Warrant of Arrest in RERA Execution Proceedings: Can a Promoter’s Director Face Civil Imprisonment? A court can issue a warrant of arrest in civil cases under the Code of Civil Procedure, 1908 only as a measure of last resort to execute a monetary decree.
The Haryana Real Estate Appellate Tribunal has recently dealt with an important issue arising from execution of a RERA order—the issuance of a warrant of arrest against a director of a promoter company for non-compliance with an order directing payment to an allottee in Warrant of Arrest in RERA Execution.
The decision also highlights an important procedural distinction: while the execution order may be challenged, a promoter seeking to appeal a RERA order involving payment to an allottee must first satisfy the mandatory pre-deposit requirement under Section 43(5) of the RERA Act.
Warrant of Arrest in RERA Execution-Procedure
- Subsistence Allowance: The decree-holder must deposit money in advance to cover the daily subsistence cost of the debtor in prison. [1]
Warrant of Arrest in RERA Execution-Background
The original RERA proceedings resulted in an order directing the promoter to pay ₹11,13,936 to the allottee within 90 days.
When the amount remained unsatisfied, execution proceedings were initiated. During execution, the Adjudicating Officer ordered issuance of a warrant of arrest against a former independent director, directing that she undergo three months’ civil imprisonment from the date of arrest, until the judgment-debtor company and its working directors satisfied the underlying order in accordance with law.
The director challenged the execution order before the Haryana Real Estate Appellate Tribunal.
Defence of the Director
The appellant contended that she had served as an independent director of the promoter company only from November 2018 to November 2023 and had subsequently ceased to be a director.
She also relied upon her advanced age and medical condition and argued that, having ceased to be a director, she should not be required to make the pre-deposit prescribed under Section 43(5) RERA.
Mandatory Pre-Deposit Became the Threshold Issue
Before examining the challenge to the warrant, the Tribunal considered whether the appeal itself was maintainable.
The appeal had not been accompanied by the requisite pre-deposit. The Registry accordingly raised an objection concerning deposit of ₹11,13,936.
The Tribunal held that where a promoter challenges an order involving return of money to an allottee, Section 43(5) mandates deposit of the total amount payable to the allottee, including interest and compensation, before the appeal can be instituted.
No Waiver of Mandatory Deposit
Relying upon the Supreme Court’s judgment in M/s Newtech Promoters and Developers Pvt. Ltd. v. State of U.P., the Tribunal held that the statutory pre-deposit requirement is mandatory.
There is no provision under RERA permitting the Appellate Tribunal to waive or exempt the promoter from this requirement.
The Tribunal therefore declined to entertain the appeal without the requisite deposit.
What Happened to the Warrant of Arrest?
The important practical point is that the Tribunal did not adjudicate the merits of the challenge to the warrant of arrest.
Because the appeal itself was not maintainable in the absence of the mandatory pre-deposit, the substantive challenge could not be examined.
The appeal was consequently dismissed.
Thus, the judgment should not be read as a blanket ruling that every director can automatically be arrested in RERA execution proceedings. Rather, the decision primarily turned upon the statutory pre-condition for maintaining the appeal.
Significance for RERA Execution
The case nevertheless highlights the seriousness of execution proceedings under RERA.
A successful allottee is not required to restart litigation after obtaining an order from RERA. The order can be pursued through execution mechanisms provided under the statutory framework.
At the same time, where a person seeks to challenge an order directing payment to an allottee, the statutory conditions attached to the appellate remedy must be strictly complied with.
Key Takeaways
- RERA orders directing payment to an allottee can be subjected to execution proceedings if not complied with.
- In the present case, execution proceedings resulted in an order directing issuance of a warrant of arrest and civil imprisonment against a director.
- A promoter appealing against an order involving payment to an allottee must comply with Section 43(5) RERA.
- The mandatory pre-deposit is generally the total amount payable to the allottee, including interest and compensation, where applicable.
- The Appellate Tribunal has no statutory power to waive or exempt the mandatory deposit.
- An appeal filed without the required pre-deposit can be dismissed at the threshold, without examining the merits of the execution challenge.
Legal Restrictions and Exemptions
- Timing: No arrest can be made before sunrise or after sunset.
- Entering Homes: An officer cannot break open the outer door of a dwelling house unless the occupant refuses entry.
- Women: Section 56 of the CPC provides an absolute exemption preventing women from being arrested or detained in civil prison for money decrees.
- Small Amounts: Arrest is barred if the decretal amount does not exceed ₹2,000
How CPC and Arrest Warrants Apply to RERA Orders
- Civil Court Powers: Under Section 40(2) of the RERA Act, the RERA Authority can exercise the powers of a civil court to execute its orders. This allows them to apply provisions like Order 21 Rule 37 of the CPC to issue show-cause notices and subsequent civil arrest warrants against defaulting builders or their directors. [1, 2, 3, 4]
- The Land Revenue Route: For monetary refunds, RERA primarily issues a Recovery Certificate (RC). This RC is sent to the District Collector, who recovers the amount as “arrears of land revenue”. Under state land revenue codes, collectors also possess coercive powers to arrest and detain the defaulter to enforce recovery. [1, 2, 3]
- Jurisdiction (RERA vs. Civil Court): High Courts, such as the Karnataka High Court, have ruled that a RERA order is not a civil court decree. Homebuyers cannot directly take a RERA order to a regular civil court to initiate an execution petition under Order 21 CPC; the execution petition must be filed directly within RERA’s statutory framework
Execution Process Flow
- Filing an Execution Application: The homebuyer files an execution petition before the RERA Authority if the builder fails to comply within the allowed grace period (usually 45–90 days depending on the state). [1]
- Show-Cause & Coercive Action: RERA issues a notice to the builder. If ignored, RERA either forwards an RC to the revenue collector or applies CPC civil enforcement options (like attaching property or issuing arrest warrants).
Conclusion
The Haryana REAT decision demonstrates the teeth of RERA’s execution mechanism while simultaneously reaffirming the strict statutory discipline governing appeals.
The case is particularly significant because the execution order contemplated civil imprisonment through a warrant of arrest for failure to satisfy the RERA order. However, the Appellate Tribunal ultimately dismissed the appeal on the preliminary issue of mandatory pre-deposit and therefore did not decide the substantive legality of the warrant.
For promoters and directors facing RERA execution proceedings, the decision underlines the importance of prompt compliance with RERA orders and careful adherence to the statutory requirements for challenging such orders.
For allottees, it reinforces the importance of effectively pursuing execution after obtaining a favourable RERA order.
By Satish Mishra, Advocate (99888-17966)
