The Real Estate Regulator Authority-Karnataka (RERA-K) will have to refund lakhs of rupees collected as ‘delay fee’ from promoters and developers of various real estate projects as the High Court of Karnataka has quashed the circular issued by the RERA-K imposing it for belated submission of quarterly updates and annual audit statements on RERA approved projects.
“…the Real Estate (Regulation and Development) Act, 2016, and the Rules have not clothed the authority with the power to levy or recover fees beyond those expressly authorised. In the absence of such express conferment, no circular, however well intentioned, can conjure into existence a financial liability against the promoters. This principle is neither novel nor chartered,” the court observed.
Justice M. Nagaprasanna passed the order while allowing over 75 petitions filed by Sharada Achar and several other land owners, builders, real estate developers, who had questioned the legality of the circular issued by the RERA-K on September 3, 2020.
Through the circular, the RERA-K had imposed a ‘delay fee’ of ₹10,000 for delay up to one month from due date for updating quarterly reports on RERA’s website from due date, and ₹20,000 a month for delay beyond one month. The RERA-K had collected lakhs of rupees as ‘delay fee’ from the promoters and developers not only from the date of circular but also with retrospective effect from 2018-19.
A perusal at the RERA-K’s circular does not indicate any source of power for imposition of a fee, and does not have the method of calculation, of fee as well, and therefore, the circular apart from it being issued at its whim, does not trace its power to the RERA Act, the court said.
Stating that the petitioners in all these cases become entitled to consequential benefits that would flow due to quashing of the circular while making it clear that quashing of the circular would not come in the way of legislation or imposition of such a fee in a manner known to law.
Published – September 22, 2025 11:39 pm IST
