Odisha REAT: Developer Must Refund ₹2.32 Crore IFMS to Residents; Cannot Retain Funds Without Audited Accounts

March 20, 2026 : The Odisha Real Estate Appellate Tribunal (REAT) has ruled that a promoter cannot retain maintenance or corpus funds collected from allottees without substantiating their utilisation through proper accounts supported by audited financial statements and documentary evidence.

The Tribunal, while partly allowing an appeal filed by NBCC (India) Ltd., directed the developer to refund ₹2,32,54,200 towards the Interest Free Maintenance Security (IFMS) to the NBCC Imperia Residents’ Welfare Association (NIRWA).

The Bench comprising Justice P. Patnaik (Chairperson), S.K. Rajguru (Judicial Member), and Dr. B.K. Das (Technical/Administrative Member) was hearing an appeal arising out of an order dated 8 June 2023 passed by the Odisha Real Estate Regulatory Authority (ORERA).

The dispute arose in relation to the “NBCC Imperia Residential Complex” at Bhubaneswar, where NBCC had collected maintenance charges and corpus funds from homebuyers. After the residents’ association took over maintenance in June 2022, it sought transfer of the corpus fund, alleging non-refund and deficiencies in maintenance and construction.

NBCC contended that, under the maintenance agreement, it was entitled to utilise the corpus fund for meeting maintenance expenses, particularly where the maintenance account fell short. It claimed that excess expenditure incurred during the maintenance period had been adjusted against the corpus fund.

However, the Tribunal found that NBCC failed to produce credible evidence to support its claims. It noted that no bank statements, audited income and expenditure statements, invoices, or payment proofs were placed on record to substantiate the alleged utilisation of funds.

The Tribunal emphasised that the burden lies on the promoter to justify how funds collected from allottees are utilised. Mere tabulated figures or unverified statements, it held, cannot be relied upon in the absence of supporting documentation.

Significantly, the Tribunal also examined the maintenance agreement and found it to be one-sided. It observed that the agreement lacked provisions ensuring transparency or accountability in the management of maintenance funds, thereby rendering it inequitable.

Rejecting NBCC’s plea that the corpus fund had been exhausted, the Tribunal held that in the absence of proper accounts and evidence, such a claim could not be accepted. It ultimately accepted ₹2,32,54,200 as the corpus fund amount and directed its refund to the residents’ association.

On other aspects, the Tribunal partly modified ORERA’s directions. It held that certain directions—such as making the 32 KVA power line functional, providing parking, constructing a park, and ensuring CCTV functionality—had already been complied with and required no further enforcement.

At the same time, it set aside directions relating to amenities like a community hall and video door phones, noting that these were not part of the approved plans or contractual terms. However, the Tribunal upheld directions requiring the developer to rectify defects in common areas and hand over essential project documents, including sanctioned plans and occupancy certificates, to the association.

In conclusion, the Tribunal clarified that developers cannot retain maintenance or corpus funds in the absence of transparent accounting backed by audited records and documentary proof. The appeal was accordingly allowed in part.

Case Title: NBCC (India) Ltd. v. NBCC Imperia Residents’ Welfare Association & Anr.
Case No.: OREAT Appeal No. 124 of 2023 (Arising out of C.C. No. 263 of 2022)