Section 40 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 40 answers the question that every successful complainant asks next: the order is in my favour, so how do I actually get paid or get the direction obeyed? Sub-section (1) treats unpaid interest, penalty or compensation as a sum recoverable as arrears of land revenue. Sub-section (2) says orders and directions that tell a person to do or not do something are to be enforced in the prescribed manner. If you hold an order you cannot collect, our legal dispute resolution team can map the route.
If a promoter, an allottee or a real estate agent fails to pay any interest, penalty or compensation imposed on him by the adjudicating officer, the Regulatory Authority or the "Appellate Authority", it is recoverable as an arrears of land revenue, in such manner as may be prescribed (40(1)). Orders and directions to do or refrain from doing an act are enforced in such manner as may be prescribed (40(2)). The Act itself does not describe the steps; the State rules do.
Section 40 at a glance
| Sub-section | Subject | What it provides |
|---|---|---|
| 40(1) | Money orders | Unpaid interest, penalty or compensation is recoverable from the promoter, allottee or real estate agent as an arrears of land revenue, in the prescribed manner |
| 40(2) | Non-money orders | Failure to comply with an order or direction of the adjudicating officer, the Authority or the Appellate Tribunal is enforced in the prescribed manner |
Section 40(1): money that has been ordered
The sub-section applies where interest, penalty or compensation has been "imposed" on a promoter, an allottee or a real estate agent "by the adjudicating officer or the Regulatory Authority or the Appellate Authority, as the case may be, under this Act or the rules and regulations made thereunder". Three features matter.
- Three kinds of money, three kinds of person. Interest and compensation are usually what an allottee wins against a promoter under sections such as 18; a penalty is what the Authority imposes under Chapter VIII. The section is not one-way. An allottee who is ordered to pay interest on delayed instalments, or an agent who is ordered to pay a penalty, is covered in the same words.
- Three decision-makers. The adjudicating officer, the Authority and the "Appellate Authority" are named. The Act otherwise speaks of the Appellate Tribunal; "Appellate Authority" appears only here, and we read it as the Appellate Tribunal. This is a drafting slip in the text, flagged rather than corrected.
- Recovery as arrears of land revenue. The sum is to be recovered "as an arrears of land revenue", "in such manner as may be prescribed". The words about the manner of recovery are not filled in by the Act. Section 84(2)(r) confirms that the rules may provide for "the manner of recovery of interest, penalty and compensation under sub-section (1) of section 40". Which officer issues the recovery certificate, and on what timeline, therefore depends on the rules made by each State or Union territory, and it differs from State to State.
If you hold a money order in your favour, the practical step is to read your State's rules on recovery and the order itself, and to ask the Authority or the adjudicating officer to forward the matter for recovery. The Act does not say who must apply or within what time.
Section 40(2): orders and directions to do or not do an act
Sub-section (2) is wider in one respect: it speaks of "any person", not only a promoter, allottee or agent. Where "any adjudicating officer or the Regulatory Authority or the Appellate Tribunal" issues an order, or directs any person "to do any act, or refrain from doing any act, which it is empowered to do under this Act or the rules or regulations made thereunder", and the person fails to comply, the order or direction "shall be enforced, in such manner as may be prescribed".
Two points follow from the words.
- The order must be one that the body was empowered to make. An order outside the body's powers is not made enforceable by this sub-section.
- The manner of enforcement is, again, left to the rules. Section 84(2)(s) lets the rules provide for "the manner of implementation of the order, direction or decisions of the adjudicating officer, the Authority or the Appellate Tribunal under sub-section (2) of section 40".
Orders of the Appellate Tribunal also have their own route. Section 57 makes every Tribunal order executable by the Tribunal as a decree of a civil court. See our article on sections 56 and 57. Section 40(2) and section 57 sit side by side; the text does not say which prevails, so a person enforcing a Tribunal order should consider both in the light of the State rules.
Non-compliance has its own consequences
Section 40 is about collecting and enforcing. Separately, Chapter VIII makes failure to comply with orders a ground for a further penalty or, in the case of Tribunal orders, imprisonment. For a promoter, sections 63 and 64 apply; see our article on sections 63 and 64. So a defaulting promoter can face recovery under section 40 and a further penalty for disobedience, as the text of each section provides.
What the text does not say
- It does not give a time limit for starting recovery.
- It does not say whether the sum carries further interest after the order.
- It does not name the revenue authority, the form of the recovery request or any fee.
- It does not say whether recovery can be stayed while an appeal is pending. For a promoter's appeal, section 43(5) requires a deposit; see our article on section 43.
For each of these, look at your State's rules and the Authority's regulations.
Example. The Authority orders Skyline Homes Pvt Ltd to refund Rs 20 lakh with interest to an allottee, Mr Rao, within 60 days. Skyline pays nothing. Mr Rao's money order falls within 40(1): the unpaid sum can be recovered as arrears of land revenue in the manner the State rules prescribe. If the order had also directed Skyline to hand over a document, that direction would be enforced under 40(2), again in the prescribed manner.
Need help with recovering a RERA order?
A favourable order is only the midpoint if the other side does not pay. Our team can read the order, the State recovery rules and the next step with you and prepare the application. For a stalled order, speak to us about dispute resolution support before the position hardens.
Key takeaways
- Unpaid interest, penalty or compensation is recoverable as an arrears of land revenue (40(1)).
- It covers promoters, allottees and real estate agents alike.
- Orders to do or refrain from an act are enforced as prescribed (40(2)).
- The manner of both is fixed by State rules; the Act gives no steps or time limit.
- "Appellate Authority" in 40(1) is a drafting slip for the Appellate Tribunal.
Read next
- Sections 63 and 64: promoter not complying with Authority or Tribunal orders
- Section 71: adjudicating officer and compensation
- Penalties Under RERA: Promoter, Agent, Allottee
- RERA Complaint Process: How to File Online
Disclaimer: Based on the Real Estate (Regulation and Development) Act, 2016 as enacted, as consulted on 1 October 2026. Rules, forms, fees and procedures are made by each State and Union territory and its Real Estate Regulatory Authority and differ from State to State. This article is general information, not legal advice; check the official text and your State's rules before acting.