HP RERA slaps Rs 70 lakh penalty on Chester Hills projects over financial irregularities
Shimla, April 19,
The Himachal Pradesh Real Estate Regulatory Authority (HP RERA) has taken a significant regulatory action on the most highlighted Chestor hills project. As per twin orders issued by the regulatory authority impacting homebuyers and real estate compliance in Himachal Pradesh, has imposed an interim penalty of Rs 70 lakh on the promoters of Chester Hills-2 and Chester Hills-4 projects in Solan district, citing serious financial irregularities and violations of statutory provisions under the Real Estate (Regulation and Development) Act, 2016.
Separate orders dated March 23, 2026, passed in suo motu proceedings, impose a penalty of Rs 35 lakh each on the two projects for violation of Section 4(2)(l)(D), which mandates proper maintenance of project-specific accounts and financial discipline.
The Authority, relying on audit findings, recorded that “serious financial irregularities such as inter-mixing of funds, non-maintenance of a separate project-specific account, absence of proper project-wise accounting, and non-availability of audited financial statements” were established on record, warranting action under Section 60 of the Act.
Highlighting the gravity of non-compliance, HP RERA observed that the promoter failed to maintain transparency in fund utilisation, particularly the mandatory requirement of depositing 70% of collections from allottees into a dedicated project account. The Authority noted that “such compliance is fundamental and non-delegable responsibility of the promoter,” rejecting any plea of ignorance.
The audit reports, referenced extensively in both orders, revealed that project funds were routed through non-RERA accounts, expenditures were not verifiable, and there was a lack of credible financial documentation.
In the Chester Hills-4 case, the Authority recorded that “books of account are maintained at Namajra, Chandigarh, and no accounts or records are maintained at the constructed site,” raising further compliance concerns.
Similarly, in Chester Hills-2, the Authority found that post cancellation of the Joint Development Agreement (JDA), “all receipts and payments were routed through a non-RERA bank account,” with significant portions of funds remaining unverified due to missing records.
Beyond financial violations, the Authority has kept the door open for further penal action. The orders explicitly state that proceedings will continue, and additional penalties may be imposed for violations of Section 11 (promoter obligations), Section 14 (deviation from approved plans), and Section 17 (handover without completion certificate), subject to reports from competent authorities.
The Authority has also made it clear that the JDA cancellation in both projects “has neither been accepted nor approved and remains under examination,” effectively putting any project modifications or updates on hold until full compliance is established.
Directing corrective action, HP RERA has ordered the promoters to deposit the penalty within 30 days into the designated Authority fund and submit detailed, chartered accountant-certified disclosures regarding fund utilisation, project status, and allottee-wise collections.
The matter will next be heard on June 5, 2026, as the Authority continues its suo motu scrutiny into what it describes as a case involving “serious violations” with potential wider implications for transparency and accountability in the state’s real estate sector.
About the Author
The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.
