H-RERA imposes penalty on Sumitomo-Krishna Group JV for advertising without registration


Haryana Real Estate Regulatory Authority (HRERA) Gurugram in its first hearing imposed penalty of Rs 30 lakh on a builder, who is developing a real estate project in collaboration with a Japanese company. Their fault lies in advertising about the project before registration with real-estate authority.


This is the first time when authority, becoming functional on February 4, has imposed penalty or taken action against any builder for violation of the provision of Real Estate (Regulations and Development) Act, 2016.


Japanese conglomerate Sumitomo Corporation has formed a joint venture recently with Indian auto components major Krishna Group to develop real estate projects across India. The joint venture, Krisumi Corporation's first project will be an 18 mln sqft development in Gurugram with cost of around Rs 357 cr.


To announce this partnership and their project in Gurugram Krisumi Corporation published advertisement in two leading national english newspapers on February 26 regarding first Indo-Japanese Mega Real Estate Project “Krisumi City Waterfall Residence, sector 36A Gurugram”.


HRERA took cognisance of the advertisement and found that no registration of such project was done with authority. Giving advertisement before HRERA registration of the project is violation of section 3(1) of Real Estate (Regulations and Development) Act, 2016 for which authority as per the rule can imposed penalty upto 10% of the project cost.


In a suo moto action authority issued notice to the developer in February. In their reply to the authority developer had mentioned that they had not invited any sale or done any booking confirmation. That could happen only after the registration was done. 


The matter was listed before authority on Tuesday for hearing where the counsel of the developer pleaded and submitted that it is true that they have made the advertisement but it was not for inviting application for sale but just to make prospective buyers familiar with the project.


Three member HRERA penal consisting of KK Khandelwal (chairman) and Subhash Chander Kush and Samir Kumar as members after hearing the arguments of the party concern and scrutiny of the documents concluded that Krisumi Corporation Pvt Ltd has violated the provision by publishing advertisement in the newspaper before getting HRERA registration of the project.


“Such violation shall not be allowed and in case of violation serve penalty be imposed on the defaulters. Therefore, the authority has decided to impose a penalty of Rs 30 lakh on the company,” said HRERA Gurugram chairman KK Khandelwal in his order.


Next hearing of HRERA is scheduled for April 9-10 when cases related to complaints of home buyers are likely to be taken up for hearing.

Written by The Realty Paper

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