The Odisha Real Estate Appellate Tribunal (OREAT) has ruled that the Odisha Real Estate Regulatory Authority (ORERA) cannot retain the entire registration fee paid by developers when a project registration application is rejected or withdrawn after the prescribed period. The tribunal held that such a practice is arbitrary, has no legal basis and amounts to unjust enrichment by the regulator. 
The order was passed while hearing two separate appeals filed by developers of residential projects in Bhubaneswar. In both cases, ORERA had refused to refund the registration fees after rejecting the applications or denying refund requests made beyond the stipulated withdrawal period. OREAT set aside ORERA's decisions and directed the authority to refund the fees after deducting 12% towards administrative expenses. The total registration fee involved in the two appeals exceeded INR 24 lakh. 
In the first matter, the developer had paid INR 16.14 lakh as the registration fee through ORERA's earlier online portal. After ORERA introduced its upgraded ORERA 2.0 portal, the authority asked the developer to submit a fresh application. The developer subsequently requested ORERA to either migrate the existing application to the new portal or refund the registration fee already paid. However, ORERA rejected the request, stating that its regulations allowed refunds only if an application was withdrawn within 30 days of submission. 
The second appeal involved a developer who had deposited INR 8.60 lakh for registering a residential project. The application was later rejected because the approved building plans contained discrepancies. Following the rejection, the developer sought either a refund or adjustment of the registration fee for a fresh application. ORERA refused the request, maintaining that neither the Real Estate (Regulation and Development) Act nor the Odisha RERA Rules contained any provision allowing such refunds after an application had been rejected. 
Before the tribunal, ORERA argued that the applicable rules permit only a partial refund after deducting a processing fee when a promoter voluntarily withdraws an application within 30 days. Since both developers had approached the authority after this period or after their applications had already been rejected, ORERA maintained that it had no legal authority to refund or adjust the registration fees. 
OREAT disagreed with this interpretation. The tribunal observed that merely because the law does not specifically provide for refunds in cases of rejection or delayed withdrawal does not mean the regulator has the authority to retain the entire amount. It noted that statutory authorities can exercise only those powers that are expressly granted under law and cannot assume additional powers in the absence of a specific provision. 
The tribunal further held that registration fees collected under the Real Estate (Regulation and Development) Act are meant to regulate the registration process and recover administrative costs. They are not intended to serve as a penalty or punishment for developers. Therefore, retaining the entire fee despite not granting registration was found to be disproportionate and contrary to the principles of fairness. 
While allowing both appeals, OREAT directed ORERA to refund the registration fees after deducting 12% towards administrative expenses. The tribunal considered this deduction reasonable to cover the authority's processing costs while ensuring that developers were not subjected to an excessive financial burden. 
Apart from granting relief in the two cases, OREAT also recommended that ORERA amend its regulations and establish a clear, transparent mechanism for refunding registration fees in cases where project applications are rejected or withdrawn beyond the prescribed period. The tribunal said such a framework would bring greater certainty to the registration process and reduce unnecessary litigation between developers and the regulator. 
The ruling is significant for the real estate sector in Odisha as it clarifies the limits of a regulator's powers under the Real Estate (Regulation and Development) Act. It also reinforces the principle that regulatory authorities cannot retain money collected from applicants unless there is clear legal authority to do so.