HP RERA: Promoter Liability Continues After Possession; Gupta Property Developers Held Liable for Deficiencies in New Town Baddi

March 31, 2026 : The Himachal Pradesh Real Estate Regulatory Authority (HP RERA) has ruled that a promoter’s statutory obligations do not end with handing over possession and cannot be shifted onto residents. In a detailed order dated March 31, 2026, the Authority held Gupta Property Developers Pvt. Ltd. guilty of deficiency in service and multiple violations of the Real Estate (Regulation and Development) Act, 2016 in relation to its “New Town Baddi” project.

The complaint was filed by allottee Romit Barnyal, who alleged that despite being given possession, essential infrastructure and services were either incomplete or non-functional. The Authority, after examining records and inspection reports, found that the project lacked basic facilities including proper electricity connections, sewerage systems, lifts, fire safety mechanisms, street lighting, and maintenance services.

A key issue highlighted in the order was the inadequate electricity infrastructure. As noted in the record (pages 10–11), the project was operating on a sanctioned load of around 200 KW against the required 400 KW, forcing residents to bear additional financial burdens, including deposits of approximately ₹16 lakh towards load enhancement and arrears that were originally the promoter’s liability.

The Authority also recorded that sewerage infrastructure was either non-operational or grossly insufficient, with reliance on external treatment systems leading to recurring costs for residents. Inspection reports (pages 11 and 16) further confirmed that the housing colony was in a deteriorated condition due to lack of maintenance and absence of any responsible entity managing common facilities.

On the legal position, HP RERA made it clear that under Sections 11 and 14 of the Act, the promoter is obligated to complete the project in all respects and ensure operational essential services before transferring responsibilities to an association of allottees. It emphasized that these obligations are continuous and non-delegable. The Authority also relied on judicial precedents to reiterate that failure to obtain a completion certificate and provide promised amenities constitutes a clear deficiency in service.

The Authority found several statutory violations. It noted that the promoter failed to obtain a completion certificate, did not execute registered conveyance deeds for many allottees, and did not facilitate the formation of a Residents’ Welfare Association (RWA). Despite substantial occupation in the project, a large number of sale deeds remained unexecuted, leaving buyers without clear legal title (pages 15–16).

Further, the Authority held that the promoter continued to deal with the project even after expiry of its RERA registration on November 3, 2022. Such continuation of sales and project-related activities post-expiry was found to be in direct violation of statutory provisions (pages 13–14).

The proceedings were conducted ex parte after the promoter failed to appear despite multiple opportunities. The Authority relied on documentary evidence, inspection reports, and submissions of the complainant to conclude that the promoter had failed to discharge its obligations, thereby infringing the rights of allottees.

In its final directions (pages 25–27), HP RERA ordered the promoter to complete all pending works, restore essential services, and obtain the completion certificate within a stipulated timeframe. It also directed execution of conveyance deeds and facilitation of RWA formation. In case of continued non-compliance, authorities have been empowered to convene a General House Meeting of allottees to ensure formation of an association and protection of their interests.

The Authority also imposed a penalty of ₹1.5 lakh under Section 61 of the Act for continued violations and noted that compliance will be monitored through ongoing proceedings.

The ruling reinforces a clear principle under RERA: handing over possession does not absolve a promoter of its legal duties. Until completion certification, proper conveyance, and functional infrastructure are ensured, liability remains squarely on the developer.

Case Title: Romit Barnyal v. Gupta Property Developers Pvt. Ltd. & Anr.
Case No.: Complaint No. HPRERA2025005/C
Coram: R.D. Dhiman (Chairperson) and Vidur Mehta (Member)