Section 40

Section 40 solves the 'judgment-proof builder' problem — a promoter who receives a RERA compensation order but simply ignores it. Without a recovery mechanism, RERA orders would be unenforceable against builders who claim poverty or simply delay compliance. **Land revenue arrears recovery — how it works:** 1. RERA Authority or Appellate Tribunal passes an order directing the promoter to pay compensation/penalty. 2. Promoter fails to pay within the specified time. 3. The Authority issues a 'Certificate of Recovery' to the District Collector where the promoter owns property. 4. The Collector recovers the amount through the land revenue machinery — which includes attachment and sale of the promoter's immovable property. **Why land revenue recovery is powerful:** The land revenue machinery has coercive powers that individual judgment enforcement lacks — attachment of property, auction sale, and ultimately imprisonment of the defaulting party if assets are insufficient. It is the same mechanism used to recover government dues. **Against allottees too:** Section 40 applies symmetrically — if an allottee defaults on a payment obligation and the builder obtains an RERA order, the same recovery mechanism applies against the allottee's property. **The enforcement gap in practice:** Despite Section 40, recovery against financially distressed promoters remains difficult in practice. Builders who are insolvent or whose projects are stalled may not have liquid assets — the IBC (Insolvency and Bankruptcy Code) proceedings often run concurrently with RERA enforcement, creating complex jurisdictional issues. **IBC and RERA interaction:** The Supreme Court in Pioneer Urban Land (2019) confirmed that allottees are 'financial creditors' under IBC — they can participate in insolvency proceedings while simultaneously holding RERA orders. The relationship between IBC and RERA recovery under Section 40 remains an evolving area of law.