OREAT orders housing project builder to execute a sale agreement for flat booked in 2018

Bhubaneswar: The Odisha Real Estate Appellate Tribunal (OREAT) has set aside an earlier order directing a refund and instead instructed the builder of a major housing project in Phulnakhra to execute a sale agreement for a flat booked in 2018.

The tribunal held that the builder’s cancellation was arbitrary and discriminatory.The tribunal passed the order earlier last week against a May 2024 decision of the Odisha Real Estate Regulatory Authority (ORERA). According to the case records, the aggrieved buyer booked a flat in the project along NH-16 by paying Rs 1 lakh in Nov 2018, against a total consideration of about Rs 53.6 lakh.The complainant alleged that despite repeated attempts to follow up and make further payments, the developer neither responded nor executed an agreement for sale.

He later learnt that his allotment was verbally cancelled. The buyer also claimed that the developer issued a demand notice in Feb 2019 even before starting construction.The developer of the mega housing project in this case contended that the Rs 1 lakh deposited was only an expression of interest and not the mandatory 10% booking amount. It argued that the buyer failed to make further payments despite follow-ups and that, as per signed terms, the developer had the discretion to reject applications without assigning reasons.

The firm maintained that the allotment was cancelled due to non-payment and the unit was allotted to another buyer. ORERA, while hearing the case earlier, directed the developer to refund Rs 1 lakh, along with 9.5% annual interest from 2018, effectively treating the transaction as terminated.Overriding the ORERA decision, the appellate tribunal held that the buyer qualified as an allottee under the Real Estate (Regulation and Development) Act (RERA), noting that the payment, though below 10 %, was sufficient to establish a legal relationship once accepted by the promoter.The tribunal clarified that the RERA Act allows promoters to accept advance payment up to 10% before executing an agreement but does not bar accepting lesser amounts. It further found that buyers of a similar nature in the same project were granted agreements years after booking, while the complainant here was denied similar treatment.“This reflects a discriminatory approach and double standards,” the tribunal observed. Citing Supreme Court rulings, the tribunal reiterated that the right to housing is part of the fundamental right to life under Article 21of the Constitution and that homebuyers cannot be treated merely as parties to a commercial transaction.