BACK TO RERA Act 2016
RERA Act 2016

Section 7

Revocation of Registration

THE STATUTE

Original Text

The Authority may, on receipt of a complaint or suo motu in this behalf or on the recommendation of the competent authority, revoke the registration granted under section 5, after being satisfied that— (a) the promoter makes default in doing anything required by or under this Act or the rules or the regulations made thereunder; (b) the promoter violates any of the terms and conditions of the approval given by the competent authority; (c) the promoter is involved in any kind of unfair practice or irregularities. Explanation.— For the purposes of clause (c), the term 'unfair practice' means a practice which, for the purpose of promoting the sale or development of any real estate project adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:— (i) the practice of making any statement, whether in an advertisement or prospectus or otherwise that— (A) falsely represents that the services are of a particular standard or grade; (B) represents that the promoter has approval or affiliation which such promoter does not have; (C) makes a false or misleading representation concerning the services; (ii) the promoter permits the publication of any advertisement whether in any newspaper or otherwise of services that are not intended to be offered. (2) The registration granted to the promoter shall not be revoked unless the Authority has given to the promoter not less than thirty days' notice, in writing, stating the grounds on which it is proposed to revoke the registration, and has considered any cause shown by the promoter within the period of that notice against the proposed revocation. (3) The Authority may, instead of revoking the registration under sub-section (1), permit it to remain in force subject to such further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed shall be binding on the promoter. (4) On the revocation of registration of a project— (a) the Authority may issue directions as it thinks necessary to protect the interests of allottees; (b) the registration of the project shall be intimated to the competent authority to take necessary action including completing the real estate project in accordance with section 8; (c) the promoter of such project shall not be entitled to be registered under this Act for such period as may be determined by the regulations.

Legal Commentary

Section 7 is the ultimate enforcement sanction in RERA's regulatory toolkit — revocation of a promoter's registration. Unlike penalties (which are financial), revocation ends the promoter's ability to legally continue the project. Combined with Section 8 (Authority takes over the project), revocation is designed to protect allottees when a promoter has completely failed or defrauded them. **Grounds for revocation:** 1. *Default in obligations* — failure to comply with any RERA requirement: not updating the website, not maintaining the escrow account, not making required disclosures. 2. *Misrepresentation or fraud at registration* — false land title documents, inflated approvals, fabricated financial statements submitted at Section 4. 3. *Wilful default in displaying Registration Number* — failing to display the RERA registration number on advertisements and communications. 4. *Unfair practices* — false advertising, misrepresenting project specifications, claiming unobtained approvals. **Mandatory natural justice — 30-day notice:** No registration can be revoked without giving the promoter a written notice of at least 30 days stating the grounds for proposed revocation, and considering any response. This prevents arbitrary revocation. **The 'lesser sanction' alternative (Section 7(3)):** Rather than revoking registration outright, the Authority can impose additional conditions — a stricter reporting regime, appointment of a financial overseer, restrictions on withdrawals — and allow the project to continue. This is often used for promoters in financial difficulty who are not fraudulent but need tighter oversight. **Post-revocation consequences (Section 7(4)):** After revocation: (a) the Authority issues directions protecting allottees; (b) the competent authority is informed to complete the project under Section 8; and (c) the promoter is barred from future RERA registrations for a specified period. **State variation:** MahaRERA has used Section 7(3) extensively — imposing conditions rather than outright revocation in many cases, appointing project observers and restricting escrow withdrawals for distressed projects.

Questions & Answers

Section 7(4) and Section 8 protect allottees after revocation — the RERA Authority issues directions for allottees' protection, and the competent authority is directed to take over and complete the project. The promoter is barred from future registrations. Allottees retain all rights to compensation and refund.
Yes — Section 7(4)(c) allows the RERA Authority to bar a promoter from future RERA registration for a period determined by regulations. State RERA Authorities have barred defaulting promoters for periods ranging from 3 to 10 years in serious cases.