BHUBANESWAR: The Odisha Real Estate Appellate Tribunal (OREAT) has recently ruled that the Odisha Real Estate Regulatory Authority (ORERA) cannot withhold the full registration fees for projects in cases of rejection or delayed withdrawal. The tribunal deemed such actions arbitrary and lacking in legal foundation.
The tribunal delivered this verdict while reviewing two similar appeals involving prominent residential projects in the city, dismissing ORERA’s refusal to issue refunds and ordering the return of the registration fees, retaining only 12% for processing costs. In total, ORERA collected over Rs 20 lakh in registration fees from the two developers.
In the first case, a developer submitted Rs 16.14 lakh for project registration via the earlier ORERA 1.0 portal. Upon being instructed to reapply under the newer ORERA 2.0, the developer requested either a migration of the application or a refund. ORERA rejected the request, invoking a rule that limits refunds to a 30-day period.
In the second case, another developer paid Rs 8.60 lakh for the registration of its residential project, but had its application rejected due to inconsistencies in building plan approvals. The request for a refund or fee adjustment was similarly dismissed, as ORERA asserted that the law does not permit such relief post-rejection.
ORERA argued that the RERA Act permits only partial refunds, deducting 10% as processing fees, if an application is withdrawn within 30 days. Since both developers sought assistance after this timeframe or post-rejection, ORERA held that it had no authority to refund or adjust fees.
The tribunal countered ORERA’s stance, noting that the governing rule does not address refunds in cases of rejection or delayed withdrawal, and such omission cannot be interpreted to authorize ORERA to seize the full fee. The tribunal stated, “Public authorities can only exercise powers explicitly given by law.”
It also asserted that retaining the entire registration fee leads to unjust enrichment and contravenes constitutional principles, emphasizing that registration fees under RERA serve a regulatory purpose rather than acting as a penalty. Total forfeiture is disproportionate and inconsistent with the aim of promoting real estate development.
In conclusion, the tribunal instructed ORERA to refund the registration fees in both instances, allowing for a 12% deduction for administrative costs. The tribunal further recommended that ORERA revise its procedures to implement a clear and structured fee refund policy in cases of rejection or delayed withdrawals, similar to practices in other states.
