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RE Related Laws & New Developments

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  • Re : RE Related Laws & New Developments

    SC reserves order on transfer of land via 'will' route case

    According to the law, no person can become a farmer except through succession.Nikunj Soni | Ahmedabad Mirror | December 13, 2019, 12:00 IST

    AHMEDABAD: The Supreme Court has reserved its order after hearing of a longpending issue — whether transfer of agriculture land to a nonagriculturist by way of a will is legal or not — concluded on December 5. The issue concerns many in Gujarat as several agricultural plots have been transferred in the state in this manner to non-agriculturists, who became farmers by tilling such land or used it for realty development.

    According to the law, no person can become a farmer except through succession. However, transfer of land from farmers to non-farmers was rampant before the year 2000, thanks to lacunae in the law. Terming such transfers illegal, the government started issuing notices to beneficiaries, prompting a series of legal battles.

    In its order dated March 17, 2009, the Gujarat High Court had termed such transfer illegal. Subsequently, Bharuch-based Rajen Shah and over a dozen petitioners who had become farmers through wills, filed a plea in the SC challenging the HC order. There are more than 50 petitions pending in HC for a decade now.
    We have submitted to the Supreme Court that even if the high court order is upheld, the implementation of order should be with prospective effectNirav Thakkar, petitioners’ counsel
    Common practice in the past Experts believe that up to say 50,000 transfers may have taken place in the State in this manner in past three-four decades.

    Senior solicitor Paresh Jani said, “The Supreme Court will make interpretation of section 43 and 63 of the Bombay Tenancy Act, 1948, about the different ways of agricultural land transfers. There are up to 50,000 instances in the state where agriculturists have sold their land to third parties who were non-farmers.”
    Government should abolish the need for NA land permit where TP schemes have been proposed or finalised, as realtors face difficulties in obtaining NA permissionJaxay Shah, President, CREDAI
    A lot at stake

    Jani added, “People found lacunae in the law that enabled them to become farmers. After transfer of land ownership, the buyer becomes a farmer, or uses the land for a purpose other than farming, including building residences, industrial units or commercial complexes. Now, the land which was purchased years ago at a very cheap rate could be worth crores of rupees. If SC rules in favour of the government, there would be several litigations as structures built on such land would become illegal.”

    Nirav Thakkar, counsel for 12 persons who challenged the order, said, “We had challenged the HC order in 2009 itself, and the apex court had issued status quo. Now it has come up for hearing before a bench of the Supreme Court on December 3.”

    He added, “The Supreme court had heard our case and we concluded arguments on December 5. Now the court has reserved its judgment.”

    Regarding the arguments, Thakkar said, “We have submitted to the court that even if the high court order is upheld, the implementation of order should be with prospective effect as the practice (of transferring land ownership via farmer’s will to non-farmer) was common for decades. A drastic situation may be caused as constructions have already been made on such land in the state. A large number of people will suffer if order is given with retrospective effect.”

    The matter was heard before the bench of Justices U U Lalit, Indu Malhotra and A S Bopanna.
    There are up to 50,000 instances in the state where farmers have sold their land to third parties who were non-farmers and used it for pupose other than farmingParesh Jani, senior solicitor









    https://realty.economictimes.indiati...-case/72499975
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    • Re : RE Related Laws & New Developments

      Buyers file plea in SC challenging Insolvency & Bankruptcy Code amendment

      "The writ petition has been filed by 11 petitioners of 11 different projects being constructed by Pioneer Urban Land & Infrastructure, Emaar MGF Land, BPTP, Supertech, Ansals, among others," said advocate Aditya Parolia of PSP Legal representing the buyers.Ankit Sharma | ETRealty | Updated: January 06, 2020, 21:50 IST

      NEW DELHI: Home buyers have challenged the ordinance passed by the central government to amend the Insolvency & Bankruptcy Code (IBC) 2016. They have demanded stay of the operation of Section 3 of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 which seeks to amend Section 7 of IBC.

      "The writ petition has been filed by 11 petitioners of 11 different projects being constructed by Pioneer Urban Land & Infrastructure, Emaar MGF Land, BPTP, Supertech, Ansals, among others. The petitioners claim that they are aggrieved by the inactions of the developers and the arbitrary approach adopted in promulgating the ordinance titled Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019," said advocate Aditya Parolia of PSP Legal representing the home buyers.

      The ordinance is completely against the fundamental rights guaranteed to the home buyers (Financial Creditors) under Article 14 and 21 of the Constitution of India, said the plea.

      "The central government has brought in the ordinance with absolute discrimination by putting a precondition/threshold in the form of minimum number of allottees of a particular project required for filing an application for triggering the code under Section 7 of the IBC, which is not applicable to other financial creditors under IBC," said Piyush Singh, advocate, PSP Legal who is representing the home buyers.

      "The ordinance is contrary to the well settled principle as laid down in the Pioneer Urban Land and Infrastructure & Anr. v. Union of India and has rendered the said judgement ineffective," added Singh.

      According to the home buyers' plea, the time period of 30 days as specified in Section 3 of the ordinance is impossible for any individual allottee to gather so many financial creditors of the same project to meet out the minimum threshold.

      "The details of the allottees are never published on any website or public domain as the same is impermissible
      under the law to publish the details of the allottees in such public domain as the same would result in violation of their Right to Privacy as guaranteed under Article 21 of the Constitution of India," said Parolia.

      Also, section 3 of the ordinance on the face of it is violative of Article 14 as the threshold of minimum of 10% or 100 of the total allottees in a given project for filing an application under Section 7 of the IBC is only applicable to real estate allottees or other class of creditors and not for any other financial creditors, the home buyers said in their petition.













      https://realty.economictimes.indiati...dment/73127166
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      • Re : RE Related Laws & New Developments

        Allotment letter adequate proof of investment in flat: ITAT

        This decision is important as a taxpayer is entitled to a deduction from long term capital gains (LTCGs) made on sale of a house property, or any other capital asset (say land, commercial property) if investments are made in a new house. TNN | January 14, 2020, 08:06 IST

        MUMBAI: The Income-Tax Appellate Tribunal (ITAT), Mumbai bench, has upheld that a letter of allotment from the builder is sufficient proof of investment in a new house. This recent order will come as a relief for several taxpayers as there are times when execution of the ‘Agreement to Sell’ is delayed by the builder owing to various circumstances.

        This decision is important as a taxpayer is entitled to a deduction from long term capital gains (LTCGs) made on sale of a house property, or any other capital asset (say land, commercial property) if investments are made in a new house. These benefits, subject to certain conditions such as the time frame within which a new house must be purchased, are available under sections 54 and 54-F respectively, of the I-T Act. This deduction reduces the taxable component of the capital gains and results in a lower tax outgo. For instance, if the entire amount of LTCG is invested in a new house, the taxpayer does not have to pay any tax on the capital gains.

        “In this case, the ITAT rightly held, by following earlier judicial precedents, that the taxpayer had acquired domain over the new house property. It noted that a substantial amount was paid on the basis of the letter of allotment, and the taxpayer was therefore entitled to the benefit of exemption on reinvestment in a residential house. What is important in such a case is not the acquisition of legal title to the property, but acquisition of substantial domain over the new property being acquired,” explains Gautam Nayak, tax partner, CNK and Associates, a firm of chartered accountants.

        Typically, during the course of assessment, the I-T officer seeks evidence to substantiate the tax deductions claimed in the tax return. In this particular matter, the I-T department had denied the deductions from LTCGs claimed by the taxpayer. Its contention was that the amounts paid by the taxpayer under the letter of allotment are in the nature of an advance to the builder.













        https://realty.economictimes.indiati...-itat/73237555

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        • Re : RE Related Laws & New Developments

          Construction can't be allowed on open space in approved building layouts: SC

          As per the approved layout plan for JVPD scheme, two different plots of 2,500 and 1,687.18 sq yards were shown as open spaces/garden in the approved layout of 1967 situated on 9th Wireless Road, JVPD Scheme, Juhu.
          • PTI
          • Updated: April 17, 2020, 20:57 IST

          NEW DELHI: The Supreme Court Friday said open spaces left for garden areas in approved building layout plans cannot be allowed for construction, and upheld a Bombay High Court verdict disallowing constriction on two plots at Juhu in Mumbai that were earmarked as open area by a government body in 1967.

          A bench of Mohan M Shantanagoudar and R Subhash Reddy said, "As rightly held by the High Court, we are also of the view that the two plots, which are shown as open spaces/garden, in the approved layout, cannot be allowed to be used for the purpose of construction."

          Dismissing the appeals filed by Anjuman E Shiate Ali and others against the high court verdict of July 19, 2017, the bench said: "It is fairly well settled that in an approved layout, the open spaces which are left, are to be continued in that manner alone and no construction can be permitted in such open spaces."

          As per the approved layout plan for JVPD scheme, two different plots of 2,500 and 1,687.18 sq yards were shown as open spaces/garden in the approved layout of 1967 situated on 9th Wireless Road, JVPD Scheme, Juhu.

          The apex court was faced with the question whether the plots, earmarked as open space in 1967, can be allowed to be utilised for constructions in view of the subsequent development plan prepared by MHADA (Maharashtra Housing and Area Development Authority) in 1999. It held that the subsequent plan will not come into effect.

          Erstwhile Maharashtra Housing Board (MHB), now known as MHADA, had framed a scheme covering total land area of 5,80,000 square yards under Bombay Housing Board Act, 1948 and the said Scheme was called as JVPD Scheme.

          Under the scheme, Dawoodi Bohra Community were allotted certain plots for constructions of residential units and in the lay out plan, the two plot were shown as open spaces/garden.

          By using subsequent MHADA approval of 1999, the efforts were made to construct residential units.

          Dealing with two PILs, the high court had referred to the provisions of Development Control Rules (DCRs), and the provisions of Municipal Corporation Act, and had held that these two plots were shown as reserved for garden purpose in the approved layout in 1967, and cannot be used for constructions.












          https://realty.economictimes.indiati...ts-sc/75206498
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          • Re : RE Related Laws & New Developments

            Lockdown is no ground for rent waiver: Delhi HC

            The pandemic “has had largescale implications for human life. Contractual relationships and jural relationships between parties are severely affected due to the lockdown.

            NEW DELHI: The Covid-19 lockdown cannot be a ground for tenants to seek rent waiver by invoking the ‘force majeure’ — act of God — clause, Delhi high court said on Friday.

            Rejecting a plea by a Khan Market tenant to waive off rent during the lockdown, Justice Prathiba M Singh laid down parameters to deal with various issues regarding rent suspension due to the Covid-19 crisis, interpreting Indian Contract Act and Transfer of Property Act (TPA) — the laws that govern tenancy and leases and also have the ‘force majeure’ clause.

            The pandemic “has had largescale implications for human life. Contractual relationships and jural relationships between parties are severely affected due to the lockdown. The question as to whether the lockdown would entitle tenants to claim waiver or exemption from payment of rent or suspension of rent is bound to arise in thousands of cases across the country”, Justice Singh noted.

            The tenant had sought waiver on the ground that the commercial premises remained shut on the government’s orders, which itself described it as a ‘force majeure’ event. However, the court said the clause didn’t apply in his case as there was no contract. Moreover, under TPA, “there has to be complete destruction of the property, which is permanent in nature, due to the force majeure event”, it pointed out.

            If a tenant wishes to retain the premises and there is no clause giving any respite in the contract between him and the landlord, the rent or the monthly charges would be payable, the judge observed. The “fundamental principle” will be that if the contract has any relief clause, “only then the tenant can claim the same”, she emphasised. In its absence, Justice Singh said, the only concession can be deferred payment of rent.

            ‘Force majeure” is defined as “an event or effect that can be neither anticipated nor controlled” and according to a dictionary, “the term includes both acts of nature (e.g. floods and hurricanes) and acts of people (e.g. riots, strikes and wars)”, the court explained.

            “Temporary non-use of premises due to the lockdown... cannot be construed as rendering the lease void under TPA. The tenant cannot also avoid payment of rent,” the judge said.

            Only Delhi Rent Control Act will apply in the case and the plea is liable to be rejected as while seeking suspension of rent on the basis of a force majeure event, the tenant doesn’t intend to surrender the premises, the court observed.

            However, “some postponement or relaxation in the schedule of payment can be granted owing to the lockdown”, the court added and directed that the use and occupation charges for March would be paid on or before May 30, 2020 and for April and May, by June 25, 2020.

            In 2017, a court ordered the eviction of the tenant on the plea of the landlord who had given the premises on rent in Februrary 1975 for Rs 300 via a lease deed. Following the Covid-19 lockdown, the tenant moved the waiver application.















            https://realty.economictimes.indiati...hi-hc/75910958

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            • Re : RE Related Laws & New Developments

              Landless can't be evicted despite not having title: HC

              The court gave these directions while hearing an appeal by the residents of the village at Taranagar in Churu district settled on a johar land who challengedg the eviction order by a single bench of the high court.
              • TNN
              • September 13, 2020, 11:52 IST


              JODHPUR: Stating that every person has a right to life, the state cannot not evict any landless person from a land even if he did not have title of the land, a division bench of high court observed and barred the government from removing residents of Sahava village in Churu district who inhabited a johar land.

              The bench comprising Chief Justice Indrajit Mahanty and Justice Dinesh Mehta directed the government to verify the nature of encroachment as well as the land and make arrangements to allot land and a building in case of encroachers being landless for 3-6 months.

              The court gave these directions while hearing an appeal by the residents of the village at Taranagar in Churu district settled on a johar land who challengedg the eviction order by a single bench of the high court.

              Moti Singh Rajpurohit, representing the petitioners, said over 300 houses had been built in the village a long time ago but few people approached the high court terming it to be encroachment demanding that encroachers be removed.

              “The single bench had given directions to identify those encroachments, demolish them and clear the land. These encroachers then challenged the order in the high court and prayed for alternative arrangements,” said Rajpurohit.









              https://realty.economictimes.indiati...le-hc/78086838


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              • Re : RE Related Laws & New Developments

                Property registration to be linked to national judicial data grid

                Law minister Ravi Shankar Prasad has written to all CMs to set up dedicated special courts under the Specific Relief Act. The responses were under compilation, law secretary Barun Mitra said in his letter to the cabinet secretary.
                NEW DELHI: In a step towards bettering India's ranking on World Bank's Ease of Doing Business index, the government has decided to link property registration with the National Judicial Data Grid (NJDG). This will not only bring more transparency in land-related disputes but also help in fast-tracking commercial cases.

                "In pursuance of the cabinet secretary's directions, a meeting was held with representatives from eCommittee of Supreme Court, the department of land resources and others to enable linkage of property registration with National Judicial Data Grid as part of improving the ease of doing business ecosystem," the law ministry said. A working group has been constituted to come up with a detailed action plan.

                In a status report submitted to the cabinet secretariat, the law ministry said the first meeting (on ease of doing business) was held on October 12 and the department of legal affairs was 'bringing about simplification of forms and rules and Pre-Institution Mediation and Settlement (PIMS)'.

                The e-Committee of the SC held a meeting with representatives of the high courts of Delhi, Bombay, Calcutta and Karnataka to further simplify procedures. India ranked 63rd in the World Bank's ease of doing business index in 2020, up from the 130th position it held out of 190 countries in 2016.

                Law minister Ravi Shankar Prasad has written to all CMs to set up dedicated special courts under the Specific Relief Act. The responses were under compilation, law secretary Barun Mitra said in his letter to the cabinet secretary.

                To further ensure time-bound disposal of commercial cases, the government has created 42 additional posts of higher judicial services in Delhi HC which will help it to set up additional dedicated commercial courts. At present, Delhi has 22 dedicated commercial courts.

                The government has simultaneously taken up an awareness drive among industry chambers by conducting interactive sessions on 'enforcing contract, government reforms and way forward'.

                The law ministry, in its previous communication to the four HCs, had asked them to ensure that no judge under their jurisdiction gave more than three adjournments in a case, particularly in commercial division of HCs so that cases were disposed of in a set time-frame.

                During the pandemic, the government had asked all commercial courts to make e-filing of cases mandatory. The HCs of Delhi, Bombay, Karnataka and Calcutta were asked to implement an e-filing process in all dedicated commercial courts by June 30 for Delhi and Mumbai and by September 30 for Kolkata and Karnataka.












                https://realty.economictimes.indiatimes.com/news/industry/property-registration-to-be-linked-to-national-judicial-data-grid/79316566


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                • Re : RE Related Laws & New Developments

                  Sebi fines Raymond for violating market norms involving lease of JK House

                  Raymond had entered into a lease agreement with its wholly-owned subsidiary Pashmina Holdings Ltd in March 1994, pursuant to which it granted a lease of four duplex flats situated in JK House to Pashmina for nine years.
                  • PTI
                  • November 20, 2020, 09:53 IST

                  Markets regulator Sebi on Thursday imposed Rs 7 lakh fine on Raymond Ltd for not obtaining approval for certain related party transactions involving the lease of JK House.

                  Raymond violated provisions of Listing Obligations and Disclosure Requirements (LODR) Regulations, Sebi said in an order.

                  Considering the stature of the firm, Sebi said it is expected "to maintain a higher level of due diligence in its compliance with the provisions related to corporate governance. However, the Noticee has not only failed to do so but also allowed the sub-lessees to unduly benefit at the loss of itself and its public shareholders".

                  Noticee refers to Raymond Ltd.

                  Besides, Raymond has "failed to adhere to the best practices of Corporate Good Governance," the regulator further added.

                  Raymond had entered into a lease agreement with its wholly-owned subsidiary Pashmina Holdings Ltd in March 1994, pursuant to which it granted a lease of four duplex flats situated in JK House to Pashmina for nine years.

                  Pashmina, in turn, sub-leased these four duplex flats to certain tenants.

                  The tenants/ sub-lessees included Gautam Hari Singhania, chairman and managing director and Vijaypat Singhania, chairman emeritus of Raymond, Sebi noted from the annual report for the financial year 2014-15.

                  Besides, the other tenants-- Veenadevi Singhania, Akshaypat Singhania and Anant Singhania -- were part of Vijaypat Singhania Greater HUF.

                  Through another deed of lease, Raymond granted the lease for duplex flats to Pashmina for another nine years.

                  Thereafter, Raymond decided to demolish and reconstruct JK House and entered into four separate agreements in November 2007 with Pashmina as the second party and the respective sub-lessees as the third party.

                  As per the tripartite agreements, Raymond offered to provide the sub-lessees with temporary alternate premises during the period of reconstruction or redevelopment of JK House, in consideration of the sub-lessees surrendering/transferring their rights and possession in respect of the existing premises in favour of Raymond.

                  The payment of rent for the alternate accommodations provided to the sub-lessees - due to the tripartite agreements - was a related party transaction for which approval of audit committee was required but Raymond failed to do so.

                  Sebi through a circular in April 2014, amended LODR norms, which required approval for such transactions from the audit committee.

                  The regulator said the approval was not required for the transactions carried out in 2007, but the agreements that took place in May and September 2015 carried out fresh actions on its part in the furtherance of related party transactions and thus required audit committee's approval, as per amended norms.

                  The examination report has not quantified the profit made or loss caused to general investors on account of the violation committed by Raymond.

                  However, in the garb of the literal interpretation of the law, Raymond has continued the mischief of providing accommodation to sub-lessees for almost 2 years subsequent to implementation Sebi's circular.

                  For violation of market norms in the process, Sebi levied a fine of Rs 7 lakh on Raymond.












                  https://realty.economictimes.indiatimes.com/news/regulatory/sebi-fines-raymond-for-violating-market-norms-involving-lease-of-jk-house/79315538

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