Odisha REAT Issues Document Checklist For Authorities To Determine Promoter Status Under RERA

The Odisha Real Estate Appellate Tribunal has set aside a 10 lakh penalty imposed on T. Kiran Kumar, holding that a person cannot be treated as a “promoter” under the real estate law without documentary evidence and directing the Authority to rely on specific records before fixing liability.

A bench of Chairperson Justice P. Patnaik and members S.K. Rajguru and Dr. B.K. Das held that liability cannot rest solely on inspection reports.

Referring to the absence of ownership records, development agreements, statutory permissions, and transaction or marketing documents linking Kumar to the project, the tribunal observed,

“So in absence of the above mentioned materials it cannot be concluded only on the basis of the inspection report dtd. 15.7.2022 of the Enforcement Officer of the ORERA that Sri T.Kiran Kumar has developed a plotted project in the name 'SSR Layout' at Ginjriguda without registering it with the ORERA”.

The tribunal said that establishing promotership requires objective material. It specified that the Authority must examine the following documents in the future.

• Records of Rights, sale deed, or any other document showing ownership or transfer of the project land.
• Development agreement along with an irrevocable power of attorney where the promoter is not the landowner.
• Layout approval or construction permission issued by the competent authority.
• Advertisements, brochures, pamphlets, or hoardings reflecting the promoter's role and inviting buyers.
• Allotment letters, agreements to sell, money receipts, or registered sale deeds issued to buyers.
• Applications for electricity and water connections  made for the project.
• Photographs showing development activity at the project site.

For determining project cost, the tribunal added the following:

• Registered sale deeds showing the price of plots or flats in the project.
• Valuation or opinion reports from competent revenue authorities or government-approved valuers on land and construction cost.

The case arose from a complaint by advocate Kamala Kanta Das alleging illegal plotting of agricultural land. The Regulatory Authority could not locate the project named in the complaint.

During inspection, officials instead came across another project called “SSR Layout” and attributed it to  T. Kiran Kumar based on their interaction with him and site observations recorded in inspection reports.

Acting on these reports, the Authority initiated proceedings and imposed a penalty of Rs 10 lakh for non-registration.

Kumar challenged the order, stating that he had no role in developing or managing the project and that no document linked him to it. The Authority defended its action, relying on inspection reports that recorded the existence of a developed layout with basic infrastructure and attributed its development to him.

The tribunal found that the conclusion was unsupported by documentary evidence. It noted the absence of ownership records, development agreements, permissions, or proof of sale or marketing. Even the photographs on record did not identify the project or its promoter.

The bench observed, “No document has been produced in support of the claim in the inspection report dated 15.7.2022 that the area of the project land is Ac.7.00. The report does not make it clear if the project has been developed on the basis of an approved lay out plan with specific number of plots. No site plan in proof of plotting has been produced. Though copies of some photographs showing approach road and internal road of the project, drainage system, water supply, parking area and children's play area have been filed the same nowhere disclose the name of the project and its promoter”.

It also rejected the estimated project cost of about Rs.38.41 crore, noting that the rate used had been sourced from a security guard and was not based on any verifiable record.

In these circumstances, the tribunal held the penalty to be unsustainable and set it aside, directing refund of the amount deposited by Kumar along with accrued interest after expiry of the appeal period

For Appellant (Shri T. Kiran Kumar): Advocate A.K. Sahoo.

For Respondent (The Secretary, ORERA): Advocate B. Nayak.