Rural Project Promoters Cannot Avoid RERA Merely By Relying On Pre-RERA Sale Deeds: Odisha REAT

The Odisha Real Estate Appellate Tribunal (REAT) on 6 July held that execution of sale deeds before the Real Estate (Regulation and Development) Act, 2016 (RERA) came into force does not conclusively establish completion of a project, and a promoter cannot claim exemption from RERA merely on that basis.

A Bench comprising Members S.K. Rajguru and Dr. B.K. Das dismissed an appeal filed by Reeta Structurals Pvt. Ltd. and its directors against an Odisha Real Estate Regulatory Authority (ORERA) order directing completion of pending amenities, obtaining of a valid occupancy certificate, formation of an association of allottees and handing over of common areas in the company's “Reeta Valley Apartment” project at Gudiapokhari Chhak, Pipili, Puri. It observed:

"As provision of the ODA Act, 1982 is not applicable to the projects in rural areas and mere executions of a number of sale deeds in respect of the flats of the project are not conclusive proof regarding completion of the present project prior to the commencement of the RERA Act, we think it appropriate to follow the views of the Full Bench of this Tribunal in O.A. No.62/2023 and O.A. No.48/2024 which are based on the guidelines of a Govt. notification having retrospective effect."

The dispute arose from the “Reeta Valley Apartment” project developed by Reeta Structurals Pvt. Ltd. at Gudiapokhari Chhak, Pipili, Puri.

Homebuyer Manmath Kumar Pradhan purchased Flat No. A-2/315 through a registered sale deed dated 29 August 2016 after the promoter allegedly promised various amenities through its brochure.

Pradhan alleged that several facilities, including a landscaped garden, children's play area, jogging track, drainage system, fire safety equipment and intercom services, remained incomplete. He further alleged that the promoter had neither obtained a valid occupancy certificate nor formed an association of allottees as required under RERA.

After issuing a legal notice on 10 June 2020, Pradhan approached ORERA under Section 31 of RERA (which allows an aggrieved person to file a complaint before the Regulatory Authority). By an order dated 25 June 2024, ORERA directed Reeta Structurals Pvt. Ltd. to complete the remaining works, obtain a valid occupancy certificate, form the association of allottees and hand over the common areas.

Aggrieved by the order, Reeta Structurals Pvt. Ltd. and its directors filed an appeal before the REAT under Section 44 of RERA (which provides for an appeal against orders of the Regulatory Authority). It relied on an occupancy certificate issued by the Block Development Officer (BDO), Pipili on 27 April 2017, sale deeds executed before RERA came into force on 1 May 2017, and an earlier Tribunal decision concerning the same project which had held that the project was completed before RERA and did not require registration under the Act.

Pradhan contended that he was not bound by the earlier proceedings and relied on ORERA's inspection reports to argue that the project remained incomplete.

Rejecting the promoter's contention, the Tribunal held that the Odisha Development Authorities (ODA) Act, 1982 does not apply to rural projects. It referred to the State Government's notification dated 15 February 2020, which requires projects approved by Block Development Officers (BDOs) or Panchayati Raj Institutions (PRIs) before 7 June 2018 to be validated by the Project Director, District Urban Development Agency (PD, DUDA) before they can be treated as completed. The Bench found that no such validation had been obtained and observed:

"The same having not yet been done, the project on the basis of a building plan, which is yet to be validated by the appropriate authority i.e. PD, DUDA, Puri, cannot be said to be completed prior to the commencement of the RERA Act."

The Bench further held that the occupancy certificate issued by the BDO could not be treated as one issued by the competent authority unless the building plan was validated by PD, DUDA, Puri. It clarified:

“Occupancy Certificate in respect of the project issued by the BDO, Pipili Block, cannot be said to have been issued by the Competent Authority unless there is a valid completion certificate and the building plan approved by the BDO, Pipili in respect of the project is approved by the DUDA, Puri after satisfaction about the adherence to the procedures as laid down in the notification dtd. 15.2.2020.”

It also held that the earlier decision concerning the project did not bind Pradhan and that the project could not be treated as completed before RERA came into force without validation by PD, DUDA, Puri.

Accordingly, the REAT dismissed the appeal and upheld ORERA's directions requiring Reeta Structurals Pvt. Ltd. and its directors to complete the pending obligations.

For the Appellants (Reeta Structurals Pvt. Ltd. & Ors.): Advocate A.K. Mishra

For Respondent No. 1 (Manmath Kumar Pradhan): Advocate L.K. Rath

For Respondent No. 2 (Secretary, ORERA): Advocate B. Nayak