4.3 Penalties, Misrepresentation & License Revocation
Key Takeaways
Section 62 provides INR 10,000 for each day of a Section 9 or 10 default, cumulatively up to 5% of the cost of the relevant plot, apartment or building whose sale or purchase was facilitated, as determined by the Authority.
Section 65 covers an agent’s failure to comply with Authority orders or directions: a penalty for each default day, cumulatively up to 5% of the applicable estimated property cost; it does not state the Section 62 fixed daily amount.
Section 66 covers agent non-compliance with Appellate Tribunal orders: imprisonment up to one year, or a fine for each default day cumulatively up to 10% of the applicable estimated property cost, or both.
Section 9(7) and Rule 15 require an opportunity of being heard before registration revocation or suspension; a revoked agent cannot apply afresh for six months.
Section 44 normally allows 60 days from receipt of the order copy to appeal, with late admission for sufficient cause. Section 43(5)’s statutory pre-deposit condition specifically addresses a promoter appellant.
4.3 Penalties, Misrepresentation & License Revocation
1. Match the Person, Default and Statutory Provision
RERA has distinct consequences for an agent’s original duty breach, failure to comply with an Authority order, and failure to comply with an Appellate Tribunal order. Do not apply the promoter’s project-cost rules or the allottee’s rules merely because the percentage looks similar.
Section 62: Failure to Comply with Sections 9 or 10
For a covered Section 9 or 10 default, an agent is liable to INR 10,000 for each day during which the default continues, cumulatively up to 5% of the cost of the plot, apartment or building whose sale or purchase was facilitated, as determined by the Authority. Section 62 uses cost; unlike Sections 65 and 66, it does not insert “estimated” before that base.
First establish the applicable duty. Section 10(a) concerns promoter-sold projects or parts in a planning area; read it with Section 3’s registration requirement and exemptions. An agent’s involvement does not remove a lawful project exemption. False representations and withholding entitled booking information engage the relevant duties in Section 10(c) and (d), rather than an invented automatic penalty for every disagreement.
The daily amount and cumulative ceiling operate together. The cap is not 5% of the agent’s commission, token advance, all project receipts or buyer’s budget. Identify the actual relevant property and the Authority-determined cost base.
Section 65: Disobeying Authority Orders
For an agent’s failure to comply with an Authority order or direction, Section 65 provides a penalty for every default day, cumulatively up to 5% of the estimated cost of the applicable plot, apartment or building whose sale or purchase was facilitated, as determined by the Authority. It does not prescribe Section 62’s fixed INR 10,000 daily amount. Do not calculate that amount under Section 65 without a separate applicable basis.
Section 66: Disobeying Appellate Tribunal Orders
Section 66 permits imprisonment up to one year, or a fine for every default day cumulatively up to 10% of the estimated cost of the applicable facilitated property, or both. This is a criminal consequence, rather than a compensation order automatically imposed by an adjudicating officer.
Under Section 80, a court takes cognizance only on the specified complaint by the Authority or an authorized officer; no court inferior to a Metropolitan Magistrate or Judicial Magistrate First Class tries a punishable offence under the Act. Distinguish the Tribunal’s underlying order from prosecution and sentencing for non-compliance. Section 71’s compensation jurisdiction does not make an adjudicating officer a criminal sentencing court.
2. Registration Revocation and Suspension Are a Separate Process
Rule 15, read with Section 9(7), permits the Authority to revoke or suspend registration for a breach of applicable terms or conditions, or where registration was obtained through misrepresentation or fraud. The Authority may act on its own initiative or on a promoter/allottee application or complaint and informs promoters as the rule provides.
- Give the agent an opportunity of being heard before revocation or suspension. Neither this provision nor Rule 15 supplies a universal 15-day or 30-day notice period.
- Communicate revocation in Form I under Rule 15(2).
- After revocation, a fresh registration application cannot be made for six months. Do not automatically apply that revocation-specific bar to every suspension.
A failure to file required reports or comply with certification conditions must be assessed under the actual applicable condition, order and procedure. Rule 15 does not itself create a standalone bankruptcy or criminal-conviction-over-six-months checklist. Nor does an accusation automatically establish fraud or require cancellation. Consider the evidence and the agent’s response before deciding whether the statutory grounds are made out.
3. Complaints, Compensation and Other Liability
Section 31 allows an aggrieved person to complain to the Authority or adjudicating officer, as appropriate, against a promoter, allottee or agent for violations of the Act, Rules or Regulations. Identify the alleged violation, evidence, relief and forum. Filing a complaint does not itself prove entitlement to a particular compensation amount.
Do not infer that every agent is jointly liable for every developer delay or owes an automatic refund of all commissions. The legal basis, actual conduct and competent forum matter. For general agency misconduct, the Indian Contract Act contains separate rules: Section 216 addresses benefits from undisclosed own-account dealings, and Section 220 denies remuneration for the part of the agency business misconducted. These are scoped rules, not a universal refund formula for every RERA complaint.
4. Appeals and Their Exact Boundaries
An aggrieved agent can appeal the relevant Authority or adjudicating-officer order to the Appellate Tribunal under Sections 43 and 44. The normal filing period is 60 days from receipt of a copy of the direction, decision or order. The Tribunal may admit an appeal later if satisfied that sufficient cause prevented timely filing; do not count only from the date printed on an order that had not yet been received.
Section 43(5) expressly states a pre-deposit condition where a promoter files an appeal: at least 30% of the penalty, or a higher percentage determined by the Tribunal, or the specified total amount payable to the allottee, or both, as applicable. Do not convert this into a blanket statutory pre-deposit requirement for every agent appellant. Identify the appellant’s actual capacity and any other applicable order or procedural requirement.
The appeal-disposal provision directs expeditious handling and an endeavour to dispose within 60 days from receipt of the appeal, with reasons recorded if that cannot occur. It is not a guaranteed decision date for the appellant.
Primary sources: Current RERA Act, Sections 3, 9, 10, 31, 43, 44, 62, 65, 66, 71 and 80; Maharashtra registration Rules 14 and 15; Indian Contract Act, Sections 216 and 220.
RERA Agent Penalty and Process Matrix
| Provision | Trigger | Daily rule and cumulative ceiling | Process boundary |
|---|---|---|---|
| Section 62 | Covered Section 9 or 10 default | INR 10,000 per default day; up to 5% of the applicable property cost | Authority determines the statutory cost base |
| Section 65 | Agent disobeys an Authority order/direction | Penalty for each default day; up to 5% of applicable estimated cost | No fixed INR 10,000 daily amount stated here |
| Section 66 | Agent disobeys an Appellate Tribunal order/decision/direction | Imprisonment up to one year, or daily fine cumulatively up to 10% of applicable estimated cost, or both | Criminal cognizance and trial follow Section 80 |
| Section 9(7), Rule 15 | Applicable condition breach or fraud/misrepresentation securing registration | Revocation or suspension after hearing opportunity | Form I for revocation; fresh application barred six months after revocation |
| Section 44 | Appeal by an aggrieved person | Normally 60 days from receipt of order copy | Late admission for sufficient cause; promoter-specific Section 43(5) deposit rule |
Penalty Calculations with Stated Cost Bases
For Section 62, use the property cost determined by the Authority. For Section 66, the statutory cumulative fine ceiling uses the applicable estimated cost. Keep these bases distinct.
Illustration: Assume a covered Section 9 default continues for 30 complete days and the relevant property cost determined by the Authority is INR 2,00,00,000. There are no disputed dates in this example.
The daily calculation is below the ceiling. If the same default continued for 120 complete days, the daily calculation would be INR 12,00,000, exceeding the INR 10,00,000 cumulative ceiling. These are statutory-bound arithmetic examples; they do not predict an automatic payable order without establishing the duty, default days and Authority-determined cost.
For a separate Section 66 example, assume the applicable estimated property cost is INR 2,00,00,000: the cumulative fine ceiling is INR 20,00,000. Section 66 does not prescribe Section 62’s INR 10,000 daily rate, so an exact daily fine cannot be calculated from the cost alone. The imprisonment alternative and criminal process remain separate from this percentage calculation.
For a covered Section 9 or 10 agent default, which is the Section 62 cumulative penalty ceiling?
5% of the agent’s annual commission income
5% of the relevant facilitated property cost, as determined by the Authority
5% of all receipts in the project’s separate account
5% of the buyer’s stated maximum purchase budget
Under Rule 15 of the Maharashtra RERA Rules 2017, what must MahaRERA do before revoking or suspending a real estate agent's registration, and what restriction follows revocation?
Issue a 15-day written show-cause notice; the agent may re-apply immediately
Give the agent an opportunity of being heard; the agent cannot re-apply for six months
Obtain prior sanction of the Appellate Tribunal; the agent cannot re-apply for two years
Publish a newspaper notice for 30 days; the agent may re-apply after paying a penalty
What maximum term of imprisonment is prescribed under Section 66 of the RERA Act 2016 for an agent who fails to comply with orders of the Appellate Tribunal (MREAT)?
30 days
90 days
6 months
Up to 1 year
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