ORERA's Failure To Decide Within 30 Days Won't Deem Incomplete RERA Application Registered: Orissa High Court

The Orissa High Court has ruled that an incomplete or deficient application cannot be treated as "deemed registered" under Section 5(2) of the Real Estate (Regulation and Development) Act, 2016, merely because the regulatory authority failed to decide it within 30 days.

Justice Sashikanta Mishra observed that Section 5(2) applies only to a valid application that complies with the Act, Rules and Regulations.

Since Vishnu Associates' application remained incomplete, including for want of the final building-plan approval from the District Urban Development Agency (DUDA) in Form-II as required under Section 4(2)(c) and (d) of the Act, the developer could not claim deemed registration.

"This Court fully concurs with the contention raised that 'application' within the meaning of Section 5 has to be a valid application complete in all respects and free from deficiencies and incomplete or deficient application cannot be treated as a valid application. As per clause (b) of sub-section (1), the application must conform to the provisions of the Act, Rules or Regulations. ," the court observed.

The case arose from "Exotica Garden," a group housing project at Champati in Cuttack comprising 79 duplex buildings, of which 40 had already been constructed. Vishnu Associates had obtained approval for the project from the Block Development Officer, Salipur, in 2016.

After the RERA Act came into force on February 25, 2017, promoters of ongoing projects that had not received completion certificates were required to seek registration with Odisha RERA within three months. Vishnu Associates submitted its application in July 2018, beyond the prescribed deadline. ORERA later imposed a penalty of ₹60,000 and directed it to submit its registration application within 30 days.

ORERA later pointed out deficiencies in the application through a series of letters but neither granted nor rejected registration within the statutory 30-day period. Relying on Section 5(2), Vishnu Associates argued that its project stood deemed registered from August 1, 2018.

Following a state government notification issued on February 15, 2020, the developer applied to DUDA for approval of the project plan. The Town Planning Unit identified 19 deficiencies before granting technical sanction in October 2021. Final approval, however, remained pending.

The RERA nevertheless rejected the registration application on October 27, 2021, while giving the developer liberty to apply afresh after obtaining approval from the competent authority.

Before the high court, Vishnu Associates argued that ORERA's failure to decide its application within 30 days automatically triggered deemed registration. It also contended that it could not be faulted for failing to produce DUDA's final approval when the authority itself had not decided its application.

The authority argued that Section 5(2) applies only to complete applications and that the developer had failed to cure the deficiencies despite repeated opportunities. DUDA also maintained that the approval process was delayed because the required documents had not been furnished.

The court agreed with ORERA that deemed registration could not arise from an incomplete application. It also held that ORERA could not keep a defective application pending beyond the statutory period. If the application did not comply with the Act, Rules or Regulations, ORERA ought to have rejected it within 30 days instead of keeping it pending for more than a year, as the statute did not permit any extension of time.

Even so, the court found that the absence of DUDA's final approval could not be attributed to the developer because the approval application itself remained pending before the authority.

"This Court is of the view that the inability of the petitioner to produce the required approval cannot be attributed to it, but solely to DUDA. Without considering this vital aspect, ORERA appears to have rejected the application somewhat mechanically even though the petitioner cannot be blamed for the delay. This Court therefore, holds that rejection of the application of the petitioner by ORERA was neither proper nor justified, apart from being contrary to the statutory provisions referred above," the court observed.

The court directed DUDA to decide the pending approval application within seven days of receiving a certified copy of the judgment.

If approval is granted, Vishnu Associates will be free to submit a fresh application before the authority, which must decide it strictly in accordance with Section 5 of the Act.

For Petitioner (Vishnu Associates Pvt. Ltd.): Senior Advocate S.S. Das and Advocate S. Das.

For Respondents (State of Odisha and District Urban Development Agency): Additional Government Advocate A.R. Das and Advocates G. Mishra and A.K. Mohapatra.

For Respondent (Odisha Real Estate Regulatory Authority): Advocate P.S. Nayak.