A Notice in Time Saves Nine

The right to receive notice and an opportunity to be heard are considered as twin ingredients of natural justice, unless specifically excluded by legislation. There are certain laws in India that warrant strict compliance with this requirement. The courts in India have also examined this requirement and its consequences, while keeping in mind the extent to which this requirement is needed to be met with.

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REIT

The Securities and Exchange Board of India (SEBI) issued a circular in April this year (Circular), reducing timelines for REIT listings from 12 working days to six working days from the date of public issue closure. While this is a welcome move from the perspective of public investors and is yet another step towards ensuring parity between REIT and listco regimes, this could prove challenging for REITs and their advisors, given the intricacies of the REIT regulatory framework.

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Consent Requirements for Land Conversion and Intended Usage – Regime in Karnataka
In the recent years, there is an interpretational query in scenarios wherein the jurisdictional Deputy Commissioner has originally accorded conversion under Section 95 of the Karnataka Land Revenue Act, 1964 (“KLR Act”) for a land use now inconsistent with the zoning of the land as earmarked under the Revised Master Plan 2015 (“RMP 2015”). Given the scenario, should the landowner now obtain a change of purpose order as mandated under Section 97 of the KLR Act in relation to the usage of such lands for purposes other than for the purpose for which permission was accorded in terms of Section 95 of the KLR Act?
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Relief to Affected Home Buyers For Delay In Possession

Delays in handing over the possession of flats has become a rampant practice in the Indian real estate industry, due to which numerous innocent home buyers are being penalised. With developers indulging in the delay tactics in handing over possession of flats, home buyers are not only left in the lurch, but are also being forced to pay ‘equated monthly instalments’ (“EMIs”) on home loans.  However, over the years various forums have come to the rescue of the flat buyers.

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NOIDA stands in the shoes of an operational creditor

Introduction

The resolution process for real estate companies is anything but simple, given the complexities involved and the plethora of parties with varied and conflicting interests. One such issue was whether local industrial development authorities, in particular the New Okhla Industrial Development Authority (“NOIDA”), should be classified as financial creditors or operational creditors, by virtue of the lease deeds they enter into with various corporate debtors.

The question has now finally been answered. The Hon’ble Supreme Court of India vide its judgment dated May 17, 2022, in the case of New Okhla Industrial Development Authority v. Anand Sonbhadra[1], has now declared that NOIDA is not a financial creditor and would be classified as an operational creditor under the Insolvency and Bankruptcy Code, 2016 (the “Code”). The issue involved in the Anand Sonbhadra (supra.) judgment was whether 90 year leases entered into between NOIDA and real estate companies give rise to a financial or operational debt in the event that corporate insolvency resolution proceedings are initiated against such real estate companies.

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No Occupancy Certificate No Maintenance Charges

An Occupancy Certificate (“OC”) is a document that is issued by a local government agency or planning authority, upon completion of construction of a new project. The certificate is proof that the project has been built, by adhering to applicable building codes, relevant regulations, and laws. It is the responsibility of the developer to obtain an occupancy certificate once the project has been completed. The certificate is an indication that the building is suitable for occupancy.

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Validity of a Power of Attorney – A Registration Act Perspective

In the matter of Amar Nath v. Gian Chand & Ors.[1], an appeal was filed in the Apex Court against a High Court order holding that production of a true copy of Power of Attorney (“POA”) was essential for the execution of a sale deed under Section 18 of the Registration Act, 1908 (“Act”).

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Title in immovable property cannot be bestowed on basis of mutation entries

Mutation is a process of changing/updating the title/ownership in the local land revenue/municipal records, which is essential for assessment of the new owner’s tax liabilities.

The Apex Court in Sawarni v. Inder Kaur and Ors.[1] set aside the orders passed by the (i) High Court dismissing the second appeal and (ii) Additional District Judge and held that “Mutation of a property in the revenue record does not create or extinguish title nor has it any presumptive value on title. It only enables the person in whose favour mutation is ordered to pay the land revenue in question.” The order recorded that the Additional District Judge has erroneously concluded that mutation in favour of Inder Kaur (respondent) conveys title to the property in her favour, thus giving rise to conflict. The Apex Court further noted that the lower appellate court did not reach any positive findings on the title of the respondent to the property and was swayed away with the mutation in the revenue record reflecting the name of the respondent.
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MahaRERA - Update on procedure for transferring or assigning promoter’s rights and liabilities to a third party was laid down

Maharashtra Real Estate Regulatory Authority (MahaRERA), vide Circular No. 11/2017 dated November 8, 2017, bearing reference no. MahaRERA/Secy/File No.27 / 491 /2017, prescribed procedure for transferring or assigning promoter’s rights and liabilities to a third party. The circular delineated the procedure in accordance with Section 15 of the Real Estate (Regulation and Development) Act, 2016 (“Act”), which states that, “the promoter shall not transfer or assign his majority rights and liabilities in respect of a real estate project to a third party without obtaining prior written consent from two-third allottees, except the promoter, and without the prior written approval of the Authority”.
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Lease and Rentals - Are these Operational Debt under the IBC

INTRODUCTION

The Insolvency and Bankruptcy Code, 2016 (‘Code’) recognises two types of debts — financial and operational– to enable the creditors to make an application for initiating insolvency proceedings against a corporate debtor. A financial creditor and an operational creditor can initiate a Corporate Insolvency Resolution Process (‘CIRP’) under Section 7 and Section 9 of the Code, respectively. If there is a debt, other than a financial debt or an operational debt, the creditor will not qualify to apply under Sections 7 or 9 of the Code, as the case may be. Therefore, it becomes important to determine the nature of debt/claim while considering the application of an admission under the Code.
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