Penalty Under RERA Act Can Be Set Aside Only By Appellate Authority Not Private Settlement: Goa RERA

The Goa Real Estate Regulatory Authority (RERA) on 22 July held that a penalty imposed under the Real Estate (Regulation and Development) Act, 2016 cannot be waived merely because a promoter and allottees have subsequently settled their disputes, as such penalty can cease to operate only if the appellate authority reduces or sets aside the order imposing it.

Member Vincent D'Silva refused to waive the Rs. 1 lakh penalty imposed on Alfredo M. Cotta and Associates and its proprietor Alfredo M. Cotta for violating Section 11(4)(a) of the 2016 Act, which requires promoters to discharge their obligations, responsibilities and functions under the Act, the Goa Real Estate (Regulation and Development) Rules, 2017 and the agreement for sale. He observed:

“The said settlement terms do not in any way impede the Authority from recovering the said amount of penalty imposed under Section 61 of the Act for violation of Section 11(4)(a) of the RERA Act. There is also no provision in the RERA Act for waiving of the penalty, once imposed, nor can the proceedings be dropped as the penalty by the defaulter form a part and parcel of the State revenue.”

The proceedings arose from a complaint filed by Filomena Fernandes and Nicolau Geraldo Fernandes against Alfredo M. Cotta and Associates, its proprietor Alfredo M. Cotta, and V.P.K. Urban Co-operative Credit Society Ltd. By an order dated 31 January 2024, Goa RERA disposed of the complaint and, among other directions, imposed a Rs. 1 lakh penalty on Alfredo M. Cotta and Associates for violating Section 11(4)(a) of the Act.

Following a settlement between the parties, Alfredo M. Cotta and Associates and Alfredo M. Cotta filed an application before Goa RERA seeking dismissal of the recovery proceedings. They contended that the dispute had been finally resolved and that no further proceedings should survive. They also argued that the Authority's order had merged with the subsequent appellate proceedings.

The matter came before Goa RERA after the Mamlatdar of Tiswadi Taluka, through a communication dated 12 May 2026, sought directions on whether recovery of the Rs. 1 lakh penalty should continue.

Rejecting the application, the Authority held that the settlement between the promoter and the allottees only resolved their inter se disputes and did not affect the independent statutory liability arising from the penalty imposed under the Act. It noted that the settlement recorded by the High Court did not contain any direction reducing or waiving the penalty.

Further, it held that a penalty imposed under the RERA Act can cease to operate only when the order imposing it is reduced or set aside by the appellate authority. It observed that “under the Real Estate Regulatory Authority, a penalty cannot be waived off provided the order imposing penalty is either reduced or set aside by the Appellate Authorities.” Since the penalty formed part of the State revenue, the Authority held that it could not be nullified through a private settlement between the promoter and the allottees.

Accordingly, the RERA dismissed the application filed by Alfredo M. Cotta and Associates and Alfredo M. Cotta seeking to drop the recovery proceedings and directed the Office of the Mamlatdar, Tiswadi Taluka, Panaji, to recover the Rs. 1 lakh penalty in accordance with its order dated 31 January 2024.

Appearances for respondent (M/s Alfredo M. Cotta and Associates & Alfredo M. Cotta): Advocate Aldrin Monteiro.