Supreme Court slams Parsvnath, State officials over non-payment of compensation to homebuyers; freezes bank accounts

The Supreme Court on Monday came down heavily on the failure to enforce orders passed by the Haryana Real Estate Regulatory Authority (HRERA) against Parsvnath Developers to either hand over possession of flats to homebuyers or pay compensation. .A Bench of Chief Justice of India (CJI) Surya Kant and Justices Joymalya Bagchi and V Mohana observed that even the bailiff could not execute the bailable warrants issued against the company and its directors.In light of the same, the Court issued fresh bailable warrants against Parsvnath Hessa Developers Pvt. Ltd. and Parsvnath Developers Ltd. and their directed and ordered them to appear before the Court on July 17.Pertinently, the Court also directed that their bank accounts be frozen.During the hearing, CJI Kant remarked that the issue reflected a larger problem with the implementation of the Real Estate (Regulation and Development) Act."Once we had made some observations on RERA. We had said that this goes into slumber and how people suffer," the Chief Justice observed..The Court was hearing a plea by one Rita Tikku and other homebuyers of Parsvnath Exotica project in Gurugram's Sector 53.They claimed that despite paying the entire sale consideration nearly two decades ago, they were yet to receive possession of their homes.Senior Advocate Priya Hingorani, appearing for the petitioners, submitted that one of the petitioners was a cancer survivor and informed the Court that the builder was now based in Chandigarh..The Bench questioned why non-bailable warrants issued by HRERA had not been executed."No single projects being completed by them. Why non-bailable warrants issued by RERA not being executed? He should have been arrested. High Court is also flooded with cases," the Chief Justice said.The Court recorded that the petition highlighted the plight of homebuyers who, despite paying the full sale consideration two decades ago, continued to be deprived of their homes..The Court noted that the petitioners, all senior citizens, were allotted residential units in the Parsvnath Exotica project in 2006 and executed Builder Buyer Agreements in early 2007. The total sale consideration was ₹1.78 crore and possession was to be handed over within 36 months, becoming due in February 2013. Although the petitioners paid the full sale consideration, they later found that construction was nowhere near completion.The Bench recorded that the petitioners approached HRERA, which awarded compensation. Since the builder did not challenge those orders, they attained finality. However, neither possession was handed over nor compensation paid. Even execution proceedings proved futile despite multiple show cause notices being issued to the directors of the builder company..The Chief Justice further observed that when no recovery could be made, bailable warrants were issued but even the bailiff was not allowed to enter the builder company. The Court noted that the petitioners continued "running from pillar to post" before approaching the Supreme Court.The Bench observed that the matter raised concerns extending beyond the individual dispute."In our considered prima facie view, these proceedings raise concerns extending beyond the present case. The RERA Act provides a statutory mechanism to protect interest of homebuyers but these cases reveal that the efficacy of such law is ultimately if it is able to secure the implementation of orders passed under the Act. The builder has brazenly disregarded orders passed by HRERA," the Court observed.The Court also noted that the Punjab and Haryana High Court had in April 2025 struck down a government notification empowering HRERA to issue recovery certificates and that the matter was presently under challenge before the Supreme Court.The Bench observed that it was satisfied that the Collectors and the local police had either colluded with builders or failed to discharge their responsibility.Hence, the Court directed the issuance of bailable warrants against two Parsvnath companies and their directors. They were ordered to appear before the Court on July 17. It warned that non-bailable warrants would be issued if they failed to appear.The Bench further stayed the creation of third-party rights in respect of the project, ordered that the bank accounts of the two companies as well as the personal bank accounts of the directors and officials of the companies remain frozen. The Court further directed the Chief Secretary of Haryana, all District Collectors, all Police Commissioners in Haryana and all banks to comply with its directions.The matter will next be heard on July 17..[Read Order]