In a strict enforcement action under real estate law, the Himachal Pradesh Real Estate Regulatory Authority (RERA) has imposed a penalty of ₹51 lakh on Gee City Builders Pvt Ltd, Baddi, for issuing 51 pre-registration allotments before registering its housing project with the authority.
The order was passed by RERA Chairperson R D Dhiman and Member Vidur Mehta in a 2019 suo motu petition concerning the project “GEE CITY BADDI”. The promoter has been directed to deposit the penalty within 15 days of receiving the order, failing which proceedings under Section 63 of the Real Estate (Regulation and Development) Act, 2016 will be initiated.
Background of the Project
The housing project is located at Mohal Judi Khurd and Suraj Majra Labana in Tehsil Nalagarh, District Solan, Himachal Pradesh. The promoter applied for registration on May 13, 2024, declaring the project as an ongoing development.
As per the submission, the project comprises:
602 dwelling units across eight residential blocks
Commercial components including shops
However, during scrutiny of project documents and statutory declarations, the authority discovered substantial pre-registration sales activity.
Violations Identified by RERA
The authority found that:
227 residential flats and four commercial shops had already been sold or allotted prior to registration
Out of these, 51 allotment letters were issued between May 1, 2017 and May 30, 2017
Significantly, May 1, 2017 marks the date on which the RERA Act came into effect. Issuing allotment letters after this date without obtaining mandatory registration constitutes a clear violation of the Act.
The regulator viewed this as a direct breach of statutory requirements that prohibit marketing, booking, or selling units without prior registration.
Penalty Imposed: ₹1 Lakh Per Unit
Taking a strict view of the violation, the authority imposed a penalty of ₹1 lakh per unit for the 51 illegal allotments, resulting in a total penalty of ₹51 lakh.
The order mandates payment within 15 days, failing which coercive proceedings under Section 63 of the Act may follow. Section 63 empowers the authority to impose additional penalties for non-compliance with its directions.
Legal Significance of the Order
Under the RERA framework, every real estate project exceeding the prescribed threshold must be registered before:
Advertising or marketing
Inviting bookings
Issuing allotment letters
Executing sale agreements
The objective is to ensure transparency, protect homebuyers, and prevent premature sales without regulatory scrutiny.
By penalizing pre-registration allotments, HP RERA has reinforced that promoters cannot bypass statutory safeguards even in ongoing projects.
Implications for Developers and Homebuyers
This decision sends a clear message to developers that compliance with registration requirements is mandatory and non-negotiable. Even if a project is later declared as ongoing and registered, earlier violations remain actionable.
For homebuyers, the order strengthens confidence in the regulatory mechanism by ensuring that:
Projects undergo proper scrutiny before sales
Promoters are held accountable for statutory breaches
Consumer interests are safeguarded through financial penalties
Strengthening RERA Enforcement in Himachal Pradesh
The ruling highlights the proactive role of HP RERA in monitoring compliance and taking suo motu cognizance of violations. It underscores the importance of timely project registration and adherence to statutory timelines under the RERA regime.
As enforcement actions increase across states, promoters must ensure strict regulatory compliance to avoid financial penalties and reputational damage.
