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The Odisha Real Estate Appellate Tribunal (OREAT) has upheld a penalty of INR 3 lakh imposed on a developer for handing over flats in a housing project in Gadakana, Bhubaneswar, without obtaining mandatory approvals, including an occupancy certificate. The tribunal dismissed the promoter's appeal in an order issued earlier this month, affirming an earlier decision by the Odisha Real Estate Regulatory Authority (ORERA). The regulatory authority had penalised the promoter for violating provisions of the Real Estate (Regulation and Development) Act, 2016, which requires project registration before marketing or sale. The developer had argued that the project was completed before the RERA framework came into force and therefore did not require registration. However, the tribunal found inconsistencies in the completion certificate submitted and concluded that the promoter had transferred possession without fulfilling statutory requirements.
The Odisha Real Estate Appellate Tribunal (OREAT) earlier this month dismissed an appeal filed by a real estate promoter and upheld a penalty of INR 3 lakh imposed for handing over flats in a residential project in Gadakana, Bhubaneswar, without obtaining the mandatory occupancy certificate and regulatory approvals. The order, issued on March 6, confirmed the decision taken earlier by the Odisha Real Estate Regulatory Authority (ORERA) in March 2024 after it found violations of statutory provisions governing real estate projects. Advertisement
The regulatory authority had penalised the developer for breaching Section 3(1) of the Real Estate (Regulation and Development) Act, 2016, which requires developers to register eligible projects before advertising, marketing or selling units. ORERA also found that possession had been handed over to homebuyers without securing the mandatory occupancy certificate required under the Bhubaneswar Development Authority's planning and building regulations.
In its appeal before the tribunal, the promoter argued that the housing project had been completed before the RERA framework came into force on May 1, 2017. The developer relied on a completion certificate dated March 31, 2017, and contended that the project therefore did not require registration under the regulatory regime.
The tribunal, however, examined the documentation submitted by the promoter and found that the completion certificate did not comply with the planning authority's standards. According to the tribunal's observations, the document lacked several mandatory attachments that are normally required for such approvals, including fire safety clearance, service connection documentation and sanctioned building plans. The absence of these supporting documents raised doubts about the validity of the certificate produced by the developer.
The tribunal also noted that the promoter had been given multiple opportunities by ORERA to respond to the regulatory proceedings. Records presented before the appellate authority indicated that the developer was issued notices between October 2023 and February 2024 to submit a written explanation but failed to provide a formal response during the hearings.
Rejecting the promoter's argument that the proceedings violated principles of natural justice, the tribunal observed that the developer had been provided adequate opportunity to present its case. Since those opportunities were not utilised, ORERA was justified in proceeding with the matter and issuing its order.
After reviewing the submissions and regulatory provisions, the appellate body concluded that there was no illegality in the decision of the state regulator. The tribunal therefore dismissed the appeal, describing it as lacking merit, and directed the developer to deposit the penalty amount with ORERA. Upon payment of the penalty, the promoter will be eligible to receive a refund of the statutory deposit made while filing the appeal before the tribunal.
The ruling reiterates the requirement for developers to obtain mandatory approvals and regulatory registration before handing over possession of housing units, reinforcing compliance with the provisions of the RERA framework in Odisha.
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