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The Punjab and Haryana High Court recently upheld interim penalty orders issued by the Haryana Real Estate Regulatory Authority (HRERA) against Ansal Properties and Infrastructure Ltd. for non-compliance with the Real Estate (Regulation and Development) Act, 2016 (RERA). Despite the company's ongoing insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC), the court ruled that such proceedings do not exempt the company from statutory obligations, emphasizing the need for compliance through its resolution professional.
The Punjab and Haryana High Court has upheld interim penalty orders issued by the Haryana Real Estate Regulatory Authority (HRERA) against Ansal Properties and Infrastructure Ltd. for non-compliance with the Real Estate (Regulation and Development) Act, 2016 (RERA). The court ruled that insolvency proceedings do not exempt the company from statutory obligations, stating that compliance must be ensured through its resolution professional. Advertisement
A division bench comprising Justice Anupinder Singh Grewal and Justice Parmod Goyal dismissed a petition filed by Ansal Properties through its resolution professional. The dispute arose from HRERA orders dated March 26, May 14, and May 28, 2025, directing the company to deposit penalties of INR 8 lakh each in multiple suo motu complaints related to alleged non-compliance with RERA. These proceedings were initiated due to continued defaults in disclosures and project compliance requirements.
Ansal Properties argued that the orders were unsustainable because the company was undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The National Company Law Tribunal (NCLT), New Delhi, admitted a Section 7 petition against the company on February 25, 2025, and appointed a resolution professional, thereby triggering the statutory moratorium under Section 14 of the IBC. The company contended that once the moratorium was in place, HRERA could not insist upon penalties being deposited, as the corporate debtor's management stood suspended and its affairs were under the resolution professional.
However, the bench observed that the resolution professional had access to the assets of the petitioner company. The penalty was imposed due to non-compliance with statutory obligations under RERA, and the court emphasized that such obligations must be fulfilled regardless of the company's insolvency status. The court also clarified that the petitioner company had an alternative remedy of appeal before the Real Estate Appellate Tribunal under Section 43(5) of the RERA Act, instead of directly approaching the High Court in a writ petition.
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