Chandigarh, April 8 -- The Haryana Real Estate Regulatory Authority (HRERA), Gurugram, has issued a show cause notice to realty firm, Trehan Hospitality and Realty Pvt Ltd for contravening the law by developing and selling residential floors without mandatory registration under the Real Estate (Regulation and Development) Act, 2016. Chairman, HRERA, Gurugram, Arun Kumar in a March 30 order said the Authority deems it appropriate to issue a show cause notice to Trehan Hospitality and Realty Pvt Ltd (THRPL) as to why a penalty equivalent to 5% of the total project cost (tentatively assessed at Rs.521.66 crore) should not be imposed upon it for violating Section 3 of the Act regarding the present project. As per Section 3 of the Act, prior registration of a real estate project with Authority is mandatory "The Authority is of the prima facie opinion that the promoter has contravened the provisions of Section 3 of the Act. As per Section 59(1) of the Act, where a promoter contravenes the provisions of Section 3, he shall be liable to a penalty which may extend up to 10% of the estimated cost of the real estate project,'' reads the order. The promoter has been directed to file a detailed reply to the show cause notice within a period of 10 days from the date of issuance of the notice along with all supporting documents. The next date of hearing is on May 4. The action by the real estate regulator followed a suo-motu inquiry in which the Authority found that the developer had constructed and sold 324 residential floors across 81 plots in Sector 71 of Gurugram without obtaining prior registration, in violation of Section 3 of the Act. The order said THRPL purchased 103 plots in One Good Earth project and constructed residential floors on these plots for the purpose of selling without obtaining separate RERA registration for the same in utter violation of Section 3 of the Act. Moreover, it used the registration number 83 of 2021 which pertains only to the DDJAY plotted colony in their advertisements and marketing material for the residential floors, the Authority said. "Complaints have also been received from allottees alleging that 412 low rise floors are being constructed and marketed on these 103 plots without RERA registration. The facts indicated that Trehan Hospitality and Realty has undertaken advertising, marketing and construction of residential floors without registration of the same with this Authority, thereby, violating Section 3(1) of the Act,'' the Authority said. During proceeding on January 19, 2026, the authorised representatives of THRPL, Archit, Nisarg and Saransh along with their counsel, Harshit Batra stated that the project in question is not liable to be registered under the 2016 Act asserting that the project does not fall within the registration framework prescribed under Section 3 of the Act. "The counsel for the THRPL further submitted that the company is an allottee and also subsequent allottee in some cases having purchased the unit from erstwhile allottee. Furthermore, all plots purchased by THRPL were a part of individual transactions, for which individual building plan and occupation certificates were obtained at separate dates and the development stands completed, hence, no registration is required. Further, he submits that it has developed 81 plots into residential floors and it does not fall under the definition of promoter as provided in the Act, 2016 and nor the residential floor developed on the said plot fall under definition of real estate project," as per the order. Rejecting these submissions, the Authority held that the plea of exemption under Section 3(2) based on plot-wise approvals is "wholly unsustainable". It observed that THRPL had undertaken construction for sale, marketed the project under a common name, and sold apartments across multiple plots-bringing it squarely within the ambit of the Act. Earlier, on January 19, the authority had directed THRPL to apply for registration within four weeks. The promoter subsequently filed six applications on February 13, 2026, but deficiency notices were issued on March 6....