RERA Decriminalisation Under the Jan Vishwas Act 2026: Allottee Penalties Revised and Imprisonment Provisions Removed

Kaustav Chowdhury
1 day ago
8 min read

The Jan Vishwas (Amendment of Provisions) Act, 2026 (Act No. 8 of 2026) marks a landmark shift in India's regulatory enforcement philosophy. Receiving Presidential assent on April 7, 2026, and published in the Gazette on April 8, 2026, this legislation decriminalises 717 provisions across 79 Central Acts administered by 23 Ministries. Among the most consequential changes for the real estate sector is the substitution of Section 68 of the Real Estate (Regulation and Development) Act, 2016 (RERA), which removes imprisonment as a penalty for allottees who fail to comply with orders of the Appellate Tribunal. This article examines the amendment in detail, its practical implications for stakeholders, and the broader enforcement landscape it reshapes.

Background: The Jan Vishwas Framework

India's regulatory architecture has long relied on criminal penalties, including imprisonment, for non-compliance with a wide range of statutory obligations. Over time, lawmakers recognised that criminalising minor or procedural defaults created an outsized burden on both citizens and the judicial system without necessarily improving compliance outcomes. The Jan Vishwas initiative represents Parliament's systematic effort to replace disproportionate criminal sanctions with calibrated monetary penalties.

The first edition of this legislative programme, the Jan Vishwas (Amendment of Provisions) Act, 2023, covered 42 Acts and amended 183 provisions. The 2026 Act represents a nearly fourfold expansion, amending 784 provisions across 79 Central Acts. Of these, 717 provisions have been decriminalised, while 67 provisions aim at improving ease of living for citizens and businesses alike.

The Bill was introduced by the Minister of State for Commerce and Industry, Shri Jitin Prasada. Lok Sabha passed it on April 1, 2026, and Rajya Sabha followed on April 2, 2026. The breadth of the Act is significant: the enactments it touches span from 1870 to 2025, cutting across infrastructure, banking, agriculture, shipping, healthcare, mining, insurance, labour, intellectual property, and urban governance. This signals a comprehensive policy shift, one that aligns with global best practices in proportionate regulatory enforcement. Similar decriminalisation trends have shaped compliance frameworks in corporate law as well, where bodies like the ROC now exercise expanded adjudication powers under Section 454 to impose faster penalties on companies and LLPs, replacing slower court-driven processes.

RERA Penalty Architecture: A Primer

Before examining the specific amendment to Section 68, it is useful to understand the original penalty framework under RERA. The Act establishes a tiered structure of penalties depending on the category of the defaulting party and the nature of the violation.

Section 59 (Promoter Non-Registration): A promoter who fails to register a project under Section 3 faces a penalty of up to 10% of the estimated cost of the project. For continued violation, the promoter may face imprisonment of up to three years, or a fine of up to a further 10% of the estimated cost, or both.
Sections 63 and 64 (Promoter Non-Compliance with RERA Authority and Appellate Tribunal Orders): A promoter who defies orders of the RERA Authority or the Appellate Tribunal may be punished with imprisonment of up to three years, or a fine for every day of continued default (cumulatively up to 5% of the estimated cost), or both.
Section 66 (Real Estate Agent Non-Compliance): Agents who fail to comply with orders face imprisonment of up to one year, or a fine for every day of default (cumulatively up to 5% of the estimated cost of the property), or both.
Section 67 (Allottee Non-Compliance with RERA Authority Orders): Allottees who fail to comply with orders of the RERA Authority face imprisonment of up to one year, or a fine for every day of default (cumulatively up to 10% of the property cost), or both.
Section 68 (Allottee Non-Compliance with Appellate Tribunal Orders): This is the provision now amended by the Jan Vishwas Act 2026, which previously mirrored Section 67's penalty structure for Appellate Tribunal orders specifically.

The original framework treated allottees, promoters, and agents with varying degrees of severity, but all categories faced the prospect of imprisonment for non-compliance. The Jan Vishwas Act 2026 specifically targets the allottee's exposure under Section 68.

Key Amendment: Section 68 Substitution

On May 7, 2026, the Ministry of Housing and Urban Affairs (MoHUA) notified the commencement of the RERA-related provisions of the Jan Vishwas Act 2026. The amendment substitutes Section 68 in its entirety. Below is a comparison of the old and new provisions.

The Old Provision: Imprisonment Plus Fine

Under the original Section 68, if any allottee failed to comply with the orders or directions of the Appellate Tribunal, the allottee was punished with imprisonment for a term which may extend to one year, or with a fine for every day during which such default continued (which could cumulatively extend to ten per cent of the cost of the plot, apartment, or building), or with both. The imprisonment component was particularly harsh for individual allottees, who are typically homebuyers or end-consumers of real estate, not commercial operators. The mere threat of criminal prosecution for failing to comply with a tribunal order placed an inequitable burden on what is often the weaker party in a real estate transaction.

The New Provision: Monetary Penalty Only

The substituted Section 68 removes imprisonment entirely. Under the new provision, an allottee who fails to comply with, or contravenes, any order or direction of the Appellate Tribunal is now liable only to a monetary penalty which may extend to ten per cent of the cost of the plot, apartment, or building, as the case may be. The maximum monetary exposure remains the same at 10%, but the nature of the penalty shifts from criminal to civil. This is a critical distinction: allottees can no longer be jailed for non-compliance with Appellate Tribunal orders.

What Remains Unchanged

It is equally important to note what has not changed. Sections 63 and 64, which prescribe penalties for promoters (including imprisonment of up to three years), remain entirely untouched. Section 66, governing real estate agent non-compliance, is also unchanged. The amendment is narrowly targeted at the allottee's liability under Section 68 alone. Promoters and agents continue to face the full spectrum of criminal penalties, including imprisonment, for defying RERA Authority and Appellate Tribunal orders.

Practical Implications for Stakeholders

For Allottees

The removal of imprisonment is a significant relief for homebuyers. Under the old provision, an allottee who was unable to comply with an Appellate Tribunal direction, perhaps due to financial hardship or a genuine dispute about the scope of the order, faced the theoretical risk of criminal prosecution. The new provision converts this into a purely monetary consequence. While a penalty of up to 10% of property cost remains substantial, it removes the stigma and personal liberty implications of criminal proceedings. Allottees should note, however, that non-compliance is still penalised; the amendment does not create impunity.

For Promoters and Developers

Promoters should take careful note that their penalty exposure under Sections 59, 63, and 64 remains unchanged. Imprisonment of up to three years continues to apply for promoters who defy orders of the RERA Authority or the Appellate Tribunal. The asymmetry is deliberate: the legislature recognises that promoters, as commercial entities with greater resources and bargaining power, warrant stricter enforcement. Developers must continue to maintain robust compliance frameworks. Organisations looking to strengthen their internal compliance infrastructure may also consider establishing formal vigil mechanisms and whistleblower policies as part of their governance structure.

For Real Estate Agents

Section 66 remains unchanged, meaning agents who fail to comply with Appellate Tribunal orders continue to face imprisonment of up to one year, or a cumulative fine of up to 5% of the estimated cost of the property, or both. Agents must ensure they have systems in place to track tribunal orders and ensure timely compliance.

For RERA Authorities and Appellate Tribunals

The shift from criminal to monetary penalties against allottees may streamline enforcement. Monetary penalties can be imposed and recovered through civil processes without the procedural complexity of criminal trials. Under Section 44 of RERA, appeals to the Appellate Tribunal must be filed within 60 days, and the Tribunal is expected to dispose of matters within 60 days as well. The decriminalisation of allottee penalties should reduce the caseload burden on criminal courts while allowing RERA authorities to focus on proportionate enforcement.

Broader RERA Enforcement Landscape

The Section 68 amendment does not exist in isolation. It is part of a broader movement towards what commentators have termed "RERA 2.0," a suite of reforms aimed at modernising real estate regulation across the country.

One notable state-level development is Tamil Nadu RERA's implementation of a three-bank-account system, which took effect on January 1, 2026. Under this framework, real estate projects operate with three distinct accounts: a Collection Account (where all payments from allottees are first received), a Separate Account (into which 70% of collected funds are deposited and ring-fenced for construction costs), and a Transaction Account (which holds the remaining 30% for other legitimate project expenses). This system is designed to prevent diversion of buyer funds, a concern that has plagued the real estate sector for years.

The Jan Vishwas Act 2026's decriminalisation of allottee penalties complements these structural reforms. While state-level RERA authorities tighten financial controls on promoters, the Central legislature is recalibrating the penalty framework to ensure proportionality. The direction is clear: stricter financial and operational accountability for developers, and more proportionate consequences for individual homebuyers. This dual-track approach, combining tighter regulatory oversight with decriminalised penalties for consumers, mirrors the broader enforcement philosophy emerging in Indian regulatory law. A similar emphasis on structured institutional enforcement, rather than punitive criminal sanctions, is visible in the establishment of bodies such as the Data Protection Board of India under the DPDP Act 2023, which relies on administrative penalties rather than criminal prosecution.

Action Items and Compliance Checklist

Stakeholders across the real estate ecosystem should take the following steps in light of the Section 68 amendment:

Allottees: Review any pending Appellate Tribunal orders. While imprisonment is no longer a risk, monetary penalties of up to 10% of property cost remain enforceable. Ensure timely compliance with tribunal directions to avoid financial exposure.
Promoters and Developers: Do not misinterpret the amendment as a general softening of RERA enforcement. Sections 59, 63, and 64 remain fully operational with imprisonment provisions intact. Update internal compliance manuals to reflect the current legal position accurately.
Real Estate Agents: Section 66 penalties (imprisonment up to one year and cumulative fine up to 5% of property cost) are unchanged. Maintain a register of all tribunal orders relevant to transactions you have facilitated and monitor compliance deadlines.
Legal Advisors: Update precedent databases and advisory templates to reflect the substituted Section 68. Advise clients on the distinction between the decriminalised allottee penalty and the continuing criminal liability for promoters and agents.
State RERA Authorities: Update penalty guidelines and enforcement protocols. Develop standard operating procedures for the imposition and recovery of monetary penalties from allottees under the revised Section 68.
Industry Associations: Disseminate awareness about the amendment among members. Clarify that the change is narrowly scoped to Section 68 and does not affect the broader RERA penalty architecture for promoters and agents.

Conclusion

The substitution of Section 68 of RERA by the Jan Vishwas (Amendment of Provisions) Act, 2026 is a carefully calibrated reform. By removing imprisonment as a penalty for allottees who fail to comply with Appellate Tribunal orders, while retaining criminal liability for promoters and agents, the legislature has acknowledged a fundamental asymmetry in real estate transactions. Homebuyers, who are typically individuals with limited resources and bargaining power, should not face the same penal consequences as commercial developers who defy regulatory orders.

At the same time, the amendment should not be read as a licence for non-compliance. The monetary penalty of up to 10% of property cost is a significant sum, and allottees remain legally obligated to comply with all tribunal directions. The reform is about proportionality, not permissiveness.

For the real estate sector as a whole, the Jan Vishwas Act 2026, together with state-level innovations such as Tamil Nadu RERA's three-bank-account system, signals a maturing regulatory environment. The direction of travel is towards smarter enforcement: financial accountability for developers, proportionate consequences for consumers, and streamlined administrative processes for regulators. Stakeholders at every level of the real estate ecosystem should update their compliance frameworks, legal advisories, and internal processes to align with this evolving landscape.