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RE Related Laws & New Developments

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  • Re : RE Related Laws & New Developments

    Bombay HC says refund by builder to buyers under RERA order not liable to TDS

    Several individuals who between 2015 and 2016 had booked flats in a real estate project at Malad (west) had sought orders from HC for recovery of arrears under a recovery warrant of 2018 passed by the Maharashtra Real Estate Regulatory Authority (MahaRERA) against the builders.
    MUMBAI: The Bombay high court recently directed a builder to refund amounts to flat buyers based on a March order without making any deduction of tax at source (TDS).

    The HC bench of Justices SJ Kathawalla and Milind Jadhav passed the order.

    Several individuals who between 2015 and 2016 had booked flats in a real estate project at Malad (west) had sought orders from HC for recovery of arrears under a recovery warrant of 2018 passed by the Maharashtra Real Estate Regulatory Authority (MahaRERA) against the builders.

    In March 2021, via a consent term order, the builder agreed to pay Rs 2.75 crore through instalments to the petitioners. But in their July 2021 installment, 10 per cent was deducted from the amount as TDS on the amount of interest under the recovery warrant, which the petitioners said was not permissible in law.

    The petitioning-buyers' counsel Subit Chakrabarti said the refund was in the form of compensation or a judgment debt while senior counsel Zal Andhyarujina for the builders submitted that the deduction was based on the provision of section 194A of the Income Tax Act, but later after analyzing the law said the refund was as compensation and out of the purview of the section invoked and hence, has no objection to paying the deducted amount back to the petitioners.

    The HC too said the refund was akin to a judgment debt and cannot be liable to TDS.







    Bombay HC says refund by builder to buyers under RERA order not liable to TDS, Real Estate News, ET RealEstate (indiatimes.com)

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    • Re : RE Related Laws & New Developments

      Mutation doesn't give property ownership right: Supreme Court

      A bench of Justices M R Shah and Aniruddha Bose said an entry in revenue records does not confer title on a person whose name appears in record-of-rights.
      NEW DELHI: The Supreme Court has reiterated that mutation of property in revenue records neither creates nor extinguishes the title to a property and the title of a property can only be decided by a competent civil court.

      A bench of Justices M R Shah and Aniruddha Bose said an entry in revenue records does not confer title on a person whose name appears in record-of-rights.

      “Entries in the revenue records or jamabandi have only “fiscal purpose”, i.e., payment of land revenue, and no ownership is conferred on the basis of such entries. It is further observed that so far as the title of the property is concerned, it can only be decided by a competent civil court,” the court said.

      “As per the settled proposition of law, mutation entry does not confer any right, title or interest in favour of the person and the mutation entry in the revenue record is only for the fiscal purpose.

      As per the settled proposition of law, if there is any dispute with respect to the title and more particularly when the mutation entry is sought to be made on the basis of the will, the party who is claiming title/right on the basis of the will has to approach the appropriate civil court/court and get his rights crystalised and only thereafter on the basis of the decision before the civil court necessary mutation entry can be made,” the bench said.









      Mutation doesn't give property ownership right: Supreme Court, Real Estate News, ET RealEstate (indiatimes.com)
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      • Re : RE Related Laws & New Developments

        Properties bought after parting ways not part of joint family: Karnataka HC

        The observation was made while setting aside a February 9, 2017 order passed by a civil court in Bengaluru in relation to a partition suit involving children and grandchildren of LC Shettaiah.


        https://www.indianrealestateforum.co...16#post2699916
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        • Re : RE Related Laws & New Developments

          Builder liable to pay damages for occupation certificate delay: SC

          The SC passed the order on a plea of Mumbai-based Samruddhi Co-operative Housing Society Ltd. Advocate Sunil Fernandes said homebuyers were living in the society for 25 years without occupation certificate and had to pay 25% higher property taxes and 50% higher water charges.https://www.indianrealestateforum.co...74#post2701874
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          • Re : RE Related Laws & New Developments

            Homebuyers to get compensation for delays in possession of apartment

            Possession that is offered by a builder over an incomplete unit will have no bearing in arriving at compensation, the consumer court said, noting that 'it is inconceivable that a person will not like to take physical possession of his Unit after having made the entire payment.'
            The National Consumer Disputes Redressal Commission (NCDRC) in a recent verdict held that a homebuyer is entitled to compensation for delays up to the point they receive possession of a completed unit.

            Possession that is offered by a builder over an incomplete unit will have no bearing in arriving at compensation, the consumer court said, noting that 'it is inconceivable that a person will not like to take physical possession of his Unit after having made the entire payment.'

            The ruling comes as a big relief for homebuyers who have historically avoided the legal route against builders.

            Vikas Mittal, after failing to get possession of his flat in a DLF Home Developers project in Delhi, decided to seek redress in the NCDRC and won.

            Mittal had booked a unit in the DLF project on September 2009, after depositing a booking amount of Rs 7.5 lakh. The house was to be delivered by September 2012, according to the agreement, within three years of the date of application.

            After a delay of almost five years in handing over possession, the court directed the builder to pay a delay compensation at the rate of 6% per annum to the buyer on the amount deposited by him, within six weeks of the order.

            Any delay in paying the compensation would attract an interest levy at 9% per annum.

            (With inputs from agencies)









            Homebuyers to get compensation for delays in possession of apartment, Real Estate News, ET RealEstate (indiatimes.com)
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            • Re : RE Related Laws & New Developments

              No coercive action to recover EMIs for stuck realty projects: Delhi HC

              Justice Rekha Palli recently granted an interim stay in favour of the homebuyers who invested in projects where the builders were supposed to pay EMIs till possession, but stopped doing so midway.
              NEW DELHI: Delhi high court has come to the rescue of hundreds of “beleagured” homebuyers by restraining banks/housing finance companies (HFCs) from taking any coercive action to recover EMIs for incomplete projects.

              Justice Rekha Palli recently granted an interim stay in favour of the homebuyers who invested in projects where the builders were supposed to pay EMIs till possession, but stopped doing so midway.

              “The balance of convenience at this interim stage lies in favour of the beleaguered homebuyers, keeping in view that they are being penalised despite not being at fault,” Justice Palli noted, adding that “grave and irreparable loss will be caused to the petitioners if they are not granted any interim protection”.

              The awards aim at acknowledging and honouring real estate companies and professionals’ commitment to service, customer satisfaction, innovation, professional development and contribution to the community, city and the country

              The court observed that the petition “brings into light the well-known sorry state of affairs, which has been recently going on in the construction industry”.

              Appearing for some of the petitioners, advocate Aditya Parolia said that having booked their flats by giving the initial advance instalments from their hard-earned income, the petitioners were now being asked to pay EMIs despite the fact that none of the projects was complete or the builders had gone into insolvency while the homebuyers were still waiting for the possession of their dream house.

              The petitioners highlighted that the banks and financial institutions had disbursed loans to the builders at one go without verifying the actual status of the projects, leading to a situation where the banks were demanding payment of EMIs from the buyers despite the fact that the builders had undertaken to discharge this liability till possession.

              The court noted that the petitioners “appear to have been left in the lurch and despite paying the advance amount and investing their hard-earned money to purchase their own residential homes, the construction of the residential flats/apartments have not been completed till date”.

              The court said “prima facie, it appears” that the loans were disbursed without any regard to the advisories of Reserve Bank of India and National Housing Bank. It said the banks and HFCs disbursed the loan when the construction was incomplete and were now asking the homebuyers to pay the amount initially required to be paid by the developers. The petitioners cannot be made to suffer the consequences of this apparent collusion between the banks/HFCs and the developers, it added.






              No coercive action to recover EMIs for stuck realty projects: Delhi HC, Real Estate News, ET RealEstate (indiatimes.com)
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              • Re : RE Related Laws & New Developments

                Restore creditworthiness of buyers in stalled projects: Delhi HC

                Delhi high court has directed the banks to convey to CIBIL to restore the creditworthiness of homebuyers who stopped paying EMIs for incomplete projects. NEW DELHI: Delhi high court has directed the banks to convey to CIBIL to restore the creditworthiness of homebuyers who stopped paying EMIs for incomplete projects.

                “In the light of the interim order, the respective banks/financial institutions are directed to provide appropriate information regarding the petitioners to Credit Information Bureau (India) Limited (CIBIL) so that the ratings of the petitioners are suitably amended,” justice Rekha Palli observed while hearing a bunch of petitions filed by homebuyers.

                The HC had in January this year restrained banks/housing finance companies (HFCs) from taking any coercive action to recover EMIs for incomplete projects, coming to the rescue of 1,200 such homebuyers.

                The court had then noted that “grave and irreparable loss” will be caused to the petitioners if they are not granted any interim protection while adding that the matter “brings into light the well-known sorry state of affairs, which has been recently going on in the construction industry.” Appearing for the petitioners, advocate Aditya Parolia submitted before the court that the grievance of the homebuyers is that the builder had agreed to pay the Pre-EMI till they hand over the possession of the units and is now defaulting to pay the same. The banks, as a result, have started asking for payments from the buyers directly even though the projects have been substantially delayed and are nowhere near completion.

                Its latest direction to restore CIBIL ratings came in the light of the earlier stay, where the court noted that the petitioners “appear to have been left in the lurch and despite paying the advance amount and investing their hard-earned money to purchase their own residential homes, the construction of the residential flats/apartments have not been completed till date.”

                The HC had also faulted the banks for ignoring advisories of the Reserve Bank of India and the National Housing Bank and going ahead with the disbursal of loan to the builder when the construction was incomplete. To worsen matters the banks/HFCs were now asking homebuyers to pay the amount initially required to be paid by the developers, it said, noting that homebuyers cannot be made to suffer the consequences of this apparent collusion between the banks/HFCs and the developers.

                In the latest order, justice Palli also made it clear that the interim order against coercive steps will also extend to the assignees such as the ARCs(Asset Reconstruction Companies) which can’t act against the protected homebuyers.









                Restore creditworthiness of buyers in stalled projects: Delhi HC, Real Estate News, ET RealEstate (indiatimes.com)
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                • Re : RE Related Laws & New Developments

                  Consumer courts empowered to direct refund, compensate buyer for not delivering flat: SC

                  The apex court said that it is clear from the statutory position that the Commission is empowered to direct refund of the price or the charges paid by the consumer.
                  • PTI
                  • April 08, 2022, 09:13 IST
                  NEW DELHI: The Supreme Court Thursday said the power to direct refund of the amount and to compensate a consumer for the deficiency in not delivering the apartment as per the terms of the agreement is within the jurisdiction of the consumer courts.

                  A three-judge bench headed by Justice U U Lalit said under Section 14 of the Consumer Protection Act, if the commission is satisfied that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to return to the complainant the price or as the case may be, the charges paid by the complainant.

                  "Power to direct refund of the amount and to compensate a consumer for the deficiency in not delivering the apartment as per the terms of Agreement is within the jurisdiction of the Consumer Courts," the bench, also comprising Justices S Ravindra Bhat and P S Narasimha, said.

                  The apex court said that it is clear from the statutory position that the Commission is empowered to direct refund of the price or the charges paid by the consumer.

                  "A consumer invoking the jurisdiction of the Commission can seek such reliefs as he/she considers appropriate. A consumer can pray for a refund of the money with interest and compensation. The consumer could also ask for possession of the apartment with compensation. The consumer can also make a prayer for both in the alternative.

                  "If a consumer prays for a refund of the amount, without an alternative prayer, the Commission will recognize such a right and grant it, of course, subject to the merits of the case. If a consumer seeks alternative reliefs, the Commission will consider the matter in the facts and circumstances of the case and will pass appropriate orders as justice demands.

                  The top court said that the Consumer Protection Act and the RERA Act neither exclude nor contradict each other.

                  "In fact, this Court has held that they are concurrent remedies operating independently and without primacy. When Statutes provisioning judicial remedies fall for construction, the choice of the interpretative outcomes should also depend on the constitutional duty to create effective judicial remedies in furtherance of access to justice.

                  "A meaningful interpretation that effectuates access to justice is a constitutional imperative and it is this duty that must inform the interpretative criterion," the bench said.

                  The apex court's judgement came on an appeal filed by a developer against an order of the National Consumer Disputes Redressal Commission which directed it to refund an amount of Rs. 2.06 crore with interest at 9 per cent per annum to the consumer for its failure to deliver possession of the apartment within the time stipulated as per the Apartment Buyers Agreement.

                  "We are of the opinion that the interest of 9 per cent granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the Consumer for enhancement of interest," the bench said.






                  Consumer courts: Consumer courts empowered to direct refund, compensate buyer for not delivering flat: SC, Real Estate News, ET RealEstate (indiatimes.com)


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                  • Re : RE Related Laws & New Developments

                    SC refuses to examine plea on deciding stamp duty on carpet area

                    A bench of Justices U U Lalit and Bela M Trivedi said that it would be better if the issue is examined by competent authority as the apex court's decision would become final and the parties would not have the option to appeal. NEW DELHI: The Supreme Court on Monday refused to adjudicate on the controversial issue of whether the stamp duty should be charged on the basis of "super area" or "carpet area" while registration of flats in Uttar Pradesh and asked homebuyers to raise their grievances before the authority concerned.

                    A bench of Justices U U Lalit and Bela M Trivedi said that it would be better if the issue is examined by competent authority as the apex court's decision would become final and the parties would not have the option to appeal. Allaying the apprehension of homebuyers that the government authority has not been responding to their plea, the bench directed that their grievances be heard and decided within two months.

                    The court passed the order while hearing pleas of Amrapali homebuyers who are at loggerheads with the state government. The state submitted that stamp duty has to be calculated on the basis of "super area". Senior advocate Garima Prashad told the bench that the state had been following the practice of calculating stamp duty on the basis of super area for many years.

                    Carpet area means that area in the flat which you could cover using a carpet and it is the net usable area of an apartment, excluding the area covered by the external walls but including the area covered by internal partition walls of the apartment. The built-up area in a flat is its carpet area plus the space taken by the wall. The build-up area in a flat also includes other unusable areas such as balcony, terrace, flower beds, etc.

                    Super area refers to the built-up area and includes common spaces such as lifts and stairs.

                    In a relief to thousands of Amrapali homebuyers who had opted for the subvention plan, the court directed the banks not to penalise them for the fault of the company.

                    Under subvention schemes, the homebuyer, banker and the developer enter into a tripartite agreement where the buyer pays a small percentage of money upfront. The rest is paid by the bank in the form of a loan, which is disbursed to the developer to continue the construction work and the builder pays interest of the loan till the buyer takes possession of the property.






                    SC refuses to examine plea on deciding stamp duty on carpet area, Real Estate News, ET RealEstate (indiatimes.com)
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                    • Re : RE Related Laws & New Developments

                      Owner-tenant dispute on deposit can go to arbritrator: HC



                      Clipped from: https://realty.economictimes.indiati...or-hc/91539126


                      HC held arbitration can be invoked as the dispute was over a claim of damages in a security deposit refund and not rent money or any other monthly charge.

                      MUMBAI: Dispute over a land owner refusing to return the security deposit to a tenant alleging damage caused to the property can be referred to an arbitrator and is not exclusively triable by the small causes court, said Bombay high court in a judgment this month.

                      HC held arbitration can be invoked as the dispute was over a claim of damages in a security deposit refund and not rent money or any other monthly charge.

                      HC did not accept the argument that the arbitration clause in a decade-old leave-and-licence agreement was against public policy and hence invalid. HC said a dispute over the licence fee, charges and rent which are periodical payments made for use and occupation legitimately fall within the exclusive jurisdiction of the small causes court, but not one, as in the present case, where refund is withheld for claim of damages.

                      HC appointed former Judge P V Ganediwala as sole arbitrator in the dispute where the owner of land in Kurla claimed the property was damaged and hence withheld security deposit of Rs 12 lakh and sought damages worth over Rs 14 lakh from a tenant.

                      In 2012, Bafna Motors Pvt Ltd and Amanulla Khan entered into a leave-and-licence agreement over Khan’s plot of land having a workshop in Kurla. It was for five years till June 30, 2017, with a lock-in period for two years, after which either side could revoke or terminate it with a three-month notice.

                      Justice N J Jamadar held a claim by the plot owner professing to withhold the security deposit amount on the ground that the tenant was liable to pay for damage caused on his property, does not fall within the exclusive jurisdiction of the court of small causes, and is amenable to arbitration.

                      In May 2017, Bafna gave notice and sought a refund of security deposit. Khan said visual inspection of premises showed damage to tools and furniture and claimed Rs 14.5 lakh towards such damages.

                      Bafna invoked an arbitration clause and approached HC in May 2019 and though advocates K L Vyas and Karan Vyas sought appointment of an arbitrator.

                      But advocate Mangesh Patel for Khan opposed it, saying the dispute arising out of a leave-and-licence agreement was exclusively within the jurisdiction of the small causes court under Section 41 of the Presidency Small Cause Courts Act, 1882. He said the arbitration clause in the leave-and-licence agreement was invalid as it was “against the public policy”.





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