Warning Haryana-based real estate company Parsvnath Developers of jail if it failed to comply with the Haryana Real Estate Regulatory Authority (HRERA) orders directing payment to homebuyers, the Supreme Court on Monday (July 20) gave the company one final week to deposit the entire recoverable amount with 12% annual interest. The court last week ordered the freezing of bank accounts belonging to Parsvnath Developers Ltd and its sister company, Parsvnath Hessa Developers Pvt Ltd, and issued arrest warrants against senior company officials. The reason? The builder had ignored an order from the Real Estate Regulatory Authority (RERA), the regulator meant to protect homebuyers.A Supreme Court bench, headed by Chief Justice of India Surya Kant, noted that the Collector and police appeared to either be helping the builder dodge the law or had failed to do their jobs.This case tells the story of a larger problem in the housing segment: getting a favourable order from RERA is often just the beginning of a homebuyer’s ordeal.The Parsvnath Exotica disputeThe petitioners were allotted flats in Parsvnath Exotica, a residential project in Gurugram’s Sector 53, in 2006 and entered into flat buyer agreements in early 2007. Each apartment cost over Rs 1 crore and possession was promised within 36 months. The petitioners had paid the entire sale consideration of Rs 1.78 crore between August 2006 and February 2014. The possession, however, was never granted.Parsvnath Exotica was planned as an 18-tower project spread across about 26.9 acres. Occupation certificates were obtained for 11 towers between 2010 and 2011. Five towers, including Tower B-5, where the petitioners’ flats are located remained unfinished.Also read | Haryana bars Parsvnath Developers, its directors from future licencesIn August 2010, Parsvnath Developers entered into a joint venture through which construction and marketing responsibilities for the remaining towers were transferred to Parsvnath Hessa Developers Pvt Ltd. The petitioners have alleged that the arrangement was a “deliberate stratagem to evade liabilities”.Story continues below this adThe petitioners state that visits to the site had revealed that construction remained incomplete. In 2021, the buyers approached the HRERA, which directed the developer to pay interest at 9.3% per annum for every month of delay until possession was handed over. The builder did not challenge the order, allowing it to attain finality.For the buyers, however, enforcing the order proved far more difficult than obtaining it.Aditya Parolia, managing partner at PSP Legal, who has represented homebuyers in disputes across the country, said the biggest problem begins after a buyer wins.“The problem is that there is no teeth in the Act,” Parolia told The Indian Express. “The courts have powers to take coercive action against any one in default. However, those powers are not there with RERA in entirety. You can’t send anybody to jail. You can’t impose a good amount of fine.”Story continues below this adAccording to Parolia, a favourable order does not automatically translate into money in a buyer’s account or possession of a flat. Once an order is passed, the buyer has to enter a separate execution process to get it enforced.Also read | UP RERA amendments brings relief: Homebuyers in unregistered projects can now file complaintsBut that is where delays usually begin. Builders can seek adjournments, challenge orders, or simply fail to appear. Even when authorities move against them, recovery can be slow.“The only thing RERA can do is attach the lands,” Parolia said. But identifying assets itself can be difficult. “It is difficult to find a bank account,” he added, noting that there is no central database that allows authorities to quickly trace a builder’s assets.Even after assets are identified, the matter moves through local revenue authorities. According to Parolia, that process often takes years.Story continues below this ad“I have never heard some land has been auctioned or execution has been done,” he said.Why buyers have few other optionsFor homebuyers, the problem is compounded by the fact that they cannot easily abandon the RERA route and start over elsewhere.The law does not let homebuyers sidestep RERA and approach a civil court for execution instead. Two sections of the Real Estate (Regulation and Development) Act, 2016, — also called the RERA Act — make sure of this.Section 79 bars ordinary civil courts from hearing any dispute that RERA empowers the Authority, adjudicating officer or Appellate Tribunal to decide. Section 89 gives RERA an overriding effect over other laws wherever its provisions conflict with them.Story continues below this adThese two sections close off any workaround. A buyer facing delays in execution cannot simply file a suit elsewhere, and must keep pursuing relief through the forums RERA itself has created, even when those forums move slowly.Also read | Mumbai housing projects under scanner as MahaRERA cracks down on 8,000+ defaultsSo, many homebuyers also explore remedies under the Consumer Protection Act and the Insolvency and Bankruptcy Code (IBC).Under the IBC, homebuyers are treated as financial creditors and can participate in insolvency proceedings against developers. Consumer forums have stronger powers to deal with non-compliance.“The enforcement provisions are good,” Parolia said. “NCDRC (National Consumer Disputes Redressal Commission) or a consumer court can send somebody to jail. That is a criminal provision.”Why do delays continue even after buyers win?Story continues below this adAdvocate-on-Record Sugandha Anand, who has represented homebuyers in real-estate disputes, said obtaining a favourable RERA order is often only the beginning of the process.“The execution of the RERA order is very weak. Even if some homebuyer gets relief, it is just a first step to a long legal battle,” Anand told The Indian Express.According to her, developers often find ways to delay compliance long after an order has been passed against them.“The builders keep channelling money from one project to another or will declare bankruptcy causing a long Insolvency Resolution Process. Secondly, the builders also take advantage of filing appeals and claim lack of assets to pay the homebuyer for several years,” she said.Story continues below this adNewsletterFollow our daily newsletter so you never miss anything important. On Wednesday, we answer readers' questions.SubscribeAnand said the challenge is not merely getting an order from RERA, but ensuring that the order is actually implemented.“The execution of RERA orders is very difficult. I feel there should be some sort of SOP with a strict timeline for enforcement of the execution orders. Local authorities also sometimes fail in executing RERA warrants effectively. There should also be judicial pressure on the builders,” she said.Parolia said that delay compensation itself should not require a separate legal battle. “If a project is delayed, there should be no necessity for anybody to go to court,” he said. “In other countries you have to automatically pay.”At present, however, buyers often have to approach RERA and then spend years pursuing enforcement of the orders they receive. Parolia said stronger enforcement powers and greater administrative support are needed if the law’s promise of timely relief is to become a reality.Story continues below this ad“For that, you need stronger enforcement and administrative powers to these bodies, so that these things get implemented automatically,” he said.