Karnataka: 10 Builders Yet to Clear ₹347 Crore in Penalties

Years after the Real Estate Regulation and Development Act (RERA) came into force, several major builders in Karnataka continue to defy recovery orders issued by the Karnataka Real Estate Regulatory Authority (K-RERA).

This prolonged inaction has left countless aggrieved homebuyers in a frustrating cycle of chasing justice through courts and government offices—despite having rulings in their favor.

When RERA was launched, it brought with it the hope of timely justice and compensation for victims of real estate fraud. However, that hope has remained largely unfulfilled.

A stark reminder of this failure is the fact that just 10 prominent builders collectively owe ₹347 crore in penalties—an amount they have yet to pay.

As revealed through a Right to Information (RTI) request, by May 15, K-RERA had issued 656 Revenue Recovery Certificates (RRCs) involving 565 cases against major builders and promoters.

The total penalty amount from these cases stood at ₹366.20 crore. Yet, penalties have been recovered in only 62 of those cases, yielding just ₹18.70 crore. The remaining 594 cases continue to show a collective outstanding amount of ₹347.44 crore.

Activists have criticized K-RERA for its lack of decisive action, despite the significant dues. They allege that the authority is shirking its duty by offloading the responsibility onto revenue officers, leaving buyers to fend for themselves in a broken system.

Buyers Caught in a Legal Deadlock

Under Section 63 of the RERA Act, non-compliance with authority orders should result in daily penalties for builders, up to 5% of the project’s estimated cost.

However, K-RERA has failed to enforce this provision, alongside Section 53, which is meant to ensure effective implementation of recovery actions.

“Even when buyers receive favorable rulings, they remain unaware of how to enforce them,” said an activist. “Worse still, if RERA itself cannot uphold its own decisions, buyers are forced to escalate their cases to civil courts—a costly and time-consuming process that defeats the purpose of having a dedicated regulatory authority.”