Beyond Revocation: The Role of Section 8 of RERA in Facilitating Project Rehabilitation via the Association of Allottees
Introduction
Section 8 of the Real Estate (Regulation and Development) Act, 2016 (“RERA”) prescribes the procedure to be followed after the lapse or revocation of a project’s registration. Recent orders from the Uttar Pradesh, Maharashtra and Telangana Authorities[1] have clarified the scope of this provision, particularly by establishing the association of allottees’ first right of refusal as a major limitation on the Authority’s discretion. This article analyses that principle and identifies two regulatory deficiencies: the absence of a prescribed time limit for government consultation under Section 8, and the lack of a requirement to disclose the source of completion funding.
Statutory Framework
Section 8 succeeds Section 7 of RERA, which authorises the Authority to revoke a project’s registration in cases of persistent default. Section 8 addresses the subsequent position of allottees once registration has lapsed or been revoked. In force since 01 May 2017, the provision states:
“Upon lapse of the registration or on revocation of the registration under this Act, the Authority, may consult the appropriate Government to take such action as it may deem fit including the carrying out of the remaining development works by competent authority or by the association of allottees or in any other manner, as may be determined by the Authority:
Provided that no direction, decision or order of the Authority under this section shall take effect until the expiry of the period of appeal provided under the provisions of this Act:
Provided further that in case of revocation of registration of a project under this Act, the association of allottees shall have the first right of refusal for carrying out of the remaining development works.”
Two safeguards constrain the wide discretion embedded in Section 8. The first proviso stays the effect of any direction until the expiry of the period of appeal under Section 44 of RERA. The second and more significant safeguard grants the association of allottees a first right of refusal when registration is revoked.
Section 8 in Practice: Regulatory Approaches and Key Orders
Before examining the three orders, it is noteworthy that regulators across India have instituted mechanisms to revive projects with lapsed or revoked registrations. For instance, UP-RERA operates a rehabilitation programme overseen by a Project Advisory and Monitoring Committee, which has identified 76 lapsed projects for revival.[2]
Kalypso Court
By order dated 29 July 2020, UP-RERA approved a rehabilitation plan under Section 8 of RERA for four incomplete towers (7, 8, 11 and 12), comprising 304 units of the Wish Town project at Noida, promoted by Jaiprakash Associates Limited, whose registration had lapsed.[3] Instead of replacing the promoter of the project, it authorised the existing promoter to complete the works, subject to the consent of the allottees’ association.
DSK Sadaphuli
This is a case where the promoter was replaced. MahaRERA revoked the two registrations of the 279-flat Talegaon township by common order dated 22 October 2019, after the promoter’s arrest stalled a near-complete project.[4] In consultation with the association of allottees, mortgagee Tata Capital Housing Finance Ltd. and a conciliation panel, M/s G.S. Associates was approved as the incoming developer through a well-documented capital structure. MahaRERA, through its final order dated 15 July 2022, directed a change of promoter under Section 15 of RERA within 30 days.
Jaya Platinum
In this case, TG RERA revoked the registration of the 60-unit Bowrampet project on 30 April 2024 and, following the Government of Telangana’s approval in November 2024, invoked Section 8 of RERA to let the JP Welfare Association, which was backed by over 90% of allottees, act as promoter for the limited purpose of completing the project.[5] TG RERA, in its Common Final Order dated 09 January 2026, noted that the project was issued an occupancy certificate on 05 January 2026 and closed the proceedings.
Analysis
The central issue raised in these orders concerns the scope of the “any other manner” limb of Section 8 of RERA. In DSK Sadaphuli and Jaya Platinum, both involving outright revocations, the second proviso strictly limited discretion: a third party could join only with the association’s consent. G.S. Associates obtained promoter status through the route available under Section 15 of RERA. At the same time, JP Welfare Association could act only “for the limited purpose of completion”, which appeared to exempt it from the full gamut of statutory obligations of a promoter under Section 2(zk). In contrast, in Kalypso Court, the project’s registration had lapsed and had not been revoked. As a result, the association of allottees’ first right of refusal did not apply, and UP-RERA’s consent requirement reflected its own discretion rather than a statutory right.
The courts have started interpreting Section 8 of RERA in a similar fashion. In the case of Hiren Sureshbhai Patel v. State of Gujarat,[6] the Gujarat High Court noted the distinction between Section 7 and Section 8 of RERA. The Court viewed Section 7 as the authority to revoke and Section 8 as the distinct responsibility to ensure completion when registration has either lapsed or has been revoked. Meanwhile, in Rajan Chandiramani v. Swadhinta Builders LLP,[7] the Bombay High Court took it a step further. The Court stated that revocation is not a “panacea” and does not eliminate other enforcement options available under the Act, such as the direct execution of a Tribunal’s completion order. Therefore, Section 8 is recognised as just one tool in a wider enforcement strategy, rather than the only way to revive a stalled project.
However, the practice has not yet worked out how Section 8 operates procedurally, and two gaps stand out. The first gap concerns timing. Section 8 requires that the appropriate Government be consulted but does not specify a time frame within which this must occur. In Jaya Platinum, the consultation lasted nearly seven months, and the allottees were left without a promoter long after the registration was cancelled. A fixed time period with deemed approval on expiry would replace this open-ended delay.
The other significant concern remains the entitlement of a third-party developer to resuscitate distressed real estate projects under Section 8. In most such projects, addressing existing liabilities and mobilising funds for project completion would be beyond the ability of the association of allottees, existing promoters or even the appropriate Government. Distressed projects require capital infusion, which the provision or orders interpreting it have failed to adequately address.
Conclusion
The three orders discussed above show that Section 8 of RERA has proved workable. However, two features of the emerging practice merit early attention. The government consultation contemplated by Section 8 is not time-limited, and a fixed period with deemed approval on expiry would better serve allottees whose investments have long been locked in projects. Equally, requiring Section 8 orders to record the source and adequacy of completion funding and enabling third-party developers to step in by making capital investments in distressed projects would materially strengthen the provision. The Ministry of Housing and Urban Affairs and the State Real Estate Regulatory Authorities are well placed to consider these measures as Section 8 matures from a residual provision into a stable mechanism for project revival.
[1] Authority refers to Real Estate Regulatory Authority as defined under Section 2(i) of RERA.
[2] Uttar Pradesh Real Estate Regulatory Authority, Press Release, UPRERA reviews the progress of 76 projects with their promoters to facilitate their completion, dated 09 July 2021.
[3] UP-RERA, Order No. 450/U.P. RERA/Project/Rehabilitation/NCR/2020-21, Rehabilitation of Jaypee Kalypso Court (Phase II), Sector 128, Noida (Project Registration No. UPRERAPRJ4695), dated 29 July 2020.
[4] MahaRERA, common order dated 15 July 2022, Complaint Nos. CC005000000023275 and CC005000000023293, Pradeep Wandrekar v. DSK Worldman Projects Ltd. and D.S. Kulkarni & Company.
[5] TG RERA, Common Final Order dated 09 January 2026, Complaint No. 1269 of 2023 and batch, In re M/s Jayathri Infrastructures India Pvt. Ltd. (“Jaya Platinum Project”), Project Registration No. P02200003688.
[6] Hiren Sureshbhai Patel v. State of Gujarat, Special Civil Application No. 11993 of 2019.
[7] Rajan Chandiramani v. Swadhinta Builders LLP, 2026 SCC OnLine Bom 5496.