No Jail for Defaulting Buyers: What the Jan Vishwas Act Did to RERA Section 68
Picture a flat owner in Bangalore who loses an appeal and is told by the tribunal to clear pending instalments, then lets the deadline pass. Until this spring, that owner could in theory have been sent to jail. From 7 May 2026 the prison term is gone, and only a financial penalty remains, capped at one-tenth of the home's price. The details follow, along with what was left untouched for builders and brokers.
The Short Answer
Section 68 of the 2016 real estate law is among the rare penalty provisions written for the buyer. A 2026 amending statute rewrote it, and the key points are these:
- The year of imprisonment has been deleted.
- The penalty is now financial only, and it may be as much as 10% of what the home cost.
- The new text applies from 7 May 2026.
- Promoters and agents keep their prison terms.
Section 68 Before and After
The law calls anyone who has booked or bought a plot, flat or building with a promoter an "allottee". Rights fill most of the Act's text where this person is concerned, with only a handful of duties and penalties. Section 68 is the clause dealing with an allottee who refuses to follow a direction passed by the Appellate Tribunal.
| Point | Earlier text | Text since 7 May 2026 |
|---|---|---|
| Who is covered | An allottee who fails to follow a Tribunal order | The same allottee |
| Punishment | Up to one year in prison, a daily fine, or both | A monetary penalty only |
| Upper limit on money | Daily fines adding up to 10% of the property's cost | Penalty capped at 10% of the property's cost |
The percentage cap was not lowered. On a home bought for Rs. 1 Crore the most that can be imposed is Rs. 10 Lakhs, and the real figure in a case turns on the order and the facts.
The Law Behind the Change
The amendment is contained in Act 8 of 2026, a statute known as Jan Vishwas that edits penalty provisions in dozens of central laws in one go. Its theme is simple: answer small and procedural lapses with a fine instead of a criminal record. The RERA change is entry 70 in the Schedule.
The government's press release of 4 April 2026 gave the size of the project. It reaches 79 laws run by 23 ministries and 784 provisions, of which 717 are being decriminalised and 67 aim at easier living. An earlier Act of the same name, passed in 2023, had changed 42 laws and decriminalised 183 provisions.
How Fast It Moved
From first reading to enforcement took about six weeks. The Lok Sabha received the Bill on 27 March 2026 and approved it on 1 April, and the Rajya Sabha followed on 2 April. Assent came from the President on 7 April, and the Gazette carried the Act a day later.
Because every ministry fixes the start for its own laws, the RERA piece needed a notification of its own. The housing ministry notified S.O. 2287(E) on 7 May 2026, and that started the RERA item. A different entry, covering the central bank's statute, came alive only in June.
What Builders and Agents Still Face
The sections that bind promoters and brokers keep their old text, so a builder who defies the Tribunal can still be put in prison. The table summarises them.
| Section | Default | Maximum consequence |
|---|---|---|
| 59 | Continuing sales in a project with no registration | Penalty not above 10% of the project's estimated cost, and for continued default as much as three years in prison, a further 10% fine, or both |
| 60 | False information in a registration application | Penalty not above 5% of the project's estimated cost |
| 61 | Other breaches by a promoter | Penalty not above 5% of the project's estimated cost |
| 63 | Ignoring an order of the state regulator | Daily penalty that can accumulate to 5% of the project's estimated cost |
| 64 | Promoter ignoring a Tribunal order | Prison for as long as three years, a daily fine that can accumulate to 10%, or both |
| 66 | Agent ignoring a Tribunal order | Up to one year in prison, a daily fine accumulating to 10% of the unit's price, or both |
Section 67 also remains the same. A buyer who disregards a direction of the regulator, as opposed to the Tribunal, risks a penalty no higher than 5% of the home's cost, and that section never allowed a jail term.
Where a Karnataka Buyer Is Affected
Complaints in the state start with K-RERA, and its decisions can be appealed before the Karnataka Real Estate Appellate Tribunal. Buyers get to that forum either by appealing or by defending an appeal that a builder has filed. Section 68 comes into play only after a direction has been issued that the buyer then ignores.
Such directions usually involve money or handover. Section 19 requires every buyer to pay instalments on schedule, as the sale agreement lays down. It also makes the buyer responsible for a share of registration costs, taxes, utility and maintenance dues, and interest on late payment.
A buyer who complies with Tribunal orders sees no change. A buyer weighing an appeal loses one anxiety, since an unfavourable result can no longer result in imprisonment under this clause. Ignoring an order now has a financial price with a fixed ceiling.
What the Amendment Leaves Alone
Three limits keep the change in perspective:
- Tribunal orders still bind, and under section 57 they can be executed like a civil court decree, so unpaid dues remain recoverable.
- One-tenth of the price is a heavy sum on a Bangalore flat, and it is added to whatever the order itself makes the buyer pay.
- Refunds, interest for delay and compensation owed by a builder are collected as before, so the speed of enforcing a buyer's own order is the same as earlier.
The way of challenging the Tribunal is also the same. Section 58 gives either side 60 days from receipt of the order to approach the High Court.
A Tidy-Up in the Rules
Section 70 lets an offence that carries imprisonment be compounded, which means closed by paying a sum fixed in the rules. A table in those rules lists the sums. Once jail left section 68, the row for it had no purpose.
The Centre has started removing it where it frames the rules. On 1 July 2026 it changed the general rules for Daman and Diu, and those for Delhi's National Capital Territory. States frame their own RERA rules, so a similar edit in Karnataka would depend on a state notification.
Tips if You Are in a Dispute
Anyone with a matter pending at K-RERA or the Tribunal, whether as petitioner or respondent, benefits most from orderly records. These habits help:
- Preserve the agreement for sale, each payment receipt and all demand letters, as unpaid instalments lie behind most orders against buyers.
- Read the operative paragraph of an order to learn what is demanded and by which date.
- Comply in the time allowed or appeal before the period ends, since the penalty targets orders that are plainly ignored.
- Consult a lawyer familiar with the Tribunal before agreeing to a settlement or giving up a claim.
