Section 59

Section 59 is RERA's primary penalty for the most fundamental violation — selling real estate without registration. The two-tier penalty structure mirrors NI Act Section 138's approach: an administrative penalty first, then criminal consequences for persistence. **Tier 1 — Administrative penalty (Section 59(1)):** The RERA Authority imposes a penalty of up to 10% of the estimated project cost. For a ₹100 crore project, this is up to ₹10 crore. The word 'may extend to' gives the Authority discretion — the penalty can be lower, but 10% is the ceiling. Factors affecting quantum: duration of non-registration, number of units sold, financial harm to buyers. **Tier 2 — Criminal imprisonment (Section 59(2)):** If the promoter ignores the Section 59(1) order and continues to sell without registration, the offence escalates to a criminal matter — up to 3 years imprisonment and/or an additional fine of up to 10% of the project cost. This two-tier structure creates a graduated deterrence: financial sanction first, criminal exposure if the financial sanction is ignored. **'Estimated project cost' as the penalty base:** The penalty is calculated on the total estimated project cost — not the amount already collected or the project's current market value. This is the cost declared at registration (or estimated value for unregistered projects). For large projects, even a fraction of 10% is a significant amount. **State variation in penalty quantum:** RERA Authorities have discretion on the penalty percentage. MahaRERA has imposed penalties ranging from 2–10% depending on the severity — a brief pre-registration marketing campaign may attract 2–3%, while systematic selling of an entire unregistered project attracts the maximum.