GMADA Non-Construction Charges: What Happens When You Buy A Plot And Do Not Build On It ## GMADA नॉन-कंस्ट्रक्शन चार्जेज़: जब आप एक प्लॉट खरीदते हैं और उस पर निर्माण नहीं करते तो क्या होता है ## GMADA Non-Construction Charges: ਜਦੋਂ ਤੁਸੀਂ ਪਲਾਟ ਖਰੀਦਦੇ ਹੋ ਅਤੇ ਉਸ 'ਤੇ ਨਿਰਮਾਣ ਨਹੀਂ ਕਰਦੇ ਤਾਂ ਕੀ ਹੁੰਦਾ ਹੈ

Most people who buy a GMADA plot think of it as land. The authority thinks of it as an obligation.

A plot allotted by GMADA comes with a construction deadline written into the rules. Miss it and a charge starts running, and it keeps running, and at the far end of it the authority has the power to take the plot back. A great deal of land in this district is bought to hold rather than to build on, which means a great many owners are carrying this liability without knowing it is there.

The rule

Under rules made under the Punjab Regional and Town Planning and Development Act, 1995, an allottee has to complete the building as per the approved building plan within three years from the date of possession of the land. If they do not, the Estate Officer may resume the land, the building, or both, under Section 45 of the Act.

GMADA's own published procedure puts it plainly. The allottee has to complete the building within three years, and no extension is allowed beyond that except in exceptional cases, for up to another three years, for reasons recorded in writing, and on payment of an extension fee.

The word is complete, not start. And the sanction at the end is not a fine. It is losing the land.

The clock starts at possession, not at allotment

A 2020 case before the Punjab State Consumer Disputes Redressal Commission shows the arithmetic. The complainant, Bharat Bhushan, had bought the plot from the original allottee. The Letter of Intent was issued on 18 March 2011 and possession was taken on 24 March 2015. The Commission held that the three year construction period ran from possession, to 23 March 2018, and that non-construction charges from April 2018 onward were correctly levied.

Four years passed between the LOI and possession, and none of that counted against the owner. The obligation to build cannot begin until there is a plot to build on.

The LOI in that matter also required GMADA to hand over possession within 30 months, and gave the allottee the right to withdraw with a refund at 10 per cent simple interest if the authority could not. And the Commission held it had jurisdiction to decide whether non-construction charges and extension fees had been validly levied, because they are statutory dues. That gives an owner a forum other than the High Court.

Land pooling plots run on their own policy terms

In April 2025 the Punjab and Haryana High Court quashed a GMADA demand for non-construction charges on a plot allotted under the Land Pooling Scheme. A bench of Justice Sureshwar Thakur and Justice Vikas Suri held the demand arbitrary and contrary to the policy dated 9 September 2008.

That policy gave the initial allottee five years to build. It separately provided a three year period where the plot was transferred to a new owner. GMADA had applied three years from the original allotment, which the court held wrong for both the original allottee and the purchaser.

The facts decided the rest. The original allottee did not build within the five years, which ran out on 27 October 2020. GMADA then accepted non-construction charges from her for six months and permitted the transfer. The court held that having approved the sale, and having failed to act within the five year period, GMADA was estopped from raising a fresh demand against the purchaser, and that applying the three year rule in those circumstances was inequitable.

So the term depends on how the plot was allotted and under which policy. The 2008 policy is not the only pooling policy, and an Aerotropolis plot runs on the terms of its own allotment. In Pockets A to D the question is still some way off: the state only decided in June 2026 to route pending compensation through the Reference Court, which was reported as clearing the way for GMADA to take possession of that land.

What the charge is, and how it grows

The extension fee is levied for each year beyond the construction period, and the rates are notified and revised by the state from time to time.

The structure is escalating rather than flat. The Chandigarh Administration, which adopted a schedule it described as modelled on the Punjab government's policy, charges 2 per cent of the collector rate for the fourth, fifth and sixth years, 3 per cent for the seventh to ninth, 4 per cent for the tenth to twelfth, and 5 per cent for the thirteenth to fifteenth. That is the UT's own schedule rather than GMADA's, but it shows the shape: a percentage of collector rate that rises the longer the plot sits empty.

Because the charge is tied to the collector rate, it rises when collector rates rise. A plot held empty through a period of annual collector rate revisions is accumulating a liability on a base that is itself climbing.

Twenty-five per cent can stop it

The April 2025 ruling also records that the purchaser had begun construction and claimed 25 per cent completion, which under the policy governing that plot exempted her from further non-construction charges.

So under that policy the obligation was not binary. An owner did not have to finish the house to stop the charge; reaching a quarter of the construction was the threshold. Whether other allotment terms carry a similar threshold decides how much an owner who cannot yet build out keeps paying.

It travels with the plot

Non-construction liability attaches to the plot, which means it passes to whoever holds it.

Both cases above involve purchasers rather than original allottees. In the High Court case, the purchaser took the benefit of charges already paid and of GMADA's approval of the transfer. The same mechanism works the other way: a buyer who takes a plot with charges outstanding takes the charges too. The No Due Certificate is where an unpaid non-construction liability surfaces before a transfer can complete.

When the plot was never handed over

A case listed before the High Court in September 2026 shows how far a demand can drift from the rule.

A plot in Sector 69 was paid for in full in 1995. Possession was never delivered to the purchaser. After a Revisional Authority directed in September 2024 that the plot be transferred to him, GMADA's Estate Officer sought non-construction charges of ₹1.66 crore.

His counsel argued the charges could not be sought because the Revisional Authority had already decided the purchaser's right to the transfer, because the 1997 policy relied on concerned penalty for delayed payment rather than non-construction, and because the Estate Officer had no authority to issue the notice once the matter had been decided.

The possession rule points the same way. If the construction clock runs from possession, as the 2020 ruling held, a plot whose possession was never handed over has had no clock running at all. The matter is before the court and has not been decided.

What decides the liability on any given plot

The possession date starts the clock, not the allotment and not the purchase, and it is recorded on the possession certificate.

The allotment route and its policy set the term. Three years from possession for a regular allotment; for a pooling plot, whatever its policy says, which under the 2008 policy meant five years for the original allottee and three for a transferee.

Charges already paid and charges outstanding both pass with the plot, and the No Due Certificate is where either shows up.

And a plot bought years after allotment may already be well into its extension period, carrying charges on a rising collector rate, with resumption as the backstop.

A GMADA plot held empty is not a neutral asset sitting still. It is a clock, set running on the day possession changed hands, and whoever holds the plot when it runs out is the one it runs out on.

None of the above is legal advice. Rates are notified and revised by the state, and the position on any particular plot turns on its allotment terms and possession date.

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Sources

- The procedure followed in the decision making process, Greater Mohali Area Development Authority, for the three year construction period, the exceptional extension for up to a further three years for recorded reasons, and the extension fee
- Grant of extension in construction period, rules under the Punjab Regional and Town Planning and Development Act, 1995, Government of Punjab notification dated 9 June 2010, for the requirement to complete the building within three years from possession, resumption under Section 45, and extension on payment of a fee determined by the state
- Bharat Bhushan vs Greater Mohali Area Development Authority, Punjab State Consumer Disputes Redressal Commission, 18 June 2020, on the three year period running from possession, the 30 month possession clause in the Letter of Intent, and the Commission's jurisdiction over non-construction charges as statutory dues
- HC quashes GMADA's non-construction charge demand, calls it arbitrary, misapplied, Saurabh Malik, The Tribune, 17 April 2025, on the five year and three year periods under the 9 September 2008 land pooling policy, the estoppel finding, the transfer after six months of charges, and the 25 per cent completion exemption
- Chandigarh Administration rationalises extension fee for vacant plots, The Tribune, on the escalating schedule as a percentage of collector rate, adopted on the pattern of the Punjab government's policy
- HC slams GMADA's atrocious condition barring plot buyer from legal action, Saurabh Malik, The Tribune, 7 September 2026, on the Sector 69 plot, the ₹1.66 crore demand and the grounds argued
- Punjab clears way for Aerotropolis compensation, land possession, The Tribune, 22 June 2026, on the Reference Court decision and possession in Pockets A to D