Real Estate and Land Legislations in Odisha

Introduction

Industrial investment in Odisha continued to gain significant momentum during the year 2025. As per the Odisha Economic Survey 2025 – 2026, Utkarsh Odisha – Make in Odisha Conclave 2025 drew investment commitments worth ~₹12.89 lakh crore with nearly 145 MoUs being signed.¹ State’s single-window clearance authorities approved close to ₹8.15 lakh crore of investment during the period between June 2024 and March 2026. At least 80 industrial projects with investment exceeding ~₹1.78 lakh crore were inaugurated during the year 2025.²

In this backdrop, we review the key judicial developments during the year 2025 around real estate and land laws in Odisha that are relevant to investment and diligence in land-intensive industries.

This yearly round-up builds on our previous insights on key considerations for allotment and transfer of IDCO land and acquisition of freehold land in Odisha.

1. IDCO empowered to cancel plot allotment if allottee fails to commence commercial production within prescribed timeline³

Orissa High Court (“OHC”) upheld Orissa Industrial Infrastructure Development Corporation’s (“IDCO”) cancellation of plot allotment for allottee’s failure to commence production within the prescribed timeline. The lease deed and the allotment letter required the allottee to implement the project and commence production within 3 years from date of allotment. On the allottee’s failure to commence construction even after 5 years, IDCO issued a show-cause notice seeking reasons for the delay. The allottee’s response was unsatisfactory and consequently, IDCO cancelled the plot allotment. The allottee attributed the delay in project implementation to the delay in building plan approval by governmental authorities and challenged IDCO’s cancellation as arbitrary and legally untenable.

OHC ruled that the allottee had failed to comply with the land allotment and lease conditions, despite being provided multiple opportunities for rectification. Therefore, there was no equitable ground for granting relief, and the cancellation of plot allotment by IDCO was held valid.

OHC’s another recent ruling in M/s Adyasa Industries, Bhubaneswar v. Orissa Industrial Infrastructure Development Corporation⁴ reiterates this principle. IDCO’s cancellation of plot allotment due to the allottee’s failure to commence construction within stipulated timeline was upheld, despite inherent defects and limitations in the allotted plot. OHC observed that the allotment was on an “as-is where-is” basis and therefore inherent defects in the allotted plot cannot be used as a ground to vitiate the project commencement timelines. With respect to infrastructure and drainage issues on the allotted plot, OHC specifically mentioned that the allottee must “exercise adequate due diligence prior to accepting the allotment”. Allottees would be well placed to conduct technical and other feasibility studies before accepting the allotment, as any inherent defects in the plot would not entitle the allottee to extension of time or relaxation around stipulations.

The principle upheld by the OHC is aligned with statutory provisions governing IDCO land. IDCO is empowered to rescind plot allotment and evict allottees for breach of allotment conditions, which include time-bound project implementation.^{5 6 7}Large industries and MSMEs are allowed a moratorium of 5 years and 3 years respectively to construct and implement the project⁸, failing which the allotment may be cancelled by IDCO.

2. All land transfers prior to the 2023 amendment, despite being in violation of land fragmentation restriction, are retrospectively valid⁹

OHC upheld the validity of a sale in violation of land fragmentation restrictions¹⁰ under Odisha Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972 (“PFL Act, 1972”). Previously, PFL Act, 1972 restricted all land transfers which would result in fragmentation of land, and such fragment could be transferred only to the landowner of contiguous Chaka (i.e., land consolidated under the PFL Act).¹¹ All transfers or partitions carried out in contravention of Section 34 were void.¹² Subsequently, these restrictions were omitted¹³ and the amendment retrospectively validated all transfers carried out in violation of the PFL Act, 1972¹⁴.

The petitioner had purchased certain Chaka lands in the year 1994 through a registered sale deed. The sale deed and the resultant transfer were challenged as invalid for violating the then-extant restriction on land fragmentation under PFL Act, 1972.

The Collector, Jagatsinghpur, held the sale void for breach of PFL Act, 1972. However, OHC relying on the 2023 amendment upheld the validity of land transfer carried out in the year 1994 in contravention of Sections 34 and 35, based on retrospective validation of the transfer.

It is now clear that: (i) fragmentation of land and its consequent sale is no longer a contravention of the PFL Act, 1972 and such transactions will no longer be invalidated, and (ii) Section 36A is retrospective in nature and validates all historical transactions made in contravention of Section 34 prior to 2023. That said, this immunity does not extend to transactions in contravention of the PFL Act, 1972 where eviction has already been effected.¹⁵

3. Gharabari (homestead) lands in urban areas are not automatically exempted from applicability of the OLR Act, 1960 under Section 73(c) of the OLR Act, 1960, including Section 22 (restriction on transfer of SC-owned lands to non-SC)

OHC ruled that gharabari (homestead) land situated in a notified urban area is not automatically exempt from restrictions around transfer of land from scheduled caste / scheduled tribe to a non-scheduled caste / scheduled tribe landowner.¹⁶

The petitioners (belonging to a scheduled caste) owned certain land parcels in a notified urban area. They sought a declaration that the restriction which requires prior permission of revenue authorities for transfer of land from scheduled caste to non-scheduled caste individuals¹⁷ is not applicable to gharabari plots located in the notified urban areas. OHC reaffirmed previously laid down principles¹⁸ that mere inclusion of land in an urban area will not exclude the applicability of the provisions of the Odisha Land Reforms Act, 1960 (“OLR Act, 1960”), including Section 22.

Mere inclusion of land in an urban area will not exclude the applicability of the provisions of the OLR Act, 1960 by virtue of the exemption allowed under Section 73(c) of the OLR Act, 1960. In essence, other restrictions under the OLR Act, 1960, such as conversion requirements, land ceiling, etc. will continue to apply to land parcels in notified urban areas, unless specifically excluded by governmental actions / notifications.

In other words, simply because a land parcel is situated within a notified urban area does not equate to inapplicability of the provisions of OLR Act, 1960. Section 22 (i.e., prior revenue permission for an SC/ST-to-non-SC/ST transfer) continues to apply, and the Section 73(c) exemption cannot be relied on to bypass it.

4. Recording of a land parcel in favour of the state government in the record of rights document (ROR / patta) does not extinguish the title accrued in favour of the landowners; ROR does not by itself create or extinguish title

OHC decided upon the issue whether recording of land parcels in favour of the state government in the record of rights (ROR) while the antecedent title exists in favour of the landowners, extinguishes the title accrued in favour of the landowners. OHC held that a plaintiff’s suit based on antecedent title and possession cannot be rejected merely based on ROR recordings, as the ROR by itself does not create or extinguish title.¹⁹

A portion of the suit land was originally settled in favour of certain individuals by the revenue department. Subsequently, the plaintiff acquired the land parcels from the legal heirs and successor vendees of the originally recorded landholders, through registered sale deeds. Subsequent to the plaintiff’s acquisition, when the revenue department carried out fresh settlement operations, the plaintiff could not produce the original settlement records. As a result, the settlement officials recorded the suit land in favour of the state government as “Abadjogya Anabadi” (i.e., government lands which are not cultivated but are capable of being cultivated). The state government categorised the plaintiff as encroachers on the government land, and the Tahsildar was authorised to remove the illegal encroachment.

The Trial Court and the First Appellate Court held that the settlement in favour of the original landowners could not be ascertained. Further, the yadast (i.e., land ledger maintained by revenue department) recorded that no one was present on the land during the challenged settlement proceedings and therefore the land was recorded as “Abadjogya Anabadi”. Subsequently the ROR was published recording the land in favour of the state government and such settlement was also not challenged by the plaintiff for rectification during permitted period of 3 years.

OHC held that the entry in ROR neither creates title in favour of someone who in fact does not have the title nor extinguishes the title of the true owner. In fact, the true owner continues to remain the owner of the property despite the wrong recording in the ROR. Non-filing for rectification of the ROR entry within the limitation period of 3 years from the date of publication cannot extinguish the owners’ right, title and interest over the property. Consequently, the court upheld the owners’ rights to portions for which flow of title could be established through the registered sale deeds.²⁰

5. No-objection certificate must be obtained from the endowment commissioner prior to alienation of private religious lands; the endowment commissioner must follow the process of issuing a public notice prior to adjudicating upon the NOC request

OHC adjudicating upon grant of NOC for alienation of private deity land held that the endowment commissioner must issue notice to the general public and invite objections to the application within the prescribed timelines²¹ prior to adjudicating upon the NOC request.²²

In this case, the petitioners were the marfatdars (hereditary trustees) of the deity and had applied to the Commissioner of Endowments, Bhubaneswar, to grant NOC for alienation of land parcels recorded in favour of the deity. On inspection, the Inspector of Endowments observed that the worship of the deity was limited to the family members and the general public did not have access for darshan or any role in the management. The endowment commissioner refused to grant NOC on the grounds that the statement of the public had not been taken.

OHC quashed the order of the endowment commissioner and held that the commissioner must adhere to the procedure laid down under Rule 4A of the Odisha Hindu Religious Endowments Rules, 1959 (i.e., it must issue public notice inviting objections prior to granting NOC for alienation of private deity lands).

This is aligned with the wider, well settled position of law around alienation of private deity lands, which provides that the transfer restrictions under the Odisha Hindu Religious Endowments Act, 1951 (“OHRE Act, 1951”) apply to private religious institutions as well, and the approval of the endowment commissioner is necessary prior to such alienation.²³ OHC has, time and again, reiterated that permission of the endowment commissioner is mandatory for alienation of deity properties under Section 19 of the OHRE Act, 1951 and any alienation made in contravention is void.²⁴ Therefore, acquirers of land recorded in favour of a deity, including a privately managed one, must ensure adherence to the OHRE Act, 1951, including obtaining a prior NOC from the endowment commissioner.

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1. Finance Department, Government of Odisha, ‘Odisha Economic Survey 2025 – 2026’, https://finance.odisha.gov.in/sites/default/files/2025-08/OES%202025-26%20Main%20Booklet.pdf ↩︎
2. Pragativadi, ‘Odisha Govt Unveils Industries Budget 2026–27, Eyes Viksit Odisha 2036’, https://pragativadi.com/odisha-govt-unveils-industries-budget-2026-27-eyes-viksit-odisha-2036/ ↩︎
3. M/s Anupama Enterprise, Jajpur v. State of Odisha & Ors, W.P.(C) No. 16158 of 2024, Orissa High Court. ↩︎
4. W.P.(C) No. 31252 of 2021 ↩︎
5. Section 15(d), IDCO Act, 1980 ↩︎
6. Regulation 10(2), IDCO (Disposal of land, building, amenities) Regulations, 2016 ↩︎
7. Paragraph 1.15, IDCO Master Circular No. HO/ID/A/159951 dated 23 July 2016 ↩︎
8. Regulation 5(2) and Regulation 8(2), IDCO (Disposal of land, building, amenities) Regulations, 2016 ↩︎
9. Bichitrananda Jena v. State of Odisha, W.P. No. 13803 of 2019, Orissa High Court. ↩︎
10. Section 34 read with Section 35, PFL Act, 1972 ↩︎
11. Section 34, PFL Act, 1972 ↩︎
12. Section 35, PFL Act, 1972 ↩︎
13. PFL (Amendment) Act, 2023 omitted Sections 34 and 35 of the PFL Act, 1972 ↩︎
14. Section 36A, PFL Act, 1972 ↩︎
15. The position of law has been further crystallised in OHC’s judgement in Malati Siala v. Collector, Balasore & Ors, 2025 (I) OLR – 674, W.P.(C) No. 27363 of 2017, Orissa High Court, and Benudhar Swain v. Bahudi Jena, R.S.A. No. 289 of 2016, Orissa High Court ↩︎
16. Lata Mirig v. State of Odisha, W.P. No. 4047 of 2025, Orissa High Court ↩︎
17. Section 22, OLR Act, 1960 ↩︎
18. Previously ruled by Orissa HC in Hemanta Naik v. State of Odisha, 2024 (III) ILR-CUT-135, W.P. No. 27920 of 2023, Orissa High Court ↩︎
19. Gayatri Panigrahi v. State of Odisha, R.S.A No. 175 of 2019, 2025 (Supp.II) OLR 938 ↩︎
20. This is consistent with OHC’s previous judgement in Basanti @ Basantirani Jena v. State of Odisha, Odisha (2016 (Supp-1) OLR 529). ↩︎
21. Rule 4-A(2) of OHRE Rules, 1959, OHRE Act, 1951 ↩︎
22. Shree Jagannath Deb, Puri v. State of Odisha & Ors., W.P.(C) No. 24937 of 2024, Orissa High Court, 2025 (I) OLR-195 ↩︎
23. Amaresh Das v. State of Orissa & Ors. (WP (C) Nos. 15022 & 15020 of 2022) ↩︎
24. Sadhabani Dei v. Pranakrushna Mishra, S.A. No. 244 of 1995, Orissa High Court, 2025 (Supp-II) OLR-542 ↩︎