RERA Act, 2016 Section 7 and Section 8 Real Protection for Buyers

Section 7 — Revocation of Registration

Grounds for revocation — S.7(1)

The Authority can revoke a project's registration (granted under Section 5) on receiving a complaint, on a competent authority's recommendation, or suo motu, if satisfied that the promoter:

• (a) has defaulted in doing anything required under the Act, rules, or regulations (e.g., diverting the 70% escrow funds, missing possession timelines, failing to enter into the agreement for sale);
• (b) has violated any term or condition of the approval given by the competent authority; or
• (c) is involved in unfair practices or irregularities (false representations about standards, approvals, or affiliations).

Procedural safeguard — S.7(2)

Registration cannot be revoked without at least 30 days' written notice to the promoter, stating the grounds, and the Authority must consider any cause the promoter shows in response within that period. This is the natural-justice check on the power.

Alternative to revocation — S.7(3)

Instead of revoking, the Authority may let the registration continue in force subject to further conditions it thinks fit to impose in the allottees' interest — and those conditions bind the promoter. This provision was tested in Neel Kamal Realtors, where the Bombay High Court read Sections 6 and 7(3) together and held the Authority can grant extensions beyond the one-year cap under Section 6 on a case-by-case merit assessment rather than revoking outright. This is the provision your developer clients would lean on to avoid outright revocation.

Consequences on actual revocation — S.7(4)

Once revocation takes effect, the Authority:

• (a) debars the promoter from the project's Authority-website access, lists them as a defaulter with photograph, and informs other State RERAs;
• (b) must facilitate the remaining development work — per Section 8;
• (c) directs the bank holding the project's designated account to freeze it, and later manage de-freezing — again per Section 8; and
• (d) may issue any further directions needed to protect allottees or the public interest.

Note that (b) and (c) are the express textual link to Section 8 — Section 7(4) doesn't itself tell you how the remaining work gets done; it hands that off to Section 8's mechanism.

Section 8 — Obligation of Authority on Lapse or Revocation

Trigger and discretion

On lapse of registration (e.g., extension not renewed) or on revocation under Section 7, the Authority may consult the State Government and take whatever action it thinks fit — getting the remaining work done through a competent authority, the association of allottees, or any other route it determines.

Proviso 1 — stay pending appeal

No order under Section 8 takes effect until the appeal period under the Act has run out — giving the promoter a window to contest before the takeover machinery kicks in.

Proviso 2 — first right of refusal

Specifically on revocation (not mere lapse), the association of allottees gets the first right of refusal to carry out the remaining development. This is the section's real teeth for buyer protection. Buyer can complete the project instead of waiting for Promoter who has already defaulted on project completion or terms.

How the two sections work together