Developer challenges RERA penalty, Tribunal asks it to pay double

In January, TNRERA had issued an order against Casagrand Builder Private Limited to pay Rs 10 lakh penalty for not mentioning the RERA registration number in an advertisement that it issued on upcoming projects at Sholinganallur, Manapakkam, Mogappair, ECR, Medavakkam, Thalambur-OMR and other locations. The advertisement was issued in November 2020. Following this, the authority issued a show-cause notice, for which the promoter issued a reply stating that the RERA registration numbers could not be mentioned due to space constraints. The authority refused to accept the reply and imposed a penalty of Rs 10 lakh. 

The promoter then approached the tribunal with an appeal against the order. However, hearing the appeal, Justice B Rajendran, who chaired the tribunal, pointed out that Section 3 of the RERA Act starts with ‘no promoter shall advertise without registration’. 

It also noted that Section 61 of the Act empowered the regulatory authority to impose a penalty, which may extend up to five per cent of the estimated cost of the project. But the authority only imposed a penalty of Rs 10 lakh. 

“The appeal is dismissed and the order of the regulatory authority is modified by imposing a further penalty of Rs 10 lakh under Section 61 of RERA Act, in addition to the penalty imposed by the regulatory authority,” the order said. 

The promoter should pay Rs 20 lakh, after deducting the already deposited amount, before the authority within a month from the date of receipt of the order.