of ₹1 lakh each upon Siddharth Landmark LLP and Brajesh Saxena.

They were further directed to apply for registration of the project “99 Avenue” within 45 days and comply with the requisite statutory formalities.

Key Takeaway

The order underscores that private contractual arrangements between a landowner and developer cannot, by themselves, determine or extinguish statutory liability under RERA. While the actual role and nexus of each party must be examined on the basis of the material on record, a landowner having a substantive proprietary or economic interest in a development project may remain subject to statutory obligations despite delegating construction, development and sale responsibilities to a developer.

Chattisgarh RERA Notification on Joint Venture Agreement between Land Owners and Developers

 Joint Venture Agreement between Land Owners and Developers

 Chattisgarh Real Estate Regulatory Authority (RERA) vide circular No./94 /RERA/2023/1956 dated 01/12/2023 directs following clauses to be mandatorily added in the joint venture agreement between the land owners and builders:

1. The land owners and the builders shall be jointly & severally liable to fulfill all obligations under RERA;
2. The Agreement to Sale with the allottee should be signed by both.

Housing Finance Company (Reserve Bank) Directions, 2021 issued by the RBI on 17.02.2021

Housing Finance Company (Reserve Bank) Directions, 2021 issued by the RBI on 17.02.2021

88. Disbursement of housing loan to individuals linked to the stages of construction

88.1 Disbursal of housing loans sanctioned to individuals shall be strictly linked to the stages of construction of the housing projects/ houses and upfront disbursal shall not be made in case of incomplete/ under-construction/ green field housing project/ houses.

88.2 HFCs while introducing any kind of product shall take into account the customer suitability and appropriateness issues and also ensure that the borrowers/customers are made fully aware of the risk and liabilities under such products.

88.3 In cases of projects sponsored by Government/ Statutory Authorities, HFCs may disburse the loans as per the payment stages prescribed by such authorities, even where payments sought from house buyers are not linked to the stages of construction, provided such authorities have no past history of non-completion of projects.

88.4 HFCs shall desist from offering loan products involving servicing of the loan dues by builders/ developers etc. on behalf of the borrowers.

88.5 HFCs shall have in place a well-defined mechanism for effective monitoring of the progress of construction of housing projects and obtaining consent of the borrower(s) prior to release of payments to the builder/developer.