Dharamshala, April 20 -- The Himachal Pradesh Real Estate Regulatory Authority (HP RERA) has imposed a penalty of Rs.70 lakh on the promoters of Chester Hills-2 and Chester Hills-4 projects in Solan district of Himachal Pradesh for financial "irregularities". The Chester Hills project is embroiled in a controversy with allegations of a multi-crore "land scam" involving 275 bighas of land and accusations of "benami" dealings and violations of Section 118 of the HP Tenancy and Land Reforms Act. A fresh probe into the matter was ordered by the state government earlier this month. In the two suo motu orders dated March 23, 2026, the authority levied an interim penalty of Rs.35 lakh on each project for violation of Section 4(2)(l)(D) of the RERA Act 2016, which mandates that 70% of funds received from allottees be kept in a separate dedicated bank account and utilised strictly for construction and land costs. A copy of the orders was released on Sunday. The orders state that the proceedings originated from multiple complaints received by the HP RERA regarding the Chester Hills residential project being developed by NG Estates at Mauza Ber Khas and Lower Bazar, Solan, and the adjoining Chester Hills-2 and Chester Hills-4 projects. The HP RERA, citing audit findings, recorded that "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. In the order with respect to Chester Hills-4, the RERA states that from the audit report, the Authority observed legal and financial irregularities in the Phase-4 project. According to the order, the project funds were not kept in a RERA-designated account. Proper financial records, audited statements and project-wise accounting were not maintained, it stated. "There are also signs of fund diversion, loans to related parties and non-disclosure of project income. Site inspection showed missing mandatory disclosures and stalled construction. Overall, substantial non-compliance with RERA, lack of transparency and failure to provide required documentation have been noted, adversely affecting allottees' interests," it states. 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. The Authority has also clarified 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. Officials said that suo motu proceedings are continuing. Promoters could be further penalised for violation of Sections 11 (for various obligations), 14 (for deviation from approved drawings) and 17 (for handing over the possession before obtaining completion certificate) after receipt of the reports from officials concerned. The matter will next be heard on June 5, 2026. On Friday, the Communist Party of India (Marxist) demanded judicial probe into the Chester Hill case even as Himachal Pradesh revenue minister Jagat Singh Negi said a departmental probe was underway....