Recalibrating Enforcement Under Rera: The Shift From Criminal Sanctions To Monetary Penalties

Associate – Vartika Srivastava

Introduction

The Real Estate (Regulation and Development) Act, 2016 (“RERA”) was enacted to address persistent concerns relating to project delays, regulatory opacity and enforcement inefficiencies within India’s real estate sector. In furtherance of its consumer protection framework, the statute adopted a stringent enforcement mechanism, including criminal consequences for non-compliance with orders passed by the Real Estate Appellate Tribunal (“REAT”).

The Jan Vishwas (Amendment of Provisions) Act, 2026 has now introduced a significant modification to this framework through the amendment to Section 68 of RERA. The amendment removes imprisonment as a consequence for non-compliance with REAT orders and substitutes the same with monetary penalty framework extendable up to 10% of the cost of the property.

Recalibrating the enforcement framework

Prior to this legislative change, Section 68 contemplated imprisonment of up to one year for failure to comply with appellate directions issued by the REAT. The amendment marks a clear shift away from custodial enforcement towards a penalty-driven compliance model.

Importantly, the amendment does not dilute the regulatory architecture under RERA. Instead, it reflects a broader legislative movement towards decriminalisation of commercial and regulatory statutes, particularly in cases involving procedural or compliance-related defaults. The amendment appears intended to align enforcement outcomes more closely with principles of commercial proportionality while continuing to preserve regulatory discipline through substantial financial consequences.

This distinction assumes significance in the context of the real estate sector, where enforcement proceedings frequently arise out of execution disputes, delayed compliance and regulatory defaults rather than inherently criminal conduct. The continued availability of significant monetary penalties nevertheless ensures that non-compliance remains commercially consequential for stakeholders operating within the sector.

Practical implications for stakeholders

The amendment is likely to influence enforcement strategy and dispute resolution dynamics before RERA authorities and appellate tribunals. The removal of criminal exposure may reduce the coercive element historically associated with appellate enforcement proceedings, particularly in high-value disputes involving developers and allottees.

At the same time, financial exposure extending up to 10% of the property cost may materially impact settlement strategy, enforcement risk assessment and overall dispute management considerations. Parties may increasingly evaluate compliance obligations through a commercially driven lens, with greater emphasis on financial liability and regulatory cost exposure.

For instance, developers facing delayed execution of refund or possession orders may now assess appellate non-compliance primarily through potential financial exposure rather than custodial risk. Industry discussions following the amendment have similarly focused on the practical shift in negotiation dynamics arising from the removal of imprisonment-based consequences in ongoing enforcement and settlement proceedings.

Conclusion

The 2026 amendment to Section 68 of RERA reflects a broader evolution in India’s regulatory philosophy towards replacing criminal sanctions in commercial legislation with proportionate monetary deterrence mechanisms. While the amendment structurally softens the penal consequences associated with non-compliance, it does not diminish the underlying objective of regulatory accountability under RERA.

As enforcement trends continue to evolve, the amendment may ultimately test whether financial deterrence alone can sustain compliance discipline within India’s increasingly regulation-driven real estate sector.

Last Updated on 12 June, 2026