HRERA Sentences Gurugram Developer to One Month Jail for ₹26 Lakh Refund Default

The Gurugram bench of the Haryana Real Estate Regulatory Authority (HRERA) has sentenced a real estate developer to one month of civil imprisonment for failing to refund ₹26.07 lakh to an investor in a commercial project located in Sector 89, Gurugram. The order was issued after the developer repeatedly failed to comply with HRERA's directives and did not submit a response regarding the refund.

Investor's Complaint and HRERA Ruling

The case was brought to HRERA by Sohan Lal, a resident of Ghaziabad, who had invested ₹26 lakh in a commercial project spanning 5.5 acres. The developer had obtained the necessary licenses for the project in 2008 from the Department of Town and Country Planning.

According to the sale agreement, the investor was assured possession of the commercial unit within 36 months. Additionally, the developer had committed to paying ₹27,000 per month as an assured return until possession was granted. However, neither possession was given within the stipulated time nor were the promised returns paid. The unit in question measured 300 square feet, but there was no indication that the investor would receive it in the foreseeable future.

After facing prolonged delays and unfulfilled commitments, Sohan Lal decided to file a complaint with HRERA. On November 15, 2023, HRERA ruled in favor of the investor, directing the developer to refund the entire amount along with an annual interest rate of 10.75% from the date of each payment until the actual refund. The order also stated that any payments made toward the assured returns could be adjusted against the total refund amount.

Legal Action and Imprisonment Order

Despite the clear ruling, the developer neither refunded the amount nor responded to court summons. As a result, HRERA issued a strict directive, holding the developer accountable for non-compliance. On March 17, 2025, HRERA adjudicating officer Rajender Kumar passed an order sentencing the developer’s director to one month of civil imprisonment.

"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," the order stated.

Additionally, the judgment debtor (JD) has been directed to appear before the HRERA forum on April 16, 2025, for further proceedings. The case highlights HRERA’s enforcement measures to ensure that developers fulfill their financial obligations to investors.

In recent years, HRERA has taken multiple steps to address grievances related to project delays, refund defaults, and unfair trade practices. By enforcing strict measures, such as civil imprisonment, the authority is sending a clear message that non-compliance will have serious consequences.

Investors who face similar issues with developers failing to honor contractual obligations are encouraged to approach HRERA or other regulatory bodies for legal recourse. With increased regulatory oversight, the real estate sector in Haryana is expected to see improved compliance and accountability among developers.