Mentoassociates.com – Legal Articles

Similarly the promoter shall not give possession of the apartments to the purchasers until he obtains a completion certificate / Occupancy certificate from the concerned authorities.

Under law, the promoter is duty bound to make a full and true disclosure of all outgoings, including ground rent, local taxes, water, electricity charges, assessment, interest on any mortgage etc. Further the promoter shall give the buyer true copies of the documents pertaining to the apartment.

Before accepting any advance payment or deposit from any purchaser regarding the purchase of a flat, a promoter shall enter into a written agreement and the said agreement shall be registered. Similarly the promoter is liable to maintain separate accounts of sums taken as advance or deposit and to be a trustee thereof and shall disburse them for purposes for which they were given.

It shall be the duty of the promoter to pay all outstanding on the flat till the property is transferred to the purchasers, provided he has collected the same from the intending purchasers. Similarly the promoter cannot unilaterally alter or add to the plans and specifications without the consent of the persons who have agreed to take the flats.

A promoter of an apartment shall make full and true disclosure to the intending buyers of apartments, details regarding the nature of his title to the land on which the flats are constructed, such title duly certified by an Advocate of not less than seven years standing. He shall also make full and true disclosure of all encumbrances on such land, and shall allow inspection on reasonable notice, of the plans and specifications of the buildings, built or to be built on the land. Further such plans and specifications shall have to be approved by the local authority under the law in force.

The promoter is also duty bound to disclose the nature of fittings, fixtures and amenities to be provided; as well as the particulars in the design and the materials to be used in the construction of the building. A promoter shall also specify in writing the date by which the possession of the flats is to be handed over.

The promoter shall also prepare and maintain a list of flats with their numbers and the name and addresses of the parties and the price charged or agreed to be charged. He shall also state in writing the nature of the organization of persons to be constituted and to which title is to be passed, and the terms and conditions governing such organization of persons.

The Karnataka Land Reforms Act 1961 provides for formation of co-operative farms. A minimum of 10 persons, holding a minimum of 50 acres of land in a village may apply to registrar of Co-operative Society to register themselves as a co-operative farm. After making necessary enquires the registrar may register the Co-operative farm and issue certificate of registration.

After registration, the possession of lands held by the individual members stands transferred to the Co-operative Farm. If a new member is admitted as a member of a Co-operative farm after registration, the possession of his land also shall stand transferred to the co-operative farm. A co-operative farm shall form necessary byelaws and a copy of the proposed byelaws shall accompany the application for registration. Only the Registrar can effect an amendment to the byelaws. Every member of a Co-operative Farm shall contribute funds, personal labor and agricultural implements, stocks etc.

After the formation of a Co-operative Farm, it shall be the liability of a farm to pay land revenues and other dues of the land, which is possessed by it. A Co-operative Farm is entitled to various concessions such as reduced land revenues, reduction or exemption of agricultural income- tax, free technical advice, grant of subsidies, financial aids, loans with or without interest etc.

Each apartment, together with its undivided interest in the common areas and facilities appurtenant to such apartment, is a heritable and transferable immovable property. An apartment owner may transfer his apartment and the percentage of the undivided interest in the common areas and facilities appurtenant to such apartments by way of sale, mortgage, gift, exchange etc.

Each apartment owner shall be entitled to the exclusive ownership and possession of his apartment. He shall execute a declaration that he submits his apartment to the provisions of the Karnataka Apartment ownership Act, 1972 and a Deed of Apartment.

Each apartment owner shall be entitled to an undivided interest in the common areas and facilities in the percentage expressed in the declaration. Such percentage is computed by taking as a basis the value of the apartment in relation to the value of the property. The percentage of the undivided interest of each apartment owner in the common areas and facilities shall have a permanent character and shall not be altered without the consent of all the apartment owners expressed in an amended declaration.

The common areas and facilities shall remain undivided and no apartment owner or any other person shall bring any action for partition or division of any part thereof. Each apartment owner may use the common areas and facilities in accordance with the purpose for which they were intended without hindering or encroaching upon the lawful rights of the other apartment owners.

In Karnataka there are many restrictions on the holding or transfer of agricultural land by persons or families. No person who, or a family which, has an annual income of not less than two lakhs rupees from sources other than agricultural lands shall be entitled to acquire any agricultural land, whether as landowner, landlord, tenant or as a mortgagee with possession or otherwise. For the purpose of calculating the annual income, the average annual income of five consecutive preceding years is taken into account. Any acquisition in violation of this rule is deemed to be null and void. Persons or families holding land in violation of this rule are supposed to file a declaration to the jurisdictional tahsildar, who shall forward the same to the Deputy Commissioner, who shall notify such lands as transferred to the state government.

Further, no person, other than a person cultivating land personally shall be entitled to hold agricultural land. However, educational, religious or charitable institution or society or trust of a public nature, capable of holding property, formed for an educational, religious or charitable purpose, can hold property when the income from the land is appropriated solely for the institution or the society or the trust concerned.

Similarly agricultural land cannot be sold, gifted, exchanged, leased or mortgaged (with possession) to a person who is not either an agriculturist or an agricultural laborer. However the jurisdictional Assistant Commissioner may grant permission to acquire land, to persons who bonafide intend to take up agriculture, provided the transferee takes up agriculture within one year from the date of acquisition.

The Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain lands) Act, 1978 prohibits transfer of lands granted by the Government to persons belonging to the Schedule Castes and Schedule tribes in the state. The Object of the Act is to give effect to Directive principles of State Policy contained in Article 46 of the Constitution.

As per section 4 of the said Act, any transfer of granted lands made before or after the commencement of the said act, in contravention of the terms of the said grant shall be null and void and the transferee gets no right, title or interest in such land. However a transfer of granted land with the previous permission of the Government is perfectly legal. The Deputy Commissioner is the competent authority to give such permission. The word ‘transfer’ means and includes sale, gift, exchange, mortgage etc.

Transfer of granted land in breach of conditions of grant is void. Government is entitled to resume such land and restore it to grantee or his legal heirs. A transfer, even to an SC/ST person in violation of the conditions of grant is null and void.

The registrars are prohibited from registering the transfer of granted lands and the office of registrars are provided with a list of granted lands coming within their jurisdiction. The Act even provides for imprisonment, which may extend to 6 months or fine, which may extend to two thousand rupees or both for contravention of the provisions of the above act.

The Karnataka Rent Act 1999 and Rules 2001 require registration of middlemen, brokers or agents. The Middleman or broker shall register his name with the Rent Controller of his area by filing an application in form 8 and paying a registration fee of Rs 200/- only. The Controller after scrutiny of the application issues a certificate of registration in Form No.9, which is valid for a period of 5 years, and the agent shall renew his registration after the said period. The renewal fee is Rs 200/-. The said persons shall submit to the Rent Controller of the area a statement in the prescribed form showing their names, place of business and area of activity.

The middlemen or agent or broker shall within 10 days from the last day of each quarter of every calendar year, file return giving details of every transaction handled by him during the quarter, and the brokerage or commission received by him in each case.

Every middleman or Estate Agent who fails to register his name with the Rent Controller on conviction shall be punishable with fine up to two thousand rupees or with simple imprisonment for a term up to one month or both and also shall be liable to fine of rupees two hundred for each day of continuing default till he complies with law. Further every agent who fails to submit a statement as mentioned above shall on conviction be punishable with fine up to one thousand rupees or with simple imprisonment for a term up to one month.

With the advent of globalization, the Indian economy was opened up removing controls and a policy of liberalization is being followed in every aspects of Indian economy. As a result the Indian market was forced to competition from inside and outside. It was felt that the Monopolies and Restrictive Trade Practices Act 1969, was outdated to match with the international economic developments and the necessity was felt to enact a new Law to promote competition and to curb monopolies.

The Act provides for the establishment of a Competition Commission to prevent practices, having adverse effect on competition to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto. As per the Act no enterprise shall abuse its dominant position in the economy and also it prohibits combinations by enterprises which are likely to cause an adverse effect on competitions with in the relevant market in India.

The Competition Commission shall consist of a chairperson and not less than two and not more than ten members to be appointed by the Central Government. The Commission can enquire into contraventions of the provisions of the Act, on the basis of complaints received by it or on a reference made to it by the central or state government or a statutory authority.

The Jurisdiction, powers and authority of the Commission may be exercised by Benches which shall be constituted by the Chairperson .The Bench shall consists of not less than two members.

On receipt of a complaint or a reference from the Central Government, or a Statutory authority or on its own knowledge or information, the Commission is of the opinion that there exists a prima facia case, shall direct the Director General to cause an investigation to be made into the matter.

The Commission can levy penalty for contravention of its orders, failure to comply with its directions, making of false statements or omission to furnish material information, etc. Further the Commission can levy upon an enterprise a penalty of not more than 10% of its average turnover for the last three financial years. It can also order division of dominant enterprises. It will also have power to order demerger in the case of mergers and amalgamations that adversely affect competition.

The act provides for a fund called the Competition fund. The grants given by the Central Government, fees received under the Act and costs realized by the Commission and application fees charged will be credited into this Fund.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, was a remarkable peace of legislation with an objective to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected thereto.

As per Sec 13 of the said Act any security interest created in favour of a secured creditor may be enforced with out the intervention of the court or tribunal. Where any borrower makes any default in repayment of any secured debt or any installment thereof and his account is a non performing asset, then the secured creditor may require the borrower, by notice in writing to discharge in full, his liabilities to the secured creditor within 60 days from the date of the notice.

If on receipt of such a notice, the borrower raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor finds that such objection is not acceptable, he shall communicate within one week of such objection the reasons for non-acceptance of the objections.

In case the borrower fails to discharge his liability within 60 days period, the secured creditor may: –

a) take possession of secured assets of the borrower including the right to transfer by way of lease, assignment or sale, for releasing the secured assets.

b) Take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale, for releasing the secured assets.

The secured creditor may, by notice in writing, require any person who has acquired any of the secured assets from the borrower and from whom any money is due to the borrower to pay the secured creditor so much of the money as is sufficient to pay the secured debt. All costs, charges and expenses incurred by the creditor for the purpose of taking possession of the secured assets shall be recoverable from the borrower.

If the dues are paid by the borrower, at any time before the date of sale, the secured assets shall not be sold or transferred by the secured creditor. If the dues of the secured creditor are not fully satisfied with the sale proceeds of the secured assets, the creditor may file an application to the DRT for recovery of the balance amount from the borrower.

The secured creditor, instead of acting under his Act can first proceed against the guarantors or sell the pledged assets. No borrower shall transfer his assets after the receipt of the notice, without written consent of the secured creditor. The secured creditor can seek the assistance of Chief Metropolitan Magistrate to take possession of the secured assets and documents relating thereto.

The term Non Resident Indian (for brevity NRI) is widely being used, without knowing its exact meaning. Let us see how law defines an NRI.

Income Tax Act, 1961 defines “resident”, “not ordinarily resident” and “non resident”.

An individual is said to be a resident in India in any previous year, in the following two cases:
(a) if he is in India in that year for a period amounting in all to 182 days or more.
(b) if he was in India for 365 days or more within four years preceding the previous year, and he is in India for a period of 60 days or more in the previous year.

Previous year here means, the previous financial year, commencing from 1st April and ending on 31st March.

If a person who is an Indian citizen, leaves India in a previous year, for the purpose of employment outside India, he will be treated as a resident of India, only if he was in India for 365 days or more within four years preceding the previous year, and he is in India for a period of 182 days or more in the previous year.

If a person who is an Indian citizen, or a Person of Indian Origin comes on a visit to India from out side India, in a previous year, he will be treated as a resident of India, only if he was in India for 365 days or more within four years preceding the previous year, and he is in India for a period of 182 days or more in the previous year.