The regulator fined ₹35 lakh each on Chester Hills-2 and Chester Hills-4, holding the promoter M/s Chester Hills and landowner Hansraj Thakur responsible for non-compliance with the Real Estate (Regulation and Development) Act, 2016.

This action followed suo motu proceedings initiated by RERA, which uncovered lapses such as failure to maintain mandatory project-specific bank accounts and improper management of funds collected from allottees. Audits by RERA-approved chartered accountants revealed that nearly ₹19.95 crore in receipts for Chester Hills-2 were routed through a common bank account rather than the designated RERA account after cancellation of a Joint Development Agreement (JDA) in 2024, with ₹6.50 crore of receipts unverifiable due to missing records and a general lack of project-wise financial transparency.

For Chester Hills-4, the audit identified diversion of funds, including loans amounting to ₹1.23 crore extended to a related entity. The promoter did not provide updated audited financial statements or details of construction expenditure. Although ₹6.74 crore was collected from 44 allottees for this project, total collections across linked projects amounted to ₹29.38 crore.

Site inspections revealed slow or minimal construction progress. Chester Hills-2 was approximately 36 per cent complete with many components pending, whereas Chester Hills-4 showed negligible progress and lacked the mandatory RERA display boards.

The Authority also highlighted unauthorised revisions in building plans without prior approval and the absence of consent from two-thirds of allottees as required by law.

Reports from local revenue authorities, including the Sub-Divisional Magistrate (SDM) and the SDO (Civil), Solan, suggested the projects may be structured as “benami” or “colourable devices” to circumvent Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, which restricts land purchases by non-agriculturists. Investigations indicated the land remained in the landowner’s name, but operational and financial control rested with non-agriculturist promoters. The acquisition of nearly 275 bighas of land by the landowner's family between 2015 and 2023 was deemed “highly improbable” considering declared income levels, leading to calls for further Income Tax and vigilance agency investigations.

HP RERA has ordered the promoters to pay the penalty within 30 days and has frozen updates to the project registration records pending further verification. The Authority has not accepted the cancellation of the Joint Development Agreement, stating the matter remains under review.

Additional action may follow based on reports awaited from the Deputy Commissioner, Solan, particularly on land ownership compliance and other statutory violations.

The Authority emphasised that ensuring transparency, statutory compliance, and protecting homebuyers' interests are its “fundamental and most vital responsibility,” noting that proceedings are ongoing and further penalties may be imposed.