RERA Impact: Arrest warrant issued against builder who failed to pay compensation to property buyer for 14 year delay in possession

Even when Haryana RERA issued an order in 2022 telling a builder to give Rs 8.6 lakh compensation to a property buyer for 14 year delay in giving possession, the builder did not follow. Haryana RERA seeing this gross disrespect for an order passed by RERA authority, ordered the arrest of this builder.

To give you a brief background of this case, it is the case of the property buyer that even after paying more than 25% of the total cost in FY 2007-08, the builder never signed the agreement to sell and gave possession of the property.

When the Haryana RERA Authority questioned the builder back in 2019 about the reason for this delay, the builder said that the site plan needed revisions and that the revised plan is awaiting approval from the local government authority. However, it was proved that even after receiving approval for the revised site plan in 2017 itself, the builder still failed to execute a sale agreement, forcing the property buyer again to return to court.

In the end, the property buyer filed five court cases and waited 14 years without receiving possession of the property. The property buyer argued that he had paid 25% of the money which the builder had been using for over a decade. Seeing this gross negligence, Haryana RERA in 2022, ordered the builder to provide compensation of Rs 8.6 lakh due to the extensive delay, emphasizing the protection of real estate property buyers’ legal rights.

It has been three years since the compensation order was passed, but the builder still has not paid anything for the 14-year delay in possession. So, on August 9, 2025, Haryana RERA issued a request for an arrest warrant for the builders’ directors for such a gross disrespect of the RERA order. One of the builder’s directors is currently outside India, and the police will serve this arrest warrant when this director returns.

The arrest warrant requests for the other directors of this builder have been sent to City Metropolitan Magistrate, Karkardooma Court Complex, Patiala House Court Complex, New Delhi District and Chief Judicial Magistrate, Gurugram.

Advocate Shubhnit Hans who represented the home buyer in this case said to ET Wealth Online: "We welcome this order as it reinforces faith in the regulatory framework. This order is a strong reminder that homebuyers’ rights cannot be compromised. RERA’s enforcement of law and its orders passed thereof shows that delays and non-compliance by the builders will no longer be tolerated. It sends a clear message to builders that accountability to homebuyers is non-negotiable."

Check out how the Haryana RERA Panchkula bench brought justice to this property buyer.

How did this case start?

According to the Haryana RERA order dated August 9, 2025, along with its order dated March 30, 2022, this is the timeline of events:

• 2007-08: The buyer booked a property unit in a project of the builder by paying Rs 10.25 lakh (10,25,500). The total cost of this unit was Rs 41 lakh (41,02,500).
• 2008-2019: Builder buyer agreement was to be executed within 30 days of the booking but it has not been executed till date. The possession of the unit also has not been offered till date.
• December 17, 2019: Haryana RERA Authority had allowed the complaint directing the builder to execute builder- buyer agreement within a week. The builder’s lawyers gave a statement to RERA Authority that they are ready to sign the agreement.
• 2020: The builder failed to comply with the 2019 order of signing the agreement. Thus the property buyer filed another complaint against the builder for execution of the 2019 order.
• December 3, 2020: The builder said he will not be able to sign a builder- buyer agreement as the building plans of the project have to be revised and the new plan is not yet approved by the government. Haryana RERA observed that the builder had deliberately failed to discharge the responsibility with a motive of bad business practice and has been utilising the amount paid by the buyer for the last 14 years.
• 2020: Unfortunately, respondent company (builder) had neither paid the interest @ 9% per annum on the amount deposited by the buyer nor had executed builder buyer agreement despite committing the same and giving statement in the Court.
• 2021: The property buyer filed another execution petition to make the builder comply with the 2019 order.
• March 30, 2022: The Haryana RERA Authority directed the builder (M/s Parsvnath Developers Ltd.) to pay Rs 8.6 lakh (8,63,914) within 45 days.
• August 8, 2025: The builder failed to comply with any order and thus the Haryana RERA authority issued the arrest warrant against the builder.

Also read: Bengaluru homebuyer to get Rs 70 lakh from builder due to three year delay in possession; Know how RERA law helped him win the case

The builder despite receiving the notice from Haryana RERA about arrest did not send anybody to defend their case in person

An extract of Haryana RERA order dated August 8, 2025 said:

• “…It means, three out of four working Directors, despite having received the show-cause notices and also despite having opportunity given, did not elect to present their defence in person against expected order of sending them to civil imprisonment up to three months as is mandate of Order XXI Rule 41(3) CPC, which is clear cut defiance on their part of the orders of this executing Forum (RERA Authority).
• “Not only this, they have not appeared despite directions to appear in person warranting separate penal action against them under Section 63 of the RA(RD) Act, 2016.”
• “Hence, in the given circumstances, clear cut intentional violations of directions so passed, these violators are bound to face adverse consequences of provisions of Order XXI Rule 41(3) CPC and section 63 of the RERA Act, 2016. However, action against Ms. Gupta, remains pending till a report from abroad on her notice is received back served or unserved.”

Haryana RERA says builder’s directors intentionally avoided its order

According to the Haryana RERA order dated August 8, 2025, here’s what the justice said:

• Having the above rival contentions in mind and the facts on record, at the outset, it is pertinent to mention here that a person who is not approaching the court with clean hands, does not deserve any relief and this forum (RERA) is not in agreement to grant adjournment particularly having in mind the previous conduct of the judgment debtor in many of the unsatisfied executions for years together due to non-payment of the amounts due.
• In the instant case, four legal grounds are there on record to order against the Directors of the judgement debtor company, to face civil imprisonment for three months for intentional violation of this Forum’s order dated 03.03.2025 passed while exercising powers as that of a civil court, provided under Section 40 of the RERA Act, 2016, read with Rule 27 of HRERA Rules, 2017.

Here’s an extract of the four legal reasons for arrest as given by Haryana RERA:

• 1st reason: “The first reason is that despite having been given the opportunity to comply with directions passed under Order XXI Rule 41(2) CPC, they did not elect to submit affidavit(s)....”
• 2nd reason: “In addition to above, the second ground is that the judgement debtor company and its directors are not paying the amount of compensation granted to decree holder vide order dated 30.03.2022 under execution, despite having resources…..”
• 3rd reason: “In addition to above, the third reason is the tendency of the Judgment debtor company and its directors to adopt an approach of falsehood, to harass the decree holder, just to get postponement of anticipated adverse action initiated by this Forum in accordance with law. These directors not only avoided the show cause notices sent through post but also have tried to buy time to delay the execution through a statement of representative before this Forum instead of appearing themselves ....”
• 4th reason: Fourthly, learned counsel for the judgment debtor herself and through representative of judgment debtor, have sought adjournment on the plea that judgment debtor company will make the payment of decretal amount within one month to the decree holder, thus satisfy the order under execution warranting no punitive action against the Directors of judgment debtor company or corporate debtor summoned to file their individual replies for violation of provisions of Order XXI Rule 41(2) CPC.

Extract of the judgement: “In view of the foregoing discussion, it is concluded that Directors of the judgement debtor company, having no defense to make to the show cause notice given before passing an order to send them behind bars for disobedience of Forum’s order and have not paid the amount despite having resources, are held guilty for violation of this Forum’s order dated 03.03.2025, consequently, are awarded three months civil imprisonment, on deposit of subsistence allowance by the decree holder on or before 09.09.2025.”

Established case law cited: “M. Ramalingam Vs. P. Krishnaveni (2013) 10 SCC 673. Rajesh Kumar Aggarwal Vs. Kamal Aggarwal ( 2018) 14 SCC 625. S. Sivasubramanivan Vs. S. Sivakumar (2020) SCC Online Mad _ 3305, K. Bhaskaran Vs. MS. Narayanan (2004) 8 SCC 31. PSS. Somasundaram Vs. S. Rajalakshmi (2013) ILW 744.”

Avikshit Moral, Partner, S&R Associates said to ET Wealth Online: This judgement places strong emphasis on compliance of its orders, particularly in light of public policy which mandates that sanctions issued by the tribunal be rigorously upheld. The Real Estate (Regulation and Development) Act, 2016 does provide for imprisonment under section 59 and 64 of the Act. In fact, the Calcutta High Court in one of its orders held that RERA authority is vested with the power to ensure the compliance not only of the Act, rules or the regulation, but also the obligations contained therein and also to have such orders or direction to be executed so as to bring quietus to the lis. It further clarified that the RERA authority can execute a decree under Rule XXI."

RERA tribunal can legally issue arrest warrants against a builder for non-compliance of the tribunal's orders?

Niraj Kumar, Partner, DSK Legal explains:

• “Yes, the Real Estate Regulatory Authority (RERA Authority), when acting as an adjudicating officer, has strong statutory backing to enforce its orders. In terms of the legislative mandate as enshrined under the Real Estate (Regulation and Development) Act, 2016 (RERA), any penalty, interest, or compensation can be recovered in the same manner as arrears of land revenue.”
• “Further, the Haryana Real Estate (Regulation and Development) Rules, 2017 provides that every order of the Authority or adjudicating officer shall be executable as if it were a decree of a civil court.”
• “When these provisions are read together with the execution framework under the Code of Civil Procedure, 1908 (Order XXI, Rule 41(3)), it becomes clear that authorities are empowered not only to recover dues but also to use coercive measures, including arrest warrants, to secure compliance with their orders.”

Sana Khan, Associate Partner, SNG & Partners, Advocates & Solicitors, says:

1. As per section 63 of the Real Estate (Regulation and Development) Act, 2016; any Promoter who fails to oblige with the order of the Real Estate Regulatory Authority (RERA) is liable to a penalty for every day during which such default continues, which may cumulatively extend up to 5% of the estimated cost of the real estate project as determined by the Authority.
2. Further, as per section 64, it is stipulated that failure to comply with orders of Appellate Tribunal by the Promoter can result in imprisonment for a term which may extend up to three years or with fine which may extend up to a further 10% of the estimated cost of the real estate project or with both.
3. The execution mechanism is set out under Rule 27(1) of the Haryana Real Estate (Regulation and Development) Rules, 2017 wherein power to execute the orders passed by the Authority, the Adjudicating Officer and the Appellate Tribunal are enforceable as if they were decrees of a Civil Court. The Adjudicating Officer derives its jurisdiction under section 71 of the Act and has the authority to adjudicate compensation claims and enforce orders by delegated powers.

Khan explains:

• The Government of Haryana had, by a Notification dated 11th May 2024 bearing reference no. 50/15/2024-5S(1) had conferred the powers of Collector under the Haryana Land Revenue Act, 1887 upon the Adjudicating Officer for the purpose of execution of RERA orders.
• It is noteworthy that by an Order dated 24th April 2025, the Hon’ble High Court of Punjab & Haryana (At Chandigarh) in Vatika Limited vs. Union of India & Ors. (CWP-14937-2024) has quashed and set aside the Notification dated 11th May 2024.
• This Order has not been reversed or modified by the Hon’ble Apex Court till date. Thus, it is questionable as to under which provision or authority; the Adjudicating Officer has issued arrest warrant vide its order dated 7th August 2025 in V.P. Batra vs. Parsvanath Developers Ltd.

What is the significance of this order?

ET Wealth Online reached out to various experts about the significance of this judgement for home buyers;, here’s what they said:

Vikram Sobti, Partner and Head of Real Estate Practice, Chandhiok & Mahajan, says: “In this case, the Authority had repeatedly summoned the directors of Parsvnath Developers to appear and explain why they had not paid. They chose not to appear, did not share details of assets, and continued to delay payment. Seeing this as deliberate defiance, HARERA (Haryana RERA) ordered that three of the directors be arrested and sent to jail for three months, unless the order is fully complied with.”

“This order is important because it sends a strong message. The RERA Authority made it clear that while payment is one issue, disobeying its directions is another. The jail order was therefore not just about money but about punishing contemptuous behaviour and reaffirming that disobedience of the regulator will not be tolerated. By taking this step, HARERA has strengthened confidence in its role as a serious enforcement body.”

“For home buyers, the decision is reassuring proof that RERA is not just a complaint forum but a regulator capable of ensuring compliance. For developers, it is a reminder that compliance is not optional — ignoring RERA’s orders can carry very real consequences, including personal accountability and even loss of liberty.”

Chirag Gupta, Associate Partner, Alpha Partners, says: “A Real Estate Regulatory Authority (RERA) tribunal possesses the legal authority to issue arrest warrants against a builder for non-compliance of its orders. This power is not explicitly granted under the RERA Act but is instead derived from the Code of Civil Procedure, 1908, which the RERA tribunals may utilise to execute their orders as if they were decrees passed by civil courts.”

“This power has been exercised by several RERA tribunals, particularly in Haryana. A landmark precedent was established in M/s International Land Developers Private Limited vs. Aditi Chauhan, where the Punjab and Haryana High Court upheld the Haryana RERA’s authority to issue arrest warrants against the builder’s directors.”

“More recent instances include the Haryana RERA ordering a director of Ninaniya Estates Limited to be sent to civil prison for one month for non-compliance with a refund order, and the judgment in Saranga Anilkumar Aggarwal vs Bhavesh Dhirajlal Sheth, which resulted in three directors being sentenced to three months of civil imprisonment. These cases demonstrate the growing resolve of RERA tribunals to enforce their adjudications and protect the interests of homebuyers.”

“The judgment establishes a strong precedent for other RERA tribunals in India. It underscores that non-compliance with a regulatory order is a distinct offense from the financial debt itself, and therefore, punitive action will not be halted by promises of future payment. This resolve, based on powers derived from the Code of Civil Procedure, 1908, and the RERA Act, is crucial for strengthening homebuyers' position and ensuring that builders face tangible consequences for their intentional non-compliance with the law.”

Alay Razvi, Managing Partner, Accord Juris, says: “This judgement marks a strong regulatory stance, demonstrating RERA’s ability to enforce accountability among developers through civil imprisonment, not just monetary penalties. It sends a deterrent message to errant builders and reassures homebuyers of effective legal remedies beyond prolonged litigation.”

Niraj Kumar, Partner, DSK Legal, says: “The order holds considerable significance in the context of enforcement under the Act. It reaffirms that the Authority, while exercising its powers through the adjudicating officer, is not limited to issuing directions but is vested with effective mechanisms to ensure compliance. The present order demonstrates the Authority’s power to employ coercive measures within the framework of Act, read with the Code of Civil Procedure, 1908.”

“The broader implications of the said order are wide ranging. For homebuyers, it strengthens their confidence in the statutory redressal mechanism by ensuring that relief granted by the Authority is not illusory but is backed by enforceable coercive measures.”

“For builders and developers, this decision underscores that non-compliance with the orders of the Authority or the adjudicating officer shall not be treated as a mere procedural lapse but may entail serious consequences including personal liability of directors, attachment and sale of assets, and even deprivation of personal liberty by way of civil imprisonment.”

“The order therefore compels builders to adopt greater financial discipline, adhere strictly to statutory timelines, and prioritize compliance with regulatory and judicial directions. It further operates as a cautionary precedent that continued or deliberate non-compliance with the orders of the Authority or the adjudicating officer may subject promoters and their management to coercive financial recovery proceedings as well as penal consequences envisaged under the Act.”

Sana Khan, Associate Partner, SNG & Partners, Advocates & Solicitors, says: "While the Haryana RERA has passed numerous orders with arrest warrants against the promoters; RERA in other states have not followed such practice. In Maharashtra, the Adjudicating Officer issues recovery warrant for non-compliance which is communicated to the Collector’s office for recovery of dues."