Punjab RERA Calls For Strategic Development Planning To Curb Mushrooming Of Unplanned Projects

The Punjab Real Estate Regulatory Authority has warned that the absence of regional strategic planning is contributing to repeated failures in real estate projects, particularly around fast-growing urban belts such as Chandigarh and Zirakpur.

In a detailed order, the Authority said unplanned and unchecked development along highways and arterial roads reflects either the non-formulation of a strategic master plan or a failure to adhere to one and called for urgent corrective measures at a systemic level.

The observations were made by Member Arunvir Vashista while deciding a complaint relating to a delayed commercial project developed as a joint venture between the Patiala Urban Planning and Development Authority and Omaxe in Patiala.

It said the “mushroom growth of commercial and residential projects right on the main roads and highways”, accompanied by heavy footfall and congestion, pointed to serious lapses in planning.

It noted that development was taking place without adequate regard for zoning, environment and topography, even though large parts of Punjab, Haryana, and Chandigarh fall in “most vulnerable” seismic zones.

Invoking its powers under Section 32 of the Real Estate (Regulation and Development) Act, 2016, the Authority said there was an "urgent” need for regional strategic planning to regulate development in rapidly urbanising areas.

It emphasised the need for regional planning that takes into account zoning norms, environmental concerns and seismic vulnerability, rather than addressing projects in isolation.

"It is for this reason it becomes urgently indispensable to have both a regional and a national strategic plan. It also required at the same time that those plans are revised from time to time depending upon the changes that are necessitated for sustainability of development in view of everchanging geological conditions. Besides, regional and national level strategic planning inherently involves long term planning in specific areas with flexibility and adaptability encouraging environmentally sustainable construction and affordable housing promoting standardization and use of appropriate construction material, fixtures, fittings and construction techniques.", the authority said.

The case before the Authority was filed by Anu Gupta, who purchased a commercial site in the 'PDA-OMAXE City' project at Patiala through an open auction in 2010 for a little over Rs 65 lakh. The project was a joint venture between the Patiala Urban Planning and Development Authority and Omaxe under an agreement signed in 2006.

Under the allotment terms, possession was to be handed over within 30 days of completion of development works or after payment of 50% of the sale price, whichever was later. Gupta paid the full amount, but the site remained surrounded by undeveloped land and lacked basic amenities such as roads, water supply and drainage.

In 2014, she was offered what the Authority described as a notional or “paper possession”. Gupta told the Authority that the site was unusable and that the delay had defeated her plan of starting a self-employment venture. She argued that despite full payment, the project had effectively stalled because of disputes between the joint venture partners.

Both promoters sought to shift responsibility. PDA argued that the complainant had accepted possession without protest and blamed Omaxe for failing to carry out development works. Omaxe, in turn, said the non-development was due to factors beyond its control, pointing to termination notices issued by PDA and prolonged litigation between the parties before the Punjab and Haryana High Court. It was also argued that since the project was not registered under RERA, the Authority lacked jurisdiction to entertain the complaint.

The Authority rejected these defences. It held that a commercial unit cannot serve any purpose if the surrounding area remains undeveloped and basic facilities are missing.

“The unit in question is a commercial unit and there is no use of such an unit when it is left without its vicinity developed,” the order said.

It also made it clear that disputes between promoters cannot be used to deny buyers their rights. “Their mutual dispute interse promoters cannot in any manner justify their acts in breaching the trust and confidence shown in them, by the common people who purchased the units in their projects. Whosoever and how much out of the two could be blamed or made liable for the default, they have to share their liability if adjudged any jointly and severally both,” the Authority observed.

On the issue of maintainability, the Authority dismissed the argument that non-registration of the project placed it outside the purview of RERA. It held that the powers conferred on the Authority are wide and unfettered, and that lack of registration cannot be used as a shield to escape accountability under the Act.

While granting relief to the complainant, the Authority also recorded a set of broader recommendations to prevent similar failures. It suggested an API-based single-window mechanism to ensure timely approvals, mandatory project insurance to protect buyers from promoter distress, and digitisation of land records to reduce title disputes.

In the operative part of the order, the Authority held the Patiala Urban Planning and Development Authority and Omaxe jointly liable for the delay. It directed them to pay interest, at the rate prescribed under the rules, on the entire amount deposited by the complainant from July 2014, when notional possession was offered, until a valid possession is handed over after a completion certificate is obtained.

It also directed the Secretariat to circulate the order to all stakeholders and concerned authorities for what it described as “soul-searching” and corrective action.

For Complainant: J.P. Singla

For PUDA (Respondent No. 1): Balwinder Singh

For Omaxe Limited (Respondent No. 2): Shri Munish Gupta & Manjinder Kumar Bhargav