Developer Must Obtain Court Permission For Rights Affecting Minor's Property Share: Odisha REAT

On 6 November, the Odisha Real Estate Appellate Tribunal (REAT) held that a developer must obtain prior court permission under the Hindu Minority and Guardianship Act, 1956, before exercising development rights that affect a minor's undivided share in inherited property.

A Bench of Judicial Member S.K. Rajguru and Technical/Administrative Member Dr. B.K. Das upheld the Odisha Real Estate Regulatory Authority's (ORERA) rejection of Dugar Realty & Infrastructure Pvt. Ltd.'s application to register its Dugar Swastik Residential Project. It said:

“As Section 4(2) (l) (A) of the R.E ( R & D) Act, 2016 provides that, the promoter shall furnish a declaration supported by an affidavit stating that he has a legal title to the land on which the development is proposed along with legally valid documents with authentication of such title, if such land is owned by another person, and as it is already held above that the development right entrusted to the appellant affects the minor's share in the project land, such share will remain vulnerable to challenge in absence of the required judicial permission under Section 8 (2) of the Act, 1956”.

The dispute concerned 0.220 acres of land at Andilo Mouza in Khurda district, recorded in the name of Kumundalata Sahoo. She died on 10 September 2020, leaving behind three sons and a daughter.

On 22 March 2021, her heirs entered into an agreement with Dugar Realty to develop a residential apartment project on the land, under which 40% of the project was allocated to the landowners and 60% to the developer. Dugar Realty paid the heirs Rs. 16 lakh. One of the sons, Trinath Sahoo, died on 10 May 2021, leaving behind his wife, Gita Jajnyaseni, and their minor son, Sai Krishna.

On 31 January 2022, the landowners, including Trinath's legal successors, executed a registered joint development agreement and general power of attorney in favour of Dugar Realty. Gita executed the documents both in her individual capacity and as the natural guardian of her minor son.

The Bhubaneswar Development Authority approved the proposed S+4 residential building on 25 August 2023. Subsequently, Dugar Realty applied for project registration on 1 November 2023. ORERA rejected the application on 2 August 2024, citing deficiencies that had not been rectified.

Before the Tribunal, Dugar Realty argued that permission under Section 8(2) of the Hindu Minority and Guardianship Act, 1956, was unnecessary because the minor was not selling his share in the property. ORERA maintained that prior court permission was required and had not been obtained despite repeated opportunities.

The Tribunal noted that neither the rejection order nor the registration file clearly specified the deficiencies in the application. However, it observed that Dugar Realty's appeal identified the absence of court permission as the disputed requirement.

On examining the joint development agreement and power of attorney, it found that Dugar Realty had been granted the right to sell 60% of the total super built-up area, together with proportionate undivided land rights. The power of attorney also authorised the developer to execute and register the sale documents.

Therefore, the Tribunal rejected the contention that the agreement was merely an arrangement for construction. It observed:

“Thus, even if the mother guardian has executed the Development Agreement on behalf of her minor son, the agreement goes beyond a mere arrangement for construction.”

Further, the Bench held that the agreement conferred development and sale rights affecting the minor's undivided share in the land. Dugar Realty was therefore required to obtain prior permission from the District Judge, Khurda, under Section 8(2) of the Hindu Minority and Guardianship Act before exercising those rights.

It also held that, without such permission, the minor's share remained vulnerable to legal challenge, preventing Dugar Realty from satisfying the requirement under Section 4(2)(l)(A) of the Real Estate (Regulation and Development) Act, 2016, to furnish legally valid title documents.

Accordingly, the REAT upheld the rejection of the registration application, while allowing Dugar Realty to apply afresh after obtaining court permission and complying with the deficiencies.

Appearances for petitioner (M/s. Dugar Realty & Infrastructure Pvt. Ltd.): Advocate B.K. Badajena.

Appearances for respondent (Odisha Real Estate Regulatory Authority): Advocate B. Nayak.