The Odisha Real Estate Appellate Tribunal’s decision to uphold a Rs 90 lakh penalty on a Puri developer while setting aside a demolition direction has exposed a difficult fault line in urban regulation: a project can be found to have departed substantially from its sanctioned plan, yet the question of what happens to the resulting structure may depend on a different authority and a different law.
The case concerns a G+10 commercial-cum-residential building at Sipasarubali in Puri. The developer had approval for a G+7 residential project, according to the order reported by The Times of India. The Odisha Real Estate Regulatory Authority had earlier found that the promoter had developed the project contrary to the sanctioned plan and directed demolition of the unauthorised portions. OREAT upheld the penalty but ruled that Orera did not have the power to direct a development authority to carry out the demolition.
That distinction matters because building-plan enforcement in growing urban areas is divided among multiple institutions. Real-estate regulators examine the conduct of promoters and compliance with project approvals. Development authorities approve plans, regulate land use and building permissions, and can take action under the laws governing development and construction. The tribunal’s order makes clear that a finding of violation by the real-estate regulator does not automatically translate into an order for a development authority to demolish a structure.
The tribunal said the revised plan for the building had never received final approval from the Puri-Konark Development Authority. It also noted that mandatory clearances, including a No Objection Certificate from the Airports Authority of India and pollution-related approvals, had not been obtained. These details place the dispute beyond a simple question of whether the building gained additional floors. They point to a wider approval chain in which the sanctioned use, building height and required statutory clearances are connected.
The original approval was for a G+7 residential building. The structure examined by the tribunal was a G+10 commercial-cum-residential building. That difference changed both the physical scale and the stated use of the project. The case therefore illustrates why sanctioned plans are central to urban administration: they are the formal link between a project’s approved design and the public authorities’ assumptions about land use, safety, infrastructure demand and surrounding development.
OREAT agreed with Orera that the promoter had violated provisions of the Real Estate (Regulation and Development) Act, 2016, by carrying out development contrary to the sanctioned plan. It upheld the Rs 90 lakh penalty and observed that the amount represented only around 0.54% of the project’s estimated cost of Rs 166 crore. The tribunal’s reasoning preserves the finding of regulatory misconduct even while limiting the remedy available to the real-estate regulator.
This separation between liability and remedy is the central feature of the case. The promoter remains subject to the financial penalty for departing from the approved plan. However, the tribunal held that Orera’s powers under Sections 35 to 38 of the RERA law did not extend to ordering PKDA to demolish the unauthorised portions. As reported from the order, the tribunal said that any such action would have to be taken independently under the Odisha Development Authorities Act.
The decision consequently leaves enforcement with the authority that has the statutory power to act on the building itself. That may appear procedurally straightforward, but it creates an important institutional question: when one regulator records a violation and another authority later regularises the structure, how should the two decisions interact? The case shows that a penalty for non-compliance and a subsequent decision on the physical status of the building are not necessarily the same legal process.
A significant development during the appeal was PKDA’s regularisation of the existing G+10 structure through an order issued on May 21. The authority collected compounding fees and other charges from the developer. The tribunal took note of that regularisation while also referring to Supreme Court judgments stating that illegal structures should not ordinarily be condoned and that authorities must act against violations of approved building plans.
The tribunal did not treat the regularisation as an uncomplicated resolution. It observed that the validity of PKDA’s order would have to be examined in light of the principles laid down by the Supreme Court. That leaves the legal status of the regularisation as a live issue in the case. The structure’s continued existence, the penalty imposed on the promoter and the authority’s power to regularise the building are therefore connected but distinct questions.
The facts also reveal the limits of treating compounding fees as a substitute for prior compliance. The available account does not state the basis on which PKDA decided to regularise the building, nor does it provide the amount of the compounding fees and other charges. It does establish, however, that the building was regularised after the dispute over deviations had reached the appellate tribunal and that the structure lacked final approval of the revised plan when the violation was considered.
For residents and purchasers, the institutional division has practical consequences. A project’s compliance cannot be assessed only by asking whether a real-estate regulator has imposed a penalty. Nor can the later collection of fees alone establish that every original approval and clearance requirement was satisfied before construction. The case underlines the need to distinguish between an approved plan, a deviation from that plan, a penalty for the deviation and a later attempt to regularise the built structure.
The case is also relevant to the credibility of urban planning systems. Sanctioned plans are intended to provide a predictable basis for construction and public administration. When a building exceeds the approved height, changes its use and proceeds without identified clearances, enforcement becomes a test of whether the planning system can maintain the difference between what was approved and what was built. If the structure is later regularised, the legal process must still explain how the deviation is treated and which authority is accountable for that decision.
OREAT’s order does not erase the finding that the developer departed from the sanctioned plan. Instead, it places the enforcement question within the correct statutory framework. Orera can impose the penalty it is empowered to impose, but demolition or other action against the physical structure must come from the competent development authority under the applicable development law.
The immediate next issue is the validity of PKDA’s regularisation order. The tribunal has indicated that it must be examined against Supreme Court principles on unauthorised construction. Until that question is resolved, the case remains an important illustration of how urban enforcement can become fragmented across regulators, development authorities and statutory approval agencies. Its lasting significance lies not only in the Rs 90 lakh penalty, but in the unresolved question of whether post-construction regularisation can coexist with the planning system’s obligation to enforce approved building plans.
