Maharera Update | Standard Operating Procedure For Enforcement And Recovery Of Interest, Penalty And Compensation Awards

Overview:

The Maharashtra Real Estate Regulatory Authority ("MahaRERA") has issued Circular No. 51/2025 dated 18 November 2025 ("Circular") prescribing a detailed Standard Operating Procedure (SOP) for execution and recovery of interest, penalty or compensation awarded in favour of allottees under Section 31 of the Real Estate (Regulation and Development) Act, 2016 ("RERA"). Click here to read the said Circular.

The Circular has been issued in direct compliance with the Order dated 6 October 2025 passed by the Hon'ble Division Bench of the Bombay High Court in Writ Petition No. 3565 of 2025, which mandated that MahaRERA orders awarding monetary relief must be executed as decrees of the principal civil court of original jurisdiction, with full application of the relevant provisions of the Code of Civil Procedure, 1908 (CPC), particularly Order XXI. Click here to read the said Order.

Key Highlights of the Circular:

1. Legal Basis for Dual Recovery Mechanism

1. The Circular references the order of the Hon'ble Bombay High Court's in Writ Petition No. 3565 of 2025, which clarified that MahaRERA orders should be executed akin to civil court decrees. Previously, recovery was primarily executed as land revenue under Section 40(1) of the Real Estate (Regulation and Development) Act 2016, but now the new SOP integrates the enforcement mechanisms of the Code of Civil Procedure to ensure strict compliance.
2. It also recognises that MahaRERA does not possess civil prison facilities, necessitating referral to the principal civil court for civil detention.

2. Trigger for Execution

Execution proceedings commence only after expiry of 60 days from the date of the original MahaRERA order awarding recovery of interest, penalty or compensation.

3. Detailed Standard Operating Procedure (SOP) Prescribed

The Circular lays down the following mandatory step-by-step procedure to be followed with immediate effect in all pending and future applications:

a) Filing Execution Applications

Complainants (allottees) can file a non-compliance application online 60 days after the passing of the original order if the amount remains unpaid.

b) Timeline for Hearing

The application will be listed for hearing within four weeks of filing of the application. On the listed date, in the event, on the establishment of prima facie non-compliance, a grant of reasonable time to comply to the judgment debtor (usually the promoter) shall be provided; and the matter shall stand adjourned for compliance verification.

c) Asset Disclosure

If the respondent (promoter) fails to record any compliance after the initial hearing, they will be directed to file an Affidavit disclosing all movable and immovable assets, including bank accounts and investments.

d) Examination of Debtor

Further failure to file the affidavit will result in an order for the attendance and examination of the respondent for the production of books or documents. If non-compliance persists despite the above steps, the Authority will pass an order on merits incorporating:

1. Imposition of Penalty: Penalties deemed appropriate based on the severity of non-compliance.
2. Recovery Warrant: Issuance of a Revenue Recovery Certificate to the Collector for attaching and auctioning the respondent's assets.
3. Civil Court Referral: The matter may be transmitted to the principal civil court to secure compliance under Order XXI Rule 41 of the Civil Procedure Code, specifically regarding detention, as MahaRERA does not possess civil prison premises.

If compliance is tendered at any intermediate stage, a hearing will be conducted on merits and appropriate orders will be passed, including a penalty and/or recovery warrant as required.

4. Expected Outcomes:

• Significant Improvement in Recovery Rates: The structured, time-bound SOP combined with dual revenue and civil execution routes is expected to substantially increase actual recovery of awarded amounts for homebuyers.
• Increased Accountability of Promoters: Mandatory asset disclosure, threat of attachment/auction of personal and project assets, and additional penalties will act as strong deterrents against deliberate defaults.
• Faster Resolution and Reduced Litigation: Clear timelines and online filing are likely to reduce delays and the need for allottees to approach high courts for execution.

MHCO Comment:

The Circular marks a watershed moment in RERA enforcement in Maharashtra. This circular represents a significant tightening of the execution machinery within the real estate sector. By aligning its execution process with the Code of Civil Procedure, MahaRERA has addressed a long-standing grievance regarding the difficulty of enforcing recovery orders. By incorporating the Bombay High Court's directives and creating a robust, CPC-aligned execution framework, MahaRERA has effectively transformed its monetary awards from "paper orders" into practically enforceable decrees. Promoters are now exposed to swift revenue recovery action by District Collectors as well as full-fledged civil execution proceedings, including the possibility of personal asset attachment or imprisonment for a period of up to three months.

This move aims to provide much needed relief to aggrieved homeowners by reducing deliberate defaults in payment of penalties and compensation. For stakeholders seeking clarity, a Real estate law firm in Mumbai can now better assist homebuyers and developers in navigating this strengthened enforcement landscape.

This article was released on 4 December 2025.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.