Mahagun, Gaursons Among Promoters Penalised by UP-RERA

Lucknow/GautamBudh Nagar, October 1, 2025: The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has ordered strict action against several prominent promoters and builders.

This action is not only aimed at preventing violations of the law but also at maintaining the trust of common people, who for years have been demanding transparency in the process of buying homes.

Action has been taken under these Sections:

Section 13: No deposit or advance to be taken by promoter without first entering into agreement for sale-(1) A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.

The agreement for sale referred to in sub-section (1) shall be in such form as may be prescribed and shall specify the particulars of development of the project, including the construction of building and apartments, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost of the apartment, plot or building, as the case may be, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handed over, the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default, and such other particulars, as may be prescribed.

Section 61: Penalty for contravention of other provisions of this Act. If any promoter contravenes any other provisions of this Act, other than that provided under Section 3 or Section 4, or the rules or regulations made thereunder, he shall be liable to a penalty which may extend up to five per cent. of the estimated cost of the real estate project as determined by the Authority.

Section 63: Penalty for failure to comply with orders of Authority by promoter-If any promoter, who fails to comply with, or contravenes any of the orders or directions of the Authority, he shall be liable to a penalty for every day during which such default continues, which may cumulatively extend up to five per cent., of the estimated cost of the real estate project as determined by the Authority.

Major Action Against Mahagun Group

A total of 16 complaints related to the Mahagun Group were disposed of by the bench. Enquiry revealed that the group had uploaded a drawing related to electrical installations on the RERA portal and misrepresented it as an electrical NOC in order to gain undue advantage.

They had already been warned earlier that repeating such actions would lead to proceedings under Section 63 of the Act. However, since no compliance was ensured, the bench has now directed that all such matters be forwarded to the Secretary, UP RERA, with instructions to present them before the authority under Section 63 for punitive action.

Orders Against Mahalaxmi Group

In nine complaints, allegations against Mahalaxmi Group were found to be true. It was established that they failed to issue the allotment letter/BBAs to buyers in the government-prescribed format.

This is a direct violation of Section 13 of the RERA Act. The bench took it seriously and recommended penalties under Section 61, forwarding the cases to the authority.

S.J.P. Hotels and Resorts Pvt. Ltd.

In a complaint, it was found that the company did not issue the allotment letter in the prescribed format. The bench held that this too was a violation of Section 13. Accordingly, the matter was forwarded to the authority with a recommendation for penalty under Section 61.

Allegations Against Panchsheel Buildtech Pvt. Ltd.

In a complaint against Panchsheel Buildtech, the same violation was found: the allotment letter was not registered in the prescribed format. The bench held it to be a breach of Section 13 and directed that the case be forwarded for punitive action under Section 61.

Gaursons Realtech Pvt. Ltd.

In a complaint against Gaurs Realtech, it was found that the company violated the status quo order passed by the bench. This was considered a violation of Section 63. The bench therefore ordered that the case be forwarded under Section 61 for penalty.

Mahalaxmi Infrahomes Pvt. Ltd.

In a complaint, the company attempted to dismiss the case by filing a preliminary objection. However, it was found that the objection contained false and misleading facts. The bench observed that this wasted the time and energy of the court. As a result, the company was imposed with a cost of INR 10,000.

Gaursons Hi-Tech Infrastructure Pvt. Ltd.

In four complaints, the company similarly attempted to dismiss the cases by presenting misleading facts in preliminary objections. The bench found this to be deliberate negligence and misleading conduct. Consequently, the company was ordered to pay INR 25,000 per case, amounting to a total cost of INR 1,00,000.

Relief for Homebuyers

These orders send a clear message that homebuyers will no longer be cheated. For years, people have suffered due to the arbitrariness and breach of promises by builders. Many did not get timely possession, essential documents were withheld, and false information was shared. This RERA action will strengthen the confidence of homebuyers and put pressure on builders to comply with the law.