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by sayum
26 August 2026 10:38 AM
“Where Statute Prescribes Explicit Procedure for Recovery, Such Procedure Must Be Scrupulously Adhered To – No Deviation Is Permissible”, In a significant ruling reinforcing the enforceability of RERA orders, the Himachal Pradesh High Court has held that vesting of project land in the State Government under the Tenancy and Land Reforms Act cannot frustrate recovery of monetary compensation awarded by the Real Estate Regulatory Authority.
High Court of Himachal Pradesh directed the District Collector, Solan, to ensure that recovery proceedings pursuant to a RERA order are taken to their “logical conclusion expeditiously in accordance with law.” The Court ruled that recovery under Section 40 of the Real Estate (Regulation and Development) Act, 2016 (RERA) must proceed strictly in accordance with the statutory mechanism under the Himachal Pradesh Land Revenue Act, 1954.
The Court emphasized that “the vesting of the subject land in the State pursuant to a separate order does not defeat or render the recovery order nugatory.”
Homebuyer Awarded Refund with 9.3% Interest by RERA
The petitioner, Pawan Wasant Borle, had booked a housing unit in a project styled “Aamoksh @ Kasauli” for a total consideration of ₹88 lakh and paid ₹78,00,491 pursuant to an agreement dated 26.05.2015. The promoters failed to deliver possession.
Aggrieved, the petitioner approached the Himachal Pradesh Real Estate Regulatory Authority under Sections 11, 18, 19 and 40 of RERA. On 26.02.2021, RERA allowed the complaint and directed refund of ₹78,00,491 with interest at 9.3% per annum, calculated as “SBI highest MCLR + 2%,” payable from the dates of respective payments.
The Authority ordered that the refund be made within four months and warned that non-compliance would attract further action under Sections 38, 40 and 63 of the Act. The District Collector, Solan was also directed to attach the project land until refund.
The order attained finality, as it was not challenged.
Recovery Certificate Issued — Proceedings Stalled After Vesting of Land
Upon non-compliance, RERA issued a recovery certificate on 17.10.2022 under Section 40(1) of RERA read with Rule 22 of the Himachal Pradesh RERA Rules, 2020, for ₹1,21,61,450/-. The District Collector declared the amount recoverable as arrears of land revenue under Section 103 of the Himachal Pradesh Land Revenue Act and transmitted the matter to the Tehsildar (Recovery), Solan.
However, recovery proceedings stalled after 15.09.2023. The Tehsildar noted that the project land had vested in the State Government pursuant to proceedings under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972. The vesting order dated 05.01.2023 had been affirmed by the Divisional Commissioner on 29.11.2024.
The petitioner approached the High Court seeking enforcement of the RERA order and direction to revenue authorities to execute the recovery.
Can Vesting of Project Land Defeat Recovery Under RERA?
The principal question before the Court was whether recovery proceedings under Section 40 of RERA, once initiated and crystallized into a recovery certificate and demand order, could be halted merely because the specific project land had vested in the State.
The Court answered in the negative.
Justice Jyotsna Rewal Dua observed that “merely on the ground that land with respect to which the petitioner had claimed redressal of his grievance before RERA has now been ordered to be vested in the State Government, the recovery proceedings… cannot be put on hold/stopped.”
Section 40 RERA: Recovery as Arrears of Land Revenue Is Mandatory
The Court reproduced Section 40 of RERA and underscored that once a promoter fails to comply with a refund or compensation order, the amount “shall be recoverable… as an arrears of land revenue.”
It noted that the RERA order dated 26.02.2021 had attained finality and the recovery certificate was validly issued under Section 40(1). Consequently, the District Collector was statutorily obliged to proceed under Section 103 of the Himachal Pradesh Land Revenue Act.
The Court emphasized that “finality of the order passed by RERA… is a matter of record,” and its enforcement cannot be frustrated by subsequent changes in the debtor’s asset profile.
Land Revenue Act Provides Multiple Modes of Recovery
In a detailed analysis, the Court examined Sections 74 to 83 of the Himachal Pradesh Land Revenue Act, which prescribe comprehensive recovery mechanisms, including:
Particularly relying on Section 83, the Court highlighted that where arrears cannot be recovered from the specific land in question, proceedings may be initiated against “other immovable property of the defaulter.”
The Court categorically held:
“The Act itself provides alternative mechanism for execution. The order is to be executed in its earnest. The statutory alternatives… ensure the order’s enforceability despite changes in the debtor’s asset profile. To hold otherwise would undermine the legislative intent and frustrate the creditor’s right.”
Administrative Inaction Cannot Be Countenanced
The Court found that the Tehsildar (Recovery), Solan had not proceeded with recovery for more than two years. Such inaction was held to be contrary to statutory duty.
Justice Dua observed:
“Where statute prescribes explicit procedure for the recovery of arrears, such procedure must be scrupulously adhered to in its entirety. No deviation is permissible.”
The Court held that the action of not proceeding further solely on the ground of vesting of land “cannot be countenanced.”
Disposing of the writ petition, the High Court directed the District Collector, Solan to ensure that recovery proceedings pursuant to:
“are taken to their logical conclusion expeditiously in accordance with law.”
Pending applications were also disposed of.
This judgment reinforces the statutory strength of Section 40 of RERA and clarifies that recovery as arrears of land revenue is not contingent upon the continued availability of a specific project asset. By mandating strict adherence to the recovery framework under the Land Revenue Act, the High Court has protected the rights of homebuyers and ensured that technical or subsequent revenue developments cannot render RERA awards illusory.
The ruling serves as a clear reminder to revenue authorities that statutory recovery mechanisms must be fully exhausted and cannot be stalled on extraneous grounds.
Date of Decision: 25 February 2026
