Builder Arrested Over Unpaid Consumer Awards: What Section 72 Lets a Commission Do
The Karnataka High Court on October 12, 2026 dealt with a developer held in custody by the Dharwad consumer commission for not paying final consumer awards, holding that Section 72 imprisonment of up to three years needs an enquiry and directing the commission to decide bail. What buyers with unpaid consumer awards can do.
On July 12, 2026, a developer in north Karnataka was arrested in proceedings before a consumer commission. He had lost consumer complaints filed against him, the awards had become final, and the complainants had filed execution petitions to recover what they were owed. The Dharwad District Consumer Disputes Redressal Commission found he was "evading process of the commission by absconding" and kept him in custody. On October 12, 2026, the Karnataka High Court reviewed those orders and set out what the law allows a commission to do to a builder who does not pay.
The judgment, in M/s Pruthvi Builder and Developers v. Mr Solomon and connected petitions, Writ Petition No. 106629 of 2026 and others, was delivered by Justice M.G.S. Kamal at the Dharwad Bench. The case comes from Dharwad, but the law it applies, Section 72 of the Consumer Protection Act, 2019, is the same for Bengaluru buyers holding consumer commission awards against builders.
The short answer. As quoted in the judgment, Section 72(1) makes failure to comply with a consumer commission's order punishable with imprisonment for a term which "shall not be less than one month, but which may extend to three years", or a fine of Rs 25,000 to Rs 1 lakh, or both, and the commissions try such offences summarily with the powers of a Judicial Magistrate of first class. The court held that imprisonment of up to three years "can be imposed only after conducting an enquiry" under Section 72(3), and directed the Commission to decide the developer's bail application. The trade-off: buyers have a criminal enforcement tool with real teeth, but it runs through a process that can be slowed by the builder's own conduct.
What happened in the Dharwad case?
According to the judgment, the complainants had filed complaints against the developer under Section 12 of the Consumer Protection Act, which "came to be allowed by passing awards as sought for". The awards "have attained finality". The complainants then filed execution petitions, and the orders challenged in the High Court were passed by the District Commission "in exercise of its powers under Section 72 of the Act."
The judgment records that the petitioner was arrested on 12.07.2026 and remanded to custody. The Commission, on the records and a police report, opined that he was evading its process by absconding and not being available, and that his conduct had made it difficult to conduct the Section 72 enquiry. It noted that in an earlier writ petition, W.P. No. 104623 of 2025, the High Court had "shown indulgence" on the developer's undertaking to comply with the awards. The Commission said he had neither moved a bail application nor made the payment undertaken, and directed that he be kept in custody till 27.07.2026.
What does Section 72 actually say?
The court reproduced the provision. Section 72(1) states: "Whoever fails to comply with any order made by the District Commission or the State Commission or the National Commission" shall be punishable with imprisonment for a term "which shall not be less than one month, but which may extend to three years, or with fine, which shall not be less than twenty-five thousand rupees, but which may extend to one lakh rupees, or with both."
Section 72(2) gives the commissions "the power of a Judicial Magistrate of first class for the trial of offences" under sub-section (1). Section 72(3) provides that such offences "shall be tried summarily" by the commission concerned.
| Element | What Section 72 provides, as quoted | What it means for a buyer |
|---|---|---|
| Offence | Failing to comply with any order of a consumer commission | An unpaid final award can trigger criminal proceedings |
| Minimum imprisonment | Not less than one month | A real deterrent, not a token penalty |
| Maximum imprisonment | Up to three years | Only after an enquiry, according to this judgment |
| Fine | Rs 25,000 to Rs 1 lakh, or both | A fine is separate from the award amount owed |
| Who tries it | The commission itself, summarily, as a Judicial Magistrate | Buyers pursue it before the same commission |
Why didn't the High Court simply release the developer?
The court did not quash the custody orders. It said: "The punishment of imprisonment for a term of up to three years as contemplated under sub-Section(1) of Section 72 of the Act can be imposed only after conducting an enquiry as provided under sub-section (3)". It noted that, admittedly, no such enquiry had been conducted, and that the developer's "conduct" in "not making himself available has caused inconvenience to the Commission, even for recording his plea".
It also noted that the developer had not moved a bail application earlier and had not made any payment, so there was no order either accepting or rejecting his plea for bail. When the court asked, his counsel said a bail application was moved on 16.09.2026 and had not been entertained. The court therefore directed: "The District Commission shall proceed to consider the bail application stated to have been filed by the petitioner on 16.09.2026" and pass orders in accordance with law. It then disposed of the petitions.
What did each side argue?
The developer's counsel said he had "settled 37 cases" and, in the pending cases, paid "approximately Rs.65,00,000". He offered to earmark part of land he had agreed to develop into a residential layout, equal in value to the amounts due, and argued that his release was needed to negotiate with the landowners. He also argued that continued incarceration without considering bail would defeat his entitlement to an enquiry under Section 72.
Counsel for the complainants, "in unison", said the Commission had taken note that the developer "has not complied with any of his undertaking given thus far" and had "successfully evaded and protracted the proceedings without complying with the awards passed." They also pointed out that he could appeal the Commission's orders under Section 41 of the Act. The court left the parties "at liberty to explore the possibility of amicable resolution".
Can the builder challenge the commission's orders elsewhere?
Counsel for the complainants told the court that the developer "is also entitled to file an appeal against the impugned orders under Section 41 of the Act", which is the appeal route from a District Commission. The High Court did not decide the merits of the custody orders. In its final paragraph, it said the petitioner "is at liberty to seek such relief as permissible in law" and that this "shall be considered by the Commission in accordance with law."
The history matters too. The judgment records that the High Court had earlier shown "indulgence" in W.P. No. 104623 of 2025, on the developer's undertaking to comply with the awards. The District Commission relied on the fact that the payment undertaken had not been made. For buyers, an undertaking recorded by a court is useful evidence: if it is not honoured, it strengthens the case for strict enforcement in the next round.
What does this mean for Bengaluru buyers holding consumer awards?
Winning a consumer case against a builder is the first step; collecting is the second. This case shows that a buyer whose award is final can pursue execution before the same commission, and that Section 72 lets the commission act as a criminal court against a builder who does not comply. It also shows that the process has stages, and that the full three-year penalty depends on an enquiry being completed.
Buyers should be cautious about settlement offers made in such proceedings. Here, the developer proposed earmarking land in a planned layout rather than paying cash. Whether any such proposal is acceptable is for each buyer to decide with advice; land in a project that is still being negotiated with landowners is not the same as money in hand. PropNewz has explained the parallel enforcement route for RERA orders in this week's report on K-RERA refund recovery, and a recent consumer ruling on delay compensation in our NCDRC report.
A seven-step checklist for buyers with unpaid consumer awards:
- Obtain a certified copy of the final award and confirm no appeal is pending against it.
- File an execution petition before the same commission if the builder does not pay.
- Ask the commission to proceed under Section 72 if the builder ignores the award.
- Attend every hearing, because the enquiry under Section 72(3) needs the process to move.
- Record every partial payment and every undertaking the builder gives, with dates.
- Evaluate any offer of land or flats instead of money with independent legal and valuation advice.
- Coordinate with other buyers who hold awards against the same builder.
Frequently asked questions
What does Section 72 of the Consumer Protection Act say about ignoring a commission's order?
As quoted by the Karnataka High Court, Section 72(1) says whoever fails to comply with an order of the District, State or National Commission is punishable with imprisonment of at least one month and up to three years, or a fine of Rs 25,000 to Rs 1 lakh, or both. The commissions try such offences summarily.
What did the Karnataka High Court decide in the Pruthvi Builder and Developers petitions?
On October 12, 2026, Justice M.G.S. Kamal disposed of the developer's writ petitions against Dharwad District Commission orders keeping him in custody. The court directed the Commission to consider his bail application of 16.09.2026 and pass orders in accordance with law, and left the parties free to explore a settlement.
Can a builder be jailed for three years without an enquiry?
No, according to this order. The court said imprisonment of up to three years under Section 72(1) can be imposed only after the enquiry provided under Section 72(3), and noted that no such enquiry had been conducted in this case, partly because the developer had not made himself available.
What should a buyer with an unpaid consumer commission award do?
Keep a certified copy of the final award, file an execution petition before the same commission if the builder does not pay, attend every hearing, and keep records of any partial payments or undertakings. Consider any settlement proposal carefully, preferably with legal advice, before accepting land or property instead of money.
This article summarises a court judgment for general information and is not legal advice.
Last updated 2026-11-07. PropNewz Team.
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