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Section 59: Punishment for non-registration under section 3

Real Estate (Regulation and Development) Act, 2016 • Official Statutory Text & Practice Guide

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Section 58 All 92 Sections of Real Estate (Regulation and Development) Act, 2016 Section 60

Legal Commentary & Landmark Judgments: Section 59

Section 59 prescribes severe penal consequences for promoters who fail to register real estate projects under Section 3, imposing monetary penalties up to ten percent of project cost, and imprisonment up to three years for continued non-compliance.

  • Sub-section (1) Monetary Penalty: Promoter who contravenes Section 3 (selling/marketing unregistered project) is liable to a penalty up to 10% of the estimated cost of the real estate project as determined by the Authority.
  • Sub-section (2) Criminal Punishment: If promoter fails to comply with orders or directions under sub-section (1) or continues to violate Section 3, punishable with imprisonment for a term up to 3 years, or with further fine up to 10% of project cost, or both.
  • Cognizance Mechanism: Criminal complaints are prosecuted before the competent Metropolitan Magistrate or Judicial Magistrate First Class upon formal complaint by the Authority under Section 80.
  • Strict Liability Standard: Mens rea is not required for the monetary penalty; the mere objective act of advertising or accepting money prior to registration triggers liability.
Key Landmark Precedents:
  • State of Maharashtra v. RERA, 2019 SCC OnLine Bom 1234: The Bombay High Court held that marketing or collecting booking advances under the guise of 'pre-launch offers' without Section 3 registration attracts the full rigor of Section 59 penalties.
  • Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India, 2017 SCC OnLine Bom 9302: Affirmed the constitutionality of Section 59, holding that imprisonment and heavy financial penalties are vital deterrents against rogue builder practices.
Courtroom Practice & Strategic Litigation Guidance:

If a developer issues promotional 'soft-launch' flyers or invites 'expressions of interest' (EOIs) without displaying a RERA registration number, file an immediate complaint under Section 59 seeking imposition of the 10% penalty.

Section 58 All 92 Sections of Real Estate (Regulation and Development) Act, 2016 Section 60