HRERA sentences developer to jail over failure to refund ₹26 lakh

The Gurugram bench of the Haryana Real Estate Regulatory Authority (HRERA) has sentenced a promoter of a real estate company to one month’s civil imprisonment for failing to refund ₹26.07 lakh to an investor in a commercial real estate project in Sector 89.

The HRERA adjudicating officer, Rajender Kumar, issued the order on Monday, stating that despite previous directions, the developer failed to comply or even submit a response. The order further directed that the judgement debtor (JD) be produced before the HRERA forum on April 16, 2025. 

The complainant, Sohan Lal, a resident of Ghaziabad, had invested ₹26 lakh in a commercial project spread over 5.5 acres developed by the said real estate firm. The developer had obtained the license in 2008 from the Department of Town and Country Planning, the order said.

As per the sale agreement, the investor was promised possession within 36 months and assured a return of ₹27,000 per month until possession was granted. However, neither were the assured returns paid, nor was there any indication that the shop—measuring 300 sq. ft.—would be handed over anytime soon.

Frustrated with the delay, Sohan Lal approached HRERA, stating that he no longer wished to wait indefinitely for possession, as recorded in the court order. 

On November 15, 2023, HRERA had ruled in favour of the complainant, directing the developer to refund the entire investment amount along with interest at a rate of 10.75% per annum from the date of each payment until the actual refund. The order also allowed adjustments for any payments already made towards assured returns.

However, despite the legal directive, the developer neither refunded the amount nor responded to the court’s summons. Citing the failure to comply with its execution order, HRERA decided to take strict action by sending the developer’s director to civil prison for a month. 

”This is a petition seeking execution of the order passed by the Authority on 15.11.2023. Through the said order, the respondent/promoter was directed to refund the entire amount, i.e., ₹26,07,780/-, received from the complainant along with interest at a rate of 10.75% per annum from the date of each payment till the actual refund, after adjusting any assured returns paid,” said Rajender Kumar, HRERA adjudicating officer, in his order.