Property Buyer and Consumer Relief under RERA against Builders for Real Estate Dispute

RERA, Real Estate Regulatory Authority popularly known as RERA is a newly implemented law – THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 to ensure sale of plot, apartment of building, in an efficient manner and to protect the interest of consumers in the real estate sector. It also ensures a dedicated and speedy redressal mechanism.

What is the purpose and why did it come to place?

The act proposes and aims to create transparency in the real estate related transactions and to safeguard the consumer’s interests. This act is applicable to all the states within India excluding the  state of Jammu & Kashmir. To ensure a speedy dispute redressal mechanism.

Why do you need a lawyer for filing a Complaint?

A well drafted complaint can make your respresentation stronger and can help the tribunal to undertand your grievances better. A lawyer always ensures that during the drafting as well as the argument stage the content of the complaint, legal grounds and the arguments are enunciated in a manner which makes your case stronger and clearer. The complainant might not be able to do the same themselves and hence they need a lawyer to represent their case.

When can you file a complaint?

Any homebuyer who seeks redressal for their grievances are welcome to file a complaint with the RERA. The problems which a homebuyer generally faces with the builders are as follows:

1. Delay in delivery of possession of the property

2. Mismatch in the guise of floor area & carpet area

3. Misrepresentation of design and construction parameters

4. Malpractices like improper amenities, ceiling leakage, improper drainage system, incomplete fire safety system, low quality of electrical wiring, improper water provisions.

5. Not providing occupancy certificate, or

6. any other deficiency in service

If one is facing, any of the abovementioned grievances, they can easily approach the forum to seek redressal.

Who can file a complaint with RERA and against whom can the complaints be filed? 

Any aggrieved home buyer or the consumer under the ambit of RERA can bring a lawful suit against the developer or the promoter.  The documentary procedure to file a complaint is represented below :

How can we file a complaint with RERA?

Filing complaint before Adjudicating Officer of Regulatory Auhtority

Duly filled “Form M” along with a fee of Rs. 1,000 paid using a demand draft payable where the seat of the said Regulatory Authority is situated[3].

Filing an appeal before Appellate Tribunal

Attested true copy of the order  alongwith duly filled “Form L” along with a fee of Rs. 1000. The composition of the authority is :- Chairman + 3 members ; Chapter X of the act.

How is the interest to be paid calculated in RERA matters, as per the RERA guidelines? 

Instead of an algorithm or a calculation on the rate of interest to be charged under the RERA guidelines, it is rather fixed and changes as per the SBI rate.

Approximate Rate of Interests :-

State Bank of India Prime Lending Rate plus two percent (paid by the promotors and the allottee).

How is the interest calculated when there is already a clause for liquidated damages, in the Agreement to sell between the parties.

It is the duty and obligation of the promotor/developer to obey and be governed by the terms and conditions of the agreement signed by him/her in lieu of the sale of the said apartment. Failure to obey such terms will make him liable for an action under the RERA act. Meaning thereby, that the sale agreement terms will take precedence over the default conditions set under the law until and unless the agreement stands in contravention to the RERA act.

How to determine the jurisdiction while filing the complaint?

Filing a complaint under RERA is governed as per the simple Civil Procedure code concept of Territorial Jurisdiction i.e. to be filed before the adjudicating officer of the area where the project/home lies or where the cause of action arose.

GST for Real Estate in India

GST for Real Estate

Akin to the country’s first Jawaharlal Nehru who had given the ‘Tryst with Destiny’ speech at the stroke of midnight on August 15, 1947, the current Narendra Modi government also chose the midnight of June 30 to have a tryst with GST.

Real estate sector being the most pivotal ranks second just behind agriculture.

GST shall bring a lot of transparency in the real estate sector and minimize unscrupulous transactions. 

Now whether this benefit gets passed on to the end-consumer is unsure as pricing of real estate is driven by market forces than on costing principles.

Effective GST rate on under- construction real estate projects will be 12 per cent only.

The government had hiked the GST rate for the construction sector to 18 per cent from 12 per cent but removed land value from computation of tax liability.

According to Finance Minister Arun Jaitley, the products placed under the 28 per cent tax slab would not adversely impact the lower or middle class. 

Cement will be taxed at the rate of 28% under GST. It is higher the current average rate of tax around 23-24% but a lot of additional taxes charged over the average rate would be subsumed under GST.  Iron rods and pillars used in the construction of buildings is charged at the rate of 18% which is similar to the current average rate of 19.5%.
Bricks used in the construction of buildings and houses is taxed under GST at the rate of 28% except for the rate of ceramic building bricks which is kept under 5%. Currently, all bricks except the ceramic bricks are charged an average tax rate of 25-26% inclusive of all state and central level taxes. Logistics cost of transportation of bricks, cement or iron is going to reduce through the subsuming and streamlining of taxes

There is an positive & more sort of initial opening bumper for the reformative Modi Government when the
Stock Exchange Markets Hit Bright Spot.
The Stocks Opened at Above 31,000 on Monday 3rd july due to overall global appreciation of Modi Govt GST by Foreign Finance Index of Asian, US & European Countries claiming that no modern government in the entire World could ever be as bold as ours.

But, the procedures of filing returns in new GST regime are bound to be cumbersome, with businesses expected to file at least 37 returns in a year. This will be multiplied several times depending on the number of states in which one is transacting a business. 
Although this cannot be deemed simple in any sense of the term.
But, its true that,
Developers/Builder’s and Contractors would reap the benefit of many taxes which will be subsumed by GST.

Conclusively saying, there is going to be a substantial benefit from GST as it will bring a lot of required transparency and accountability. 

Do celebrities owe us a duty for the claims they make in advertisements?

Celebrities owe us a duty for the claims they make in advertisements

The favourite midnight snack of many, Nestlé’s Maggi has been banned by the Food Safety and Standards Authority of India (FSSAI) because of problems associated with the quality and labelling of the product. The notices issued to various celebrities who had been endorsing Maggi noodles and the orders for lodging FIR against them have reignited an extremely important legal debate concerning the liability of celebrities for the product endorsements they make. This article discusses the duty of celebrities for their endorsements, relevant laws in India and the precedents in some other countries.

Making a case for celebrity endorsement

There are many questions which crop up when we seek to make celebrities liable for their claims in advertisements. First among them being do the people actually believe in the claims celebrities make? Are the products bought because of endorsements or are they bought first and endorsements only reassure the consumer? Well, there is no straitjacket formula to these questions unlike believed by some. It certainly depends on “the context, the product or service endorsed, the expertise of the celebrity in that area, the mass appeal of the celebrity and the reliance of individual consumer”. This brings us to a more nuanced argument. Does the fact that celebrities have a right to publicity which they harness economically while advertising, impose a duty on them to not use this right in a manner detrimental to the general public? Or since the celebrities have a right to publicity, the audience has a reciprocal right of reliance? After all, unlike the movies, the fact that the plot and characters are fictional is never reflected/shown in an advertisement. In fact the representations made by the likes of Ms. Padukone are a “cause in fact” of the pecuniary loss to the consumers to the extent of the difference between an effective gym equipment for losing one’s weight and the Kellogg’s Special K. Similar arguments can be made for every misleading advertisement. Some make a superficial distinction between the celebrities giving personal testimonies versus the celebrity playing a role in the advertisement, for instance Ms. Dixit is playing the role of a mother in the Maggi advertisement. It is argued that a celebrity should be liable only when (s)he is making a personal testimony and not when (s)he is playing a role of another. However, it is extremely difficult to accept this difference. Audience generally does not think this way when relying upon the claims. Further, as stated above, unlike films, the fictional and impersonalized role is not emphasized in advertisements, thus making no space for this argument. Another argument put forth by the people disagreeing with making celebrities liable is based on the fact that celebrities have to no way in which they can identify the truthfulness of the statement which they are made to say in the testimonial by the ad-gurus. However a simple counter to this is requiring celebrities to test, try and experiment the product to find out. Similar has been legislated upon in various countries as we will see in the next section. While this may sound a little far-fetched in the case of Maggi noodles, after all, checking the amount of lead is the duty of the FSSAI and not Ms. Dixit’s and every single pack can certainly not be checked by the celebrities, yet celebrities can certainly be made liable for making sweeping claims like a person drinking Drink X can grow twice as taller as (s)he would grow drinking Drink Y (the ad for the health drink Complan). Therefore, there remains a strong case for making celebrities liable.

What are our neighbors and partners in trade doing about it?

In the USA, the Federal Trade Commission Guidelines prohibit deceptive and misleading endorsements by celebrities and make celebrities liable for the same. The endorsers are required to reflect their “honest opinions, findings, beliefs, or experience” in the advertisements. In fact, the advertisers can continue to use the endorsements only as long as the advertiser has a good reason to believe that the endorser continues to remain a bona fide user of the endorsed product. In Europe, the celebrities follow a self-imposed code whereby they refrain from endorsing products harmful to the health of the general public like alcohol, medicines etc. Korea on the other hand has an Advertising Self-regulation Institution which issues guidelines with respect to endorsements and reviews the endorsed advertisements making false advertisements a rarity. Among our neighbors, China makes the endorsers jointly liable with the service provider for the harm caused by the product. Pakistan also has laws forbidding false and misleading advertisements, however it is uncertain whether these laws will also include liability of celebrities for their endorsements. The Malaysian Code of Advertising Practice requires that the endorsements or testimonials contained in advertisements should be based on genuine experience of the endorser over a period of time. Malaysia also has special guidelines for “[p]ersons, characters or group who have achieved particular celebrity status with children”. These celebrities are forbidden from promoting food or drinks in a manner that may undermine the need for a healthy diet however the endorsers are not liable for the same since sanctions are in the form of “withholding of advertising space from advertisers and the withdrawal of trading privileges from advertisers/ advertising agencies”. Singapore has similar laws  relating to false advertisements and is also cogitating to put into place specialized guidelines pertaining to children. In Japan on the other hand celebrities participating in false endorsements are made to apologize publicly. This harms the reputation of the endorser decreasing the employment opportunities of these people, forcing celebrities to refrain from making claims with regard to the quality or effectiveness of a product.

What is the law in India?

Section 24 of the Food Safety and Standards Act, 2006 puts restrictions on misleading advertisements. It states, that “no person” shall be allowed to engage in misleading representation concerning the “standard, quality, quantity or grade-composition” and “need for, or the usefulness” of a food product. (S)he should not make any statement which “gives to the public any guarantee of the efficacy [of the product] that is not based on an adequate or scientific justification thereof.” Section 53 of the Act describes the penalty for such false advertisements which can extend to ten lakh rupees. This penalty applies to “any person” and hence should ideally include the celebrities; however there is no case law to support this proposition. The Central Consumer Protection Council (CCPC) has also decided to issue specific guidelines to this effect after the MP High Court directed to set up an advertisement monitoring panel as per the Vibha Bhargava Commission. These guidelines if enforced will allow consumers to claim compensation from celebrities for misleading claims made regarding a product, recklessly or with knowledge that the claim is false.

Conclusion

The case for celebrity endorsement is a strong one considering the status which is accorded to the claims made by these stars and the money which is used in these endorsements. This has been understood across the world and many countries have laws to the effect of punishing celebrities for misleading claims. Indian laws are also developing in this regard and stars in India are becoming more aware with respect to the duty they owe to their fans. For instance recently Amitabh Bachchan stopped promoting Pepsi after a young girl questioned him as to his reasons for endorsing Pepsi which her teacher had termed as poison.

By Ayushi Singha

Role & Duties of RTA Towards Investor, Distributor and MF Houses

Maintenance of records of investor’s transactions holds utter value for any mutual fund house because that should be as accurate and as updated as investors expect it to be. If the contrast of this happens, that puts a big question mark before the work and reputation of mutual fund houses.

So, for the professional and errorless management of such records of investor’s transactions, Mutual Fund Houses appoint an intermediary -Registrar and Transfer Agent, who can carry out such tasks on its behalf.

RTA refers to a regulatory body who takes on the responsibility to upkeep records of investor’s transaction, update their personal information, notify them about the latest offers & schemes and so on to aid mutual fund house. At the same time, it facilitates investors as well.

Why Registrar and Transfer Agent (RTA) has become a must-have for any mutual fund house as well as for investors

Registrar and Transfer Agent (RTA) upkeep transaction records, issue or revoke certificates, takes care of emails & messages, deal with client’s queries, resolves investor’s issues like damage or stolen share certificates and so on.

Alongside the same role, RTA takes care of the timely payment of dividend to the investors, the conduct of mutual funds, maturity dates along with other factors of investors’ interest and ensure that monthly investment statement is accurate with correct details about the units, dates, etc.

Transactions, like buying, selling and switching of shares, are carried out by investors frequently with the help of RTA. Registrar and Share Transfer Agent notifies the investors about profitable schemes and offers and also guide them to make investments that would reap financial benefits. The whole process of investment or transaction that involves an array of activities like filling of the form, buying & selling of shares become as simple as icing on the cake with the help of RTA.

Registrar and Transfer Agent Services to Mutual Fund Associates

The role of a Mutual Fund whirls around its Distributors, Investors, Mutual Fund Company.

Distributors

The distributor refers to an individual or an organisation which educates investors about investment schemes with maximum interest for him/her after due analysis of various investment plans and investor’s risk profile and the congeniality among the two. When a distributor sells a mutual fund to the investor, he gets his commission on profit.

Role of RTA: Registrar & Transfer Agent provides necessary documents and materials like application forms to the distributor which he needs to facilitate the investors to make mutual fund transactions. Besides, RTA also releases distributors sales statements in a respective month.

Investors

Investors are those individuals who are capable of or are willing to make investments in the mutual fund houses by buying securities, bonds and shares. Investors have a sole intent to earn profit from investments made in mutual funds. 

Role of RTA: RTA Agent apprise the investors with the latest investment schemes, maturity dividend payout and other important updates. RTA also makes sure that dividends are distributed to the investors on time and also aids them in executing mutual fund transactions.

Mutual Fund Companies

A mutual fund house or MF company refers to the financial institution which collects money from potential investors and puts it in securities, shares or bonds. Such financial entities work intends to yield substantial profit for its investors in the future dates. 

Role of RTA: RTA Services proficiently maintain the records of investor’s transactions along with other details on behalf of investors. RTA fulfils the multiple needs of mutual fund houses through its diversified branches at different places. This ultimately saves time, efforts and resources of mutual fund houses which can be invested in other more productive tasks.

 Registrar & Transfer Agent provides tailor-made solutions to the mutual fund houses that leave nothing to seek more. In the digital era, every task happens digitally backed by digital communication which has knocked off the need to set up a branch of MF house nearby RTA office.

By Sag Rta

Procedure for Selling a Property, Flat

Every owner of a property has three basic rights in his property which are, firstly, the right of ownership which means that he has the title to the property, secondly, that he has the exclusive right to possess and enjoy the property in any lawful manner he wishes and thirdly, he has the exclusive right to alienate the property, i.e. he can part with the property whenever he wishes in any manner that he likes. Thus, with all these rights, a person becomes the “absolute owner” of the property.

Selling a flat has become an uphill task for many sellers and owners. The very first thing to consider, while selling a property in the real estate market, is to make a proper valuation of the flat to be sold. A seller can either self-assess his property or resort to an external source for determining its worth. The prevailing market rate in the locality where the flat is located can be informally enquired about in the vicinity.The important step, while selling a flat is to find a prospective buyer. It is important at this stage to check the credentials of the buyer in terms of his background, financial capabilities and reliability.

Another important step is to obtain, the consent and /or permission, i.e. the No Objection Certificate (NOC) of various authorities such as the, (a)Society (b)the income tax authority (c)Municipal Corporation (d)the competent authority under the Urban Land Ceiling and Regulation Act (e)any other authority.[i]

After these steps comes a vital stage which is that of documentation of the various necessary legal documents. It is extremely important these days, given the fact that many disputes with regard to fraudulent transactions that have started to arise, that both the sellers and the buyers have the necessary legal documents before they complete their dealing.

The following documents are necessary to be there in order to sell a flat/property:

Letter of allotmentIt confers the allotment of the property to the seller who had originally purchased the property from the relevant society or authority.

Previous Sale Deeds– The original sale deed from the previous owners of the property is needed. This traces the ownership of the property that is being sold/ bought. A property with clear documentation and title commands a higher price in the market. The chain of previous agreements with past owners in original with original receipts of registration or the original letter of allotment issued to the first owner by the development authority is important. Flat seller should have an original sale deed while selling the property. The seller needs to register the original deed from the registrar (i.e. the original deed that had been registered by the registrar) and give out a copy of the sale and the receipt from the sub-registrar.Giving a copy of this will trace the ownership of the property and in case there are few documents missing, the property seller can be alerted instantly. It is mandatory under law that the current owner should have the previous agreements with him as well.

Sanctioned plan– A copy of the approved building plan and occupation certificate issued by the competent authority, which is essentially the local body/ municipal authority of the particular state or city [for e.g. In Delhi, it would be either the DDA (Delhi Development Authority) or NDMC (New Delhi Municipal Council), depending on the area where the flat is located] is another relevant document.

Encumbrance[ii] certificateThe encumbrance certificate is used in property transactions as an evidence of free title. A seller must ensure that the property he intends to sell has a clear and marketable title, so that it can fetch him a higher market price.

Sale Deed/ Agreement

Once the documentation is cleared, the parties can then enter into an agreement to sell and confirm the terms and conditions. After this, they can start preparing the sale deed. Agreement to sell precedes execution of a sale deed. The subsequent sale deed is based on the agreement to sell. This agreement is also signed and executed between the seller and buyer on a non-judicial stamp paper.[iii] After the complete documentation clearance, the buyer and the seller should sign an agreement stating the sale and confirmation of the property along with terms and conditions. This document also mentions the terms and conditions and the sellers intentions of selling away his property.[iv]

[i]Checklist for selling property, whether residential or Commercial, available at: http://www.propmart.com/faqs/faqs.asp?FAQNum=177, last accessed on 6th January, 2015.

[ii]The word “encumbrance” essentially means and sort of burden or impediment that flows with the flat/property. For example, it could either be a mortgage on the flat or any legal dispute that is going on with regard to the flat/property. An encumbrance certificate thus ensures that the property/ flat is free from any sort of monetary or legal liabilities and the title and ownership can be passed to the buyer.

[iii]Documents you need to have in order while selling property, available at: http://articles.economictimes.indiatimes.com/2012-04-07/news/31304922_1_sale-deed-encumbrance-certificate-sale-agreement, last accessed on 7th January, 2015.

[iv]What are the main documents to sell a property, available at: http://www.commonfloor.com/guide/apartment-society-what-are-the-main-documents-required-to-sell-a-property-17413.html, last accessed on 7th January, 2015.

By Aditya Marwah

FAQs: Registration of Property


The registration of property that is land, flat, shop, garage or other things are mandated by the three laws such as Transfer of Property Act 1882; The Indian Contract Act 1872; The Registration Act 1908; Hindu Succession Act 1956; Indian Succession Act 1925 and such other municipal laws, local laws and bye laws.

One should be aware that whenever someone purchases any immovable property[1] (like, land, building etc and not tractor, gold etc) which is valued at or above Rs. 100, he would have to get such a property registered with the local registration office. It is easy to locate the local registration office for this purpose-the municipal corporation within which the buyer resides would be considered as the right place.

The buyer has to appoint an advocate for carrying out the registration of his property[2]. Though a buyer can get the property registered with the local registry office[3] also he can register any property situated in the State of West Bengal at ‘The Registrar of Assurances” situated opposite to the Governor house in Kolkata.

The buying and selling of such immovable property is considered legal when an “agreement of sale[4]” is drawn up. Such deed of sale must contain every minute particulars[5] relating to the property. For instance in case of sale of a flat by a promoter to an individual buyer the deed of sale should lay down specific details like: the material used to do the flooring (Mosaic or marble or tiles) the material used to make the walls, the kind of doors (Iron gates or steel gates) installed; the kind of water facilities installed; the percentage of common area that comprises the stair case, terrace lift, water tank, reservoir.

Note here, that many a times promoters try to get away with delivering less services than what is expected of them. Usually a small clause is put into the agreement which puts the liability of construction of “better reservoir facilities” upon the buyer on the payment of an extra fee. It is better for the buyer to be cautious of such clauses and ensure that every tiny details such as these is notified explicitly in the contract. This would give the buyer the right to sue the promoter for specific performance of the suit if the latter doesn’t keep to his promise.

The deed of sale must also contain the method (cheque, cash, demand draft) and the amount of payment that is to be made by the buyer. A payment schedule contains these details.

The buyer usually pays[6] the per sq. ft. rate based upon the total area (i.e. super built up + carpet area). Now, super built area is calculated upon other amenities provided in the complex in which the building is located. For instance, if the promoter provides common facilities like lift, swimming pool etc then the super built area is calculated as 25%-30% (depends on the construction manifesto) of the Carpet Area. Whereas if these common facilities are non existent then the super built area is calculated at 20% of the Carpet Area. Do check the construction manifesto carefully to know the exact percentage that applies to you.

For eg., If an apartment has a common lift; and the carpet area purchased is 600 sq. ft.—the super built up area would be (25/100*600=150 sq ft). In other words the buyer would have to pay to the seller a total amount on the total area of 750 sq ft (600+150 = 750 sq. ft).

            Steps for registration:

The first thing the buyer must do is engage in the process of searching the property (be it a new property or an old property). Searching has to be done before agreement of sale is drawn up between the parties. This helps in identifying possible sales that a fraudulent promoter could have engaged in. This is a critical step in the process of buying and registering a property, since there are abundant cases pending before the court where the same property has been sold to more than one parties.

The buyer has to pay the stamp duty upon the market value which is obtained from the registration office after submitting the details of the buyer and seller along with the sale agreement. Incase the property is located in one of the places where the land was given as refuge land, then the photocopy of the mother deed of the land would be required. This process is called obtaining the valuation/query[7] of the property. This is primarily a clerical work and the buyer can himself visit the registration office and get it sorted.

The query takes about three working days. After this the same has to be handed over to the advocate for preparation of the draft of the registration/conveyance deed.

The query obtained shall contain terms such as, market value, set forth value, stamp duty, registration fees etc. The amount of fees is calculated upon the market value. An additional 1% is charged if the market valuation exceeds 25 (twenty five) lakhs of rupees. Now there are two types of fees:- registration fees and stamp duty which the government receives when a property is sold/brought. The registration fees has to be paid in cash to the office and the stamp duty has to be paid by demand draft by the buyer. The Stamp duty can also be paid through electronic transfer such as NEFT. But if the buyer wishes to make the payment through the NEFT facility he would have to ensure that the payment is made within 30 days from the date on which the query/valuation of the property is procured. Whereas if he chooses to pay by a demand draft he would enjoy an extra buffer period of 14 days (the time period for payment through demand draft is 44 days). The deed of conveyance has to be printed on a stamp paper. Such stamp papers come in various valuations: like Rs. 500, 1000, 5000[8].

The procedures in between the registration date and submission of the documents in the registration office for registering the property involves making what is popularly called “volumes”. In a crude sense, volumes refers to “big green official papers” where every minute details of the property is recorded, including the names of old buyer and new buyer and such other details which the office intends to record. This is not something a buyer should be concerned with. It is primarily the duty of the advocate engaged for this purpose.. For example: If the market value of the property is 45 lakhs, then the fees is calculated @8.2 % of 45lakhs. The amount arrived at would be termed government fees. The buyer other than this has to pay the fees of the advocate which ranges from 0.5 to 1 or up to 2%. The advocate’s fees is steep when he seeks to take up additional tedious responsibilities like sorting of the following things on behalf of the client like— obtaining the query, drafting and typing the deed; paying the volume fees, the clerk fees and such other fees as is required. For more information you can visit: http://www.wbregistration.gov.in/(S(ddoa4qstlcfmlrx0awcygsyk))/Stamp_duty.aspx

The buyer is given the opportunity to propose a desired date for the registration of the property. If the office agrees to that date, the buyer has to be present at the registration office along with the seller, witness, landlord and such other persons as is required by the said office. There are two witnesses (each from the buyer and the seller) required to be present for the process of registration. The new regulation of obtaining[9] the query requires the seller to give the name of a person (known as the ‘identifier’) and his details who has to be present on the day of registration.

For those of you who find the above process (of visiting the registration office) cumbersome, there is another option called “commission[10]”. If you avail of this option, on payment of an extra fee, you could get the registrar and his staffs to come over to your place (the new property) to complete all the formalities of registration.

After the completion of the registry the buyer has to usually wait for one month to receive the original registry deed. This usually depends upon the functioning and efficiency of the registration office. But once the buyer gets the original deed of the property, he can keep it with himself. There is no legal requirement for him to deposit the deed at any government office. The position would however slightly change if the buyer seeks to obtain a loan from a bank against this newly purchase property. He would then have to deposit the original deed with the bank as a security.If the buyer loses the original deed of the property, he could get hold of a duplicate copy of the same after having registered an FIR/GD[11] and paying the required fees. This is possible because the buyers’ lawyers usually makes a photocopy of the original deed and keeps it in the office. Though this is not something that the buyer should be concerned with, it would be good for him to confirm with his lawyer if the same has been done.

 After the completion of the process of registration, the buyer has to initiate the process of mutation[12]. Mutation essentially is the process that allows you to pay property tax to the government. Every year a bill is sent from the municipality/corporation or sometimes one has to go to the municipality himself and pay the tax on a yearly or quarterly basis.

The buyer should ensure before making the final payments for the purchase of the property if the promoter has complied with all the promises he made regarding construction of the apartment. Do note that a part of sum can even be paid later[13] even after the completion of the registration process (this all depends on your negotiating abilities).

Upon taking delivery of the flat the buyer must obtain the NOC[14] and possession letter from the promoter and be verify if there are any pending taxes required[15] to be paid by the promoter. If the buyer does not get this clarified, and if there is tax amount due, upon possession of the apartment, the entire liability of payment of the taxes would shift from the promoter to the buyer.

There is a possibility of the promoter requiring you to engage the services of his designated advocate and telling you how that is a mandatory requirement under law. He could also that that it is important to do so in order to avoid potential legal problems pertaining to the property. Do note that there is no such limiting clause placed upon the buyer by law. The buyer can very well appoint his own personal Advocate for carrying out the work.

Also remember to inform your advocate who handles your income tax returns about the purchase/sale of any immovable property. If you don’t, you could fall on the wrong side of the law. The details of buying/selling of properties in a year has to be informed to ones’ income[16] tax advocate also so that it is recorded in the balance sheet[17]. It is advised that the buyer seeks the assistance of his advocate while choosing the mode of payment for the property (cheque, cash, demand draft etc).

There could be other smaller aspects (not covered in the blog post) involved in the purchase and sale of property. It is best to seek the assistance of a real estate and tax lawyer for the same before venturing out in the buying and selling of immovable property.

There are a couple of other things that you need to be aware of to avoid yourself from landing in any unpleasant situation are as follows.

A.There is a possibility of the promoter requiring you to engage the services of his designated advocate and telling you how that is a mandatory requirement under law. He could also that that it is important to do so in order to avoid potential legal problems pertaining to the property. Do note that there is no such limiting clause placed upon the buyer by law. The buyer can very well appoint his own personal Advocate for carrying out the work.

B.Also remember to inform your advocate who handles your income tax returns about the purchase/sale of any immovable property. If you don’t, you could fall on the wrong side of the law. The details of buying/selling of properties in a year has to be informed to ones’ income[1] tax advocate also so that it is recorded in the balance sheet[2]. It is advised that the buyer seeks the assistance of his advocate while choosing the mode of payment for the property (cheque, cash, demand draft etc).

There could be other smaller aspects (not covered in the blog post) involved in the purchase and sale of property. It is best to seek the assistance of a real estate and tax lawyer for the same before venturing out in the buying and selling of immovable property.

 Photo Courtesy: https://www.google.co.in/search?q=registration+of+property&biw=1366&bih=612&source=lnms&tbm=isch&sa=X&ved=0CAgQ_AUoA2oVChMI9Jz857LhxgIVEAeOCh3J6wWR#imgrc=QDllZFitT-0zHM%3A

http://www.covermiles.com/investment/property-registration-points-to-remember/

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[1] Section 139(1) of Income Tax Act.

[2] Section 139(1) of Income Tax Act.

[1] Part III OF REGISTRABLE DOCUMENTS u/s 17: Documents of which registration is compulsory of The Registration Act available at http://dolr.nic.in/acts&rules/registrationact(1908).htm .

[2] Hiring an Advocate is necessary as the ‘deed of conveyance’ (the official sealed and stamped document which you receive from the registration office basically saying you are the new owner of such and such property) has to be prepared based upon the agreement of sale and other documents available with the buyer and such work is entirely based upon the legal frameworks such as the present laws and other norms that have to be compiled with. The advocate also studies the agreement of sale in case of purchase of new flat and in case of resale he checks the present conveyance deed. It is prudent to allow the advocate to oversee all the above issues and avoid the possibility of incorrect statements.

Depositing the fees can also be technically done by the buyer himself but since an advocate is a regular visitor of the court, adept at handling such issues on an everyday, it is advisable that the buyer employs the services of an Advocate to check the veracity of receipts and vouchers involved in the transaction.

[3] Part V and XI of the Registration Act 1908.

[4] – Section 54 of Transfer of Property Act.

[5] Terms of contract which has been agreed between the parties under the Contract Act Indian Contract Act 1872.

[6] Municipal laws Kolkata Municipal Act, West Bengal Land Reforms Act 1955 Laws; West Bengal Premises Tenancy Act, 1997; West Bengal Estate Acquisition Act, 1953.

[7] Mainly known as the e-assessment slip issued by the Directorate of Registration & Stamp Revenue covered under PART XIII: OF THE FEES FOR REGISTRATION, SEARCHES AND COPIES under section 78 of the Registration Act.

[8] Please note that only the first page has to be purchased for such cost which is known as the stamp paper. (the other pages of the deed of conveyance are the regular green legal sheets)

[9] The office of the Registrar of Assurances Kolkata has been computerized, which now mandates supplying every minute details of the property, buyer, seller, identifier along with bank details.

[10] Section 33 and 32 of the Registration Act 1908.

[11]– Depending on the quantum of the property in question the police registers a case of FIR or GD. Both of them are valid under law

[12] Mutation of Names in the R.O.R.s (Record of Rights) under section 50 of WBLR Act, 1955 available at http://banglarbhumi.gov.in/banglarbhumi/(S(mgexizvmyggg0dvngwnh4tji))/ASP%20PAGES/lr_mutation.aspx.

[13] It can be treated as due diligence of the buyer referred under the terms of the contract which has been agreed between the parties in the agreement of sale.

[14] The is the duty of the promoter to handover the NOC and Possession certificate upon completion of payment but the buyer should be aware that he needs to receive the documents before registration is completed.

[15] The buyer before buying any property should ask for the latest tax receipt paid buy the present owner/seller. The same can be verified in the local municipality office.

[16] Section 139(1) of Income Tax Act.

[17] Section 139(1) of Income Tax Act.

Constitution: The Procedure To Change Your Attorney In The Middle Of The Case

Right to justice is one of the fundamental rights and one of the primary rights of any individual. The Preamble to the Constitution of India guarantees to all citizens, social, economic and political justice. One of the prime objectives of the Indian Judicial system is to ensure that justice is given to all. The most important players of this system among others are the Judges and advocates; one who decides and one who helps the people to get justice. Advocates, in addition to being independent professionals, are also officers of the Courts and play a vital role in the administration of justice. Accordingly, the set of rules that govern their professional conduct arises out of the duty that they owe to the Court, their clients, their opponents and fellow advocates.[i]

The professional standards that an advocate needs to maintain are mentioned in Chapter II, Part VI of the Bar Council of India Rules. These rules have been placed under Section 49(1)(c) of the Advocates Act, 1961. Under Rules on ‘An Advocate’s duty Towards the Client’ following practices are mentioned:

  • An advocate is bound to accept briefs
  • An advocate should not to withdraw from service
  • An advocate should not appear in matters where he himself is a witness
  • An advocate must make full and frank disclosure to client
  • A advocate must uphold interest of the client
  • An advocate should not suppress material or evidence
  • An advocate should not disclose the communications between client and himself
  • An advocate should not be a party to stir up or instigate litigation.
  • An advocate should not act on the instructions of any person other than his client or the client’s authorised agent.
  • An advocate should not charge depending on the success of the litigation
  • An advocate should not receive interest in actionable claim
  • An advocate should not bid or purchase or transfer property arising out of legal proceeding
  • An advocate should not adjust fees against personal liability
  • An advocate should not misuse or take advantage of the confidence reposed in him by his client.
  • An advocate should keep proper accounts and not divert money from accounts
  • An advocate should intimate the client on amounts
  • An advocate should adjust fees after termination of proceedings
  • An advocate should provide copy of accounts
  • An advocate should not enter into arrangements whereby funds in his hands are converted into loans.
  • An advocate should not lend money to his client
  • An advocate should not appear for the opposite parties

If an advocate fails to fulfil any of the duties towards his/her client or the performance of the advocate is not satisfactory to the client, the client can at any point of time prior to the ending of the case, change his pleader for any reason. The client can take such a decision for whatever reason; because even though the client hired the services of a professional, he/she is still ultimately responsible for his/her own legal affairs. If there is reason to believe that, there is a problem one needs to speak up and take responsibility for fixing it.[ii]

This absolute right remains even if the advocate has rendered valuable services or the client owes the advocate his fees. Although a client does not need to have a reason, common circumstances for changing an advocate include[iii]:

  • An advocate’s conflict of interest
  • Differing case strategies or personality conflicts
  • A change in the pleadings or parties of the case
  • A change of the Court hearing the case
  • Expanded legal needs which the advocate fails to fulfil

When an advocate is appointed by a client for a certain case under Order 4 of Civil Procedure Code, 1908 the pleader has to file to the Court a duly signed written document by the client, which is termed as a Vakalatnama. In case a client is not satisfied with the lawyer, then first, the client should discuss it with the lawyer, and resolve the issue amicably. If it is not resolved then he might ask for a No Objection Certificate (NOC) on the Vakalatnama or on other documents related to the case. This is an easier way. But in case the advocate does not agree to give a NOC, then the person can issue a notice of termination to the advocate and apply to the court for withdrawal of Vakalatnama. Order 3 of Civil Procedure Code gives aggrieved persons the right to choose one’s pleader. Therefore changing of pleader with the leave of the Court is possible. The new pleader should submit a duly signed Vakalatnama to the court. Hence it is possible to change one’s pleader. In a few cases problem arises with the case history. If the pleader fails to give it to the client, the client can apply for the order sheet by an application to the Court.

Though right to justice is guaranteed by the Indian Constitution; way to justice is to be made by the person seeking justice. Hence, although the pleader is going to appear before the court the full responsibility rests on the instituting or defending the suit or criminal proceeding. Therefore, if the appointed attorney is not fulfilling the purpose then the client can at any

[i] http://www.barcouncilofindia.org/about/professional-standards/rules-on-professional-standards/

[ii] http://research.lawyers.com/replace-a-lawyer.html

[iii] http://research.lawyers.com/changing-attorneys-mid-case.html

By Shruti Das

Executability & Enforceability of Foreign Judgments and Decrees in India

Foreign judgments and decrees simply connote a final adjudication on a point of law by a court situated outside the territory of India or simply not coming under the authority of the central legislature. The executability of foreign judgements in India is governed by The Code of Civil Procedure 1908 (CPC). Various sections under the code govern the executability of the foreign judgements such as Section 13, Section 38, Section 39, Section 40, Section 44-A and Section 45.

For the purpose of enforcement, foreign decrees have been classified into two classes: one from the reciprocating countries and the other from the non-reciprocating countries. According to Section 44A of CPC a decree from a reciprocating country is directly enforceable in India as if it has been passed by the domestic country itself if the conditions laid down under Section 13 are satisfied.

Further a foreign decree of a non-reciprocating country can be executed by institution of a suit in the domestic courts. In the newly instituted suit the decree of the foreign court will be treated as another piece of evidence collectively with other evidence.

The list of reciprocating countries have been notified in the official gazette by the central government. However in both the abovementioned cases the decree has to pass the test laid down under Section 13 of CPC.

Thus the whole situation boils down to determining whether or not the foreign decree satisfies the conditions laid down under Section 13 of CPC.

According to Section 13 a foreign decree becomes inconclusive if:

  • It has not been pronounced by a court of competent jurisdiction.
  • It has not been given on the merits of the case;
  • it sustains a claim founded on a breach of any law in force in India.
  • it has been obtained by fraud.
  • the proceedings in which judgment was obtained are opposed to natural justice
  • it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of India in cases in which such law is applicable.

This article would discuss in detail these conditions along with decided cases of the Supreme Court and various high courts.

Firstly, coming to Section 13(a) under which it is laid down that if a decision of a foreign court is not pronounced by a court of competent jurisdiction it would not be enforceable. In the case of Moloji Nar Singh Rao v. Shankar Saran[1]the issue was, whether a foreign decree which was given ex parte can be executed in India. The Supreme Court pronounced that the decree cannot be executed in India due to the following reasons:

  • The respondents were not subjects of the foreign country.
  • They did not voluntarily appear in the court.
  • They did not contract to submit to the jurisdiction of the foreign court.
  • They were not the residents of that foreign country.
  • They were not temporarily present in that State when the process was served on them.

In another leading case R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar[2]the respondent alleged that since he was neither the resident of that foreign country nor had he submitted to the jurisdiction of the foreign court the decree should not be executed in India. The plaintiff claimed that the respondent was a partner in a firm which was located in the foreign country and thus the foreign court had the jurisdiction to try the case. The court held that it was the firm which had accepted the jurisdiction of the foreign Court, and the Respondent in an individual capacity, had not accepted the jurisdiction and thus the decree could notbe executed in India.

Further the Madras High Court in the case Ramanathan Chettiar v. Kalimuthu Pillai[3] had laid down certain circumstances wherein a foreign judgement could be applicable in India:

  • When judgements have been obtained against the concerned person on prior occasions in the foreign country.
  • When he is the resident of the foreign country in which the action had commenced.
  • Where the party voluntarily appears on being summoned
  • Where by an agreement a person has contracted to submit himself to the forum in which the judgment is obtained.

Thus these are basically the conditions which need to be satisfied fora foreign judgement to be executed in India.

Secondly, according to Section 13(b) of CPC if a foreign judgement is not given on the merits of the case then it cannot be executed in India. The fountainhead of all decisions under this head has been the decision of the Privy Council in the case of D.T. Keymer v. P. Viswanatham[4]. In this case a suit for money was brought against a partner of a firm in a foreign court. After this the defendants was asked to answer certain interrogatory questions. When he denied to answer these questions his defence was struck off and judgment was entered for the plaintiff without investigating into the claims of the plaintiff. The domestic courts in India held that the decree cannot be enforced in India as the foreign judgement had not been passed on the merits of the case.

Primarily courts in India take a very stringent view while enforcing ex- parte foreign judgements in India. However sometimes ex- parte judgements that have been passed on the merits of the case and concluded after engaging in proper investigation of the claims, have been enforced by the Indian courts.

For example in the case of Ephrayim H. Ephrayim v. Turner Morrison & Co.[5], it was held that where no defence is raised and only an adjournment is sought, and the request for adjournment is refused and the judgment is proceeded on the evidence of the Plaintiff, it cannot be said that the judgment is not on the merits of the claim. Therefore S. 13(b) of CPC will not be able to come to the rescue of the defendant.

Third, coming to Section 13(c) of CPC which states that if a foreign judgement is passed disregarding the Indian or International law then it cannot be executed in India. Avery interesting case in this regard is Anoop Beniwal v. Jagbir Singh Beniwal[6]. In this case the plaintiff had filed a suit for divorce in England on the basis of the English Act, that is the Matrimonial Causes Act, 1973. The petitioner’s complaint was that the behaviour of the respondent made it reasonably difficult for the former to cohabit with the latter- In India a slightly stricter ground than the one that was provided in the foreign judgment, was stated. The court held that the decision of the foreign court was not in contravention to the Indian law and thus enforced the decree.

Thus Section 13(c) primarily says that:

  • A judgment or decree passed by a foreign Court upon a claim for immovable property which is situated in the Indian territory may not be enforceable since it offends International Law.
  • A judgment/decree cannot be enforced in India, if a foreign judgement was rejected on consideration by a previous Indian court. However if the proper law of contract is the foreign law then this may not be applicable.

Further, according to Section 13(d) if the proceedings in the foreign court were opposed to the principles of natural justice then the foreign judgement cannot be executed in India. In the case of Hari Singh v. Muhammad Said[7]a foreign court failed to appoint a court guardian of a minor defendant and thus the domestic court did not execute the judgement saying that what the foreign court did was opposed to the principles of natural justice.

In addition, according to Section 13(e) if a foreign judgement is passed by a court due to the fraud played on it by the plaintiff then the judgement cannot be enforced in India.

In the case of Satya v. Teja Singh[8]the Supreme Court held that since the plaintiff had misled the foreign court about its non-existing-jurisdiction over the matter,-, the judgment and decree would be deemed to have been obtained by -fraud and therefore would be presumed to be inconclusive and could not be applied in India.

Thus it can be concluded that a judgment passed in the courts of a reciprocating country could not be enforced in India if it failed to satisfy the rules laid down under Section 13 of CPC. It can be seen that, the plaintiff has to come before the Indian courts to either get the foreign judgment executed under S. 44A or file a fresh suit for the enforcement of the judgement. Therefore by getting a decree in the foreign Court, the plaintiff only avoids the inconvenience of meeting the requirements under the law of evidence applied by the Indian Courts. But when he does not institute the case in India he runs the bigger risk of dealing with the difficulties of getting the foreign judgment executed in India under the stringent conditions of S. 13. Therefore it may be advisable for a foreign plaintiff to institute claims in India itself, in case the defendant is in India.

Photo Courtesy: https://www.google.co.in/search?q=foreign+judgments+enforce+india&biw=1366&bih=623&tbm=isch&source=lnms&sa=X&ved=0CAgQ_AUoA2oVChMIx9Kb4q2cxwIVzluOCh1MjA7T#tbm=isch&tbs=rimg%3ACXCYOK9_1Rdm1Ijj6IP4BB9AXGwdBffTeM3WItO-Q3j0cHcQZ6GlVly4fW03JiDnYhWWBO51Wf2kPyiGBJmgLgHyrsyoSCfog_1gEH0BcbEQ4UlB8Xx3onKhIJB0F99N4zdYgRRh-WNUZyKTQqEgm075DePRwdxBG22SOwxInYCCoSCRnoaVWXLh9bEdxX4o9peRRYKhIJTcmIOdiFZYERg94ZK_1zc8XYqEgk7nVZ_1aQ_1KIREC0QBoe2XX1yoSCYEmaAuAfKuzEQoBcyywZWZj&q=foreign%20judgments%20&imgrc=TcmIOdiFZYF59M%3A

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 [1] AIR 1962 SC 1737. It is a constitutional bench consisting of 5 judges. 

[2]AIR 1973 Mad . 141. 

[3]; Cf. Ibid. at p. 143 para 16. Also see Chormal Balchand Firm Chowrahat v. Kasturi Chand 

[4]AIR 1916 PC 121. 

[5]AIR 1930 Bom. 511 at 515 

[6]AIR 1990 Del. At 311.

 [7]AIR 1927 Lah. 200. 

[8]AIR 1975 SC 105 at p. 117 para 50.

By Karan Mittal