BHUBANESWAR: The Odisha Real Estate Appellate Tribunal (OREAT) has overturned a previous order that mandated a refund, instead instructing the builder of a significant housing project in Phulnakhra to finalize a sale agreement for a flat booked in 2018. The tribunal deemed the builder’s cancellation arbitrary and discriminatory.
This ruling was made last week in response to a decision by the Odisha Real Estate Regulatory Authority (ORERA) from May 2024. According to case records, the buyer had booked a flat along NH-16 by paying Rs 1 lakh in November 2018, with a total cost of approximately Rs 53.6 lakh.
The buyer alleged that, despite multiple follow-ups and attempts to make further payments, the developer neither responded nor executed a sale agreement. He later found out that his allotment had been verbally cancelled. Additionally, the buyer claimed that a demand notice was sent by the developer in February 2019, even before construction commenced.
The developer argued that the Rs 1 lakh deposit was merely an expression of interest and not the required 10% booking amount. They maintained that the buyer failed to make further payments despite reminders, and according to the signed terms, the developer had the right to reject applications without providing reasons.
The developer stated that the allotment was cancelled due to non-payment and subsequently given to another buyer. During earlier hearings, ORERA directed the developer to refund Rs 1 lakh plus 9.5% annual interest from 2018, effectively terminating the transaction.
In overruling ORERA’s decision, the appellate tribunal declared that the buyer qualified as an allottee under the Real Estate (Regulation and Development) Act (RERA), noting that the payment, despite being less than 10%, was sufficient to establish a legal relationship once accepted by the promoter.
The tribunal clarified that while the RERA Act permits promoters to accept up to 10% in advance before an agreement, it does not prohibit the acceptance of lower amounts. Furthermore, it observed that other buyers from the same project received agreements years after booking, while the complainant was denied similar treatment.
“This indicates a discriminatory approach and inconsistent standards,” the tribunal remarked. It cited Supreme Court rulings emphasizing that the right to housing is a fundamental right under Article 21 of the Constitution, asserting that homebuyers should not be viewed merely as parties to a commercial transaction.
