Odisha Tribunal Upholds Rs 3 Lakh Penalty on Builder for Flawed Flat Handover
In a significant ruling reinforcing real estate regulations, the Odisha Real Estate Appellate Tribunal (OREAT) has dismissed an appeal filed by a city-based promoter and upheld the substantial Rs 3 lakh penalty imposed on him. The penalty was originally levied for handing over flats at the Gadakana housing project without securing the mandatory occupancy certificate (OC) and for failing to obtain the essential registration certificate from the Odisha Real Estate Regulatory Authority (ORERA).
Tribunal Confirms ORERA's March 2024 Direction
The OREAT order, passed on March 6, 2024, firmly confirmed ORERA's earlier direction from March 4, 2024. This direction penalized the promoter for violating Section 3(1) of the Real Estate (Regulation and Development) Act, 2016. This critical section mandates the registration of all eligible real estate projects before any sale or marketing activities can commence. The tribunal also upheld the finding that the promoter gave possession to allottees in clear violation of Section 12(d) of the Bhubaneswar Development Authority approval, which explicitly requires an occupancy certificate prior to any occupation of the premises.
Developer's Defense and Tribunal's Scrutiny
The developer mounted a defense, arguing that the project was completed before the RERA Act came into force on May 1, 2017. To support this claim, he cited a completion certificate dated March 31, 2017, asserting that the project therefore did not require registration under the new regulatory framework.
However, the tribunal conducted a thorough examination and found the presented completion certificate to be highly doubtful. It was determined that the document was not in accordance with the Bhubaneswar Development Authority's established planning and building standards regulations. The tribunal noted several critical deficiencies:
- The certificate lacked mandatory attachments, including a fire safety No Objection Certificate (NOC).
- It failed to provide proof of service linkages.
- Approved building plans were conspicuously absent from the submission.
Failure to Respond and Dismissal of Appeal
The tribunal further observed that the builder was given multiple opportunities to file a show-cause reply between October 2023 and February 2024. Despite these chances, the promoter failed to submit any written response to the allegations. Rejecting the appellant's subsequent claim of a violation of natural justice, the bench noted that the promoter did not avail himself of the provided opportunities. Consequently, ORERA was fully justified in proceeding with the case based on the available evidence.
Finding no illegality or procedural flaw in ORERA's original order, the tribunal dismissed the appeal as entirely devoid of merit. The builder has been directed to deposit the Rs 3 lakh penalty with ORERA. Upon successful payment, the promoter will be entitled to a refund of the statutory amount that was deposited at the time of filing the appeal. This ruling underscores the strict enforcement of real estate laws designed to protect homebuyers and ensure project compliance.
