Thursday, June 18, 2015

REGULATORY AUTHORITY for REALTY SECTOR - BILL Of 2013

Update



There are laws on what collectors can say or do, as top two debt buyers from the US recently found out


< Ajay Shah's blog: Consumer protection in Indian finance ...

  itat on CAs' tax practice

Vijay V. Meghani vs. ACIT (MA By ICAI) (ITAT Mumbai)

Strictures passed against ICAI By ITAT for alleged “deteriorating standards” and “losing its grip over the Income tax matters” toned down on the basis that they were made in the context of a "hypothetical situation" and were not "intended to criticize the functioning of the ICAI"
The Income tax Appellate Tribunal, being a part of Government of India, should not shut its eyes when it is noticed that certain developments occurring in the Country may affect the Country as a whole, more particularly when the reputation of particular profession, from whom the Tribunal is getting assistance in the dispensation of justice, is at stake. Accordingly, we sincerely believe that it is the bounden duty of not only the Tribunal, but also the duty of one and all to point out and discuss about such kind of developments, when it is noticed that the same may affect the public at large. There cannot be any controversy that the interest of our Country is Supreme and no citizen can or should compromise on the same




JULY 16



Citizenmat
In other news...
A few concerned citizens of Bengaluru who were aware of the problems faced by laymen while purchasing a house in the city have drafted their objections and suggestions to the amended Real Estate Bill 2013. Here’s what they had to say. Read: Bengaluru citizens highlight lacunae in new real estate bill.

 ref. comments:


Some of the major observations said to have been made by citizen groups on the said Bill, as listed herein above, are not clearly understood; rather are confusing. \The citizen groups , it is earnestly wished, should consider desirably having a relook at, and review in detail; provided, of course, it is not already late to doing so.

For instance: 

The Bill does not have provision on the lines of KAOA to protect the interest of customers by way of conferring a title to each apartment when the whole property and all apartments are submitted to it. In the proposed Bill, any part of the property automatically receives a title, devoiding  protection to customer. 
UQ

To one’s independent understanding, based on a sound reasoning of own, the Bill, - as the nomenclature itself is noted to sufficiently bear out/ imply,- is, if and when enacted, expected and intended to be followed by the states having it as a broad frame work, so to say; so as to suitably fit into the special enactments of each state as applicable to and governing the two types of property- Flats and Apartments. To put in more explicitly, in one’s firm conviction, that is a not a uniform national code, expected to be universally followed and applied uniformly by all states,- much less enforced rigidly by the central government, - ignoring for the purpose what each of its own enactments provide. 

While the input as above, is with a view to mainly clarifying one‘s own understanding, it is being shared for the benefit of those citizen groups to make use of it as a well-meaning and –intended feedback. And do so, keeping in mind that the very objective is to bring about improvements in the current scenario, so as to benefit the larger public, being the investors, having vested interests; and that too, speedily, with no more muddling even remotely. There is no gain saying that, having regard to the inherent intricacies of the whole matter, consultation with and active assistance by eminent law expert(s), known for legal acumen and personal integrity, seem to be unavoidable, rather imperative in any case. July 17 2015


 Rider: 
For anyone to understand the input with appropriate spirit and in proper light, suggest to prudently keep as a useful backdrop, the ongoing sport, - tug of war - in the matter of Land Bill, between the centre and the states on one hand, and between the states selves, inter se,, seemingly with no prospects of a united resolution in the foreseeable future. July 17 2015,




vswaminathan Some of the major observations said to have been made by citizen groups on the said Bill, as listed herein above, are not clearly understood; rather are confusing. \The citizen groups , it is earnestly wished, should consider desirably having a relook at, and review in detail; provided, of course, it is not already late to doing so. For instance: Q The Bill does not have provision on the lines of KAOA to protect the interest of customers by way of conferring a title to each apartment when the whole property and all apartments are submitted to it. In the proposed Bill, any part of the property automatically receives a title, devoiding protection to customer. UQ To one’s independent understanding, based on a sound reasoning of own, the Bill, - as the nomenclature itself is noted to sufficiently bear out/ imply,- is, if and when enacted, expected and intended to be followed by the states having it as a broad frame work, so to say; so as to suitably fit into the special enactments of each state as applicable to and governing the two types of property- Flats and Apartments. To put in more explicitly, in one’s firm conviction, that is a not a uniform national code, expected to be universally followed and applied uniformly by all states,- much less enforced rigidly by the central government, - ignoring for the purpose what each of its own enactments provide. While the input as above, is with a view to mainly clarifying one‘s own understanding, it is being shared for the benefit of those citizen groups to make use of it as a well-meaning and –intended feedback. And do so, keeping in mind that the very objective is to bring about improvements in the current scenario, so as to benefit the larger public, being the investors, having vested interests; and that too, speedily, with no more muddling even remotely. There is no gain saying that, having regard to the inherent intricacies of the whole matter, consultation with and active assistance by eminent law expert(s), known for legal acumen and personal integrity, seem to be unavoidable, rather imperative in any case. July 17 2015, 9:30 AM · Thumb-up-icon 0 · Thumb-down-icon 0 vswaminathan Rider: For anyone to understand the input with appropriate spirit and in proper light, suggest to prudently keep as a useful backdrop, the ongoing sport, - tug of war - in the matter of Land Bill, between the centre and the states on one hand, and between the states selves, inter se,, seemingly with no prospects of a united resolution in the foreseeable future. July 17 2015, 9:54 AM · Thumb-up-icon 0 · Thumb-down-icon 0

Read more at: http://bangalore.citizenmatters.in/articles/bengaluru-citizens-file-objections-to-amnded-real-estate-bill?utm_source=copy





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vswami  20 June 2015  

 vswami  19 June 2015

Vswami18 June 2015





To Dilate (by way of clarifying and sharing own thoughts, in quest of looking for and finding clues, f any ) :
Following is extract, of relevance) from the Judgment:
Xtracts

Q
In its order, the Court quite explicitly confronted the policy conflict and sought to address it..... extracted below:

This Court feels concerned with the fact that three persons are deprived of their liberty for the last fifteen months and this situation is quite onerous to them. On the other hand, public interest as well as public good demands that the two Sahara Companies, which had collected whopping amount of more than [Rupees] 22,000 crores from the public in an illegal and unauthorised manner, are made accountable for the same .... .. It is, thus, an unprecedented situation of personal liberty of the three applicants on the one hand vis a vis majesty of law and ensuring larger public good, on the other hand. It is this sense of justice, in an unprecedented kind of situation, that has compelled the Court to take such an extreme step.... This case is a burning example where the true dictate of justice is difficult to discern, and the law needed to come down on the side of practical convenience. We may borrow the jurisprudential theory propounded by Ronald Dworkin, albeit in somewhat different context, viz. ... Dworkin has instead argued for the judicial use of public standards or principles in a way that is capable of providing the right legal answer. The process of reaching a right answer in hard cases obviously differs from the process of reaching the legal answer in easy cases. After all, the avowed objective of rule of law is also to ensure... a classic case where the approach adopted is influenced by the necessity of “making the law work”. Therefore, the orders passed may not be strictly construed... but in exercise of inherent jurisdiction vested in this Court to do complete justice in the matter and to ensure that the applicants render full compliance of its orders....

Pragmatism trumps legal doctrine. The Supreme Court has repeatedly stressed the “unprecedented” nature of the situation, and hence it decided to exercise its inherent jurisdiction to adopt a practical approach as opposed to resorting to legal reasoning.
UQ

Wprt the brief comment on the Real Estate Bill 2013, the quite possible, rather inevitable. Prolongation and delay of minimum of a few years, perforce foreseen in having the provisions of the Bill, after its final enactment looms large and in a way, obscures vision.

Q
> On delay, we, as a nation, have some fine qualities but a sense of the value of time is not one of them. Perhaps, there are historical reasons. Ancient India had evolved the concepts of eternity and infinity. So what do years wasted in a litigation matter against the backdrop of eternity. Believing in incarnation, what does it matter if you waste this life. You will have many more lives in which to make good.

Ø  Our cases drag on over a length of time which makes eternity intelligible
Ø  The law may or may not be an ass but is certainly a snail; cases proceed at a pace as unduly slow in a community of snails. 
Ø  Justice has to be blind but I see no reason why it should also be lame; here it just hobbles along, barely able to walk.>

UQ
(A narration from Palkhivala’s  published speech (1987) - The Judiciary and the Legal Profession,  the Book- We, the Nation THE LOST DECADES)



The above  quote, random selected among more  of the kind in like vein, though mainly aired in reference to the realm of tax administration and adjudication, may be seen to equally hold good  and of every relevance  in respect of any other than tax.




previous
b/f from old blogs

AMONG others, representations sent to the Housing Ministry  wrt the Bill of 2001 are reproduced below, for ready reference:
<<
Addendum>
(being sent today, the 7th instant)

IV. Based on an independent but close study of the Real Estate Bill (the revised text), in one’s conviction, many of its features/requirements could not at all be regarded to be new innovations or freshly introduced. For, most of them are to be found already incorporated in the extant individual enactments of State(s) (e.g. Maharashtra and Karnataka).  

The significantly crucial and the most important of them, in that order, are these:

1. Procuring from the concerned local authorities all the necessary approvals and sanctions for development / construction of a building project

2, Execution and registration of a ‘Deed of Declaration’ in the prescribed Form

3. Execution and registration of an ‘Agreement to Sell’
    (Model Form made available)

4. On completion of the project, before conveyance and giving possession, obtaining a completion /occupancy certificate from the concerned local authorities

5. Execution and registration of a Deed of Conveyance
    ((Model Form made available)

6. Compliance with all other related/connected documentations/ requirements at different stages of construction; and finally, including - Advocate’s certificate of ‘marketable title’, ‘no encumbrance’ certificate, etc. (these are enumerated in the Model Form of Conveyance)

Besides, the State enactment, the rules framed there under, read together with all other allied regulations do adequate cover all other connected matters: Contents of Agreement, Deed, and Procedure to be followed for registration, et al, - to the final stage of handing over the property to the co-operative society or co-owners’ ‘Association’ duly formed and registered.

The extant State enactment(s) cannot, of course, be rightly claimed to be fool proof, with no lacuna at all. Even so, none of such lacuna, a few in numbers, could be rightly adduced as an impediment, a serious one at that, which are so material or of a fundamental nature as to come in the way of promoters complying with the law. On the other hand, the largely prevailing non-compliance or by-passing of the law, for decades now, can only be attributed to the belligerent attitude of promoters, against it. In no small measure, traceable to also the government’s matching apathy, and nonchalant behaviour in failing to show any sincerity or make any attempt in implementation and enforcement of the law. Thus, it is the mutually contributory and complimenting callousness that has been largely responsible for the muddled state of affairs; that has gone on merrily, unchecked for decades.

It is in such an overwhelmingly disgusting context / vexing scenario that the proposed regulatory regime has come to be mooted and legislation proposed.
In view of, and keeping in full focus the foregoing, a truly effective strategy needs to be charted; and suitable remedial measures be taken.

One has the following primary suggestions to offer for consideration:

1. Same way as the income-tax department has done for its purposes of keeping a track of the transactions in immovable property, the Registry should be used by the RA, as the main gate keeper, for its purposes of implementation of the proposed enactment, both in letter and spirit, thereby, in turn ensuring strict compliance with the State enactment as well.

2. The final formats, as rightly proposed/envisaged in the Bill, for execution of Agreement to Sell, and for Deed of Conveyance should be got ready at the earliest and be made mandatory to be strictly adhered to / followed. 

Such steps, if devised in detail, and decided upon, should hopefully go a long way in ensuring that the procedural requirements are strictly complied with by the Promoters. Also safeguard and keep protected the lawful rights and interests of the allot tees / purchasers as avowed / sought to be secured by the law.

It goes without specially emphasising that, the key for successful functioning, and fulfilment of its own responsibilities, the RA should have in place absolutely effective machinery for a constant monitoring of the entire scheme of things, to its last detail.

 >Attachment to THE FEEDBACK MAIL earlier sent TO- responseonrealestatebill@yahoo.in>

I. 1. The more times one care to read, own initial conviction gets increasingly strong and fortified; in that, despite the attempt made/impression given to the contrary by the media through articles, etc. on the subject, the Bill (of 2011) does not seem to provide clearly and adequately, even if not with a wholesome set of teeth, at least sufficient teeth to make the regulatory authority (RA) really work effectively and forcefully; so as to fulfil the very basic objectives of creation of such an authority. Such objectives, as set out in the preamble and noteworthy among them are, - (a) ‘to ensure sale of  ...in an efficient and transparent manner’, and (b)’to protect the interest of consumers in..’.    For an appreciation /justification of such a view/reaction, what one needs to do is to mindfully go through,- first chapter by chapter, then section by section, and then, word by word used.  

2. Among others, jutting out are these:

Sections 63 and 64> These confer on the 'appropriate government' (i.e. state government) very wide and sweeping powers. They have the inherent potentials for the state government to, at its will, dictated by its own philosophy and approach, supersede the RA, thereby tending to downright override / veto the exercise (by the RA) of its powers independently, impartially and without bias.

Chapter VI> does not bear out any effective, or in any case, enough safeguards, for rendering the institution of the RA strong enough to successfully implementing and accomplishing the laudable purpose(s) of the proposed legislation; seemingly opposed to/belying what is being tom-tom med with a big noise in certain quarters.

Sections 70 to 73> what should be of concern is the discouraging purport and import of these sections. In one's sincere perception, they do not seem to provide any useful help to achieve the goal of the RA successfully working towards accomplishing the objectives of the legislation on the anvil.


For driving home what is sought to be conveyed, one is obliged to recall the bizarre story, given wide publicity in the media, of the open battle of wits (no wits !) that came to be fought, not long ago, between the two most powerful of all extant regulatory authorities namely, SEBI and IRDA. The point to be specially made a note of is that, - those are the two authorities established by law and commonly acknowledged as profoundly 'central' authorities,-not a 'state authority' like the one intended for realty sector,- with its jurisdictional powers extending to the country as  a whole. For an insight into that story (rather the inside-story), though now may have been forgotten, one may read > 



In a nut shell> The point requiring to be stressed is this: Keeping the above referred episode in mind, every conceivable precaution should be taken, by having in-built safe guards in the enactment itself, so as to ward off any similar, not otherwise unlikely, confrontation, - that is between the RA and the appropriate government (of the state(s)).

The most disturbing of all concerns is that, the Bill, on which comments have been invited, is quite incomplete. With almost every one of the host of 'Rules' and 'Regulations' spoken of in the Bill (ref. Section 2 (zf), (zg)) - WITHOUT WHICH THE LEGISLATION REMAINS INCOMPLETE, HENCE  CAN ONLY BE REGARDED AS STILLBORN - to one's knowledge yet remaining  to be framed and / or made known, what is in store is anybody's guess; a  wild one at that. For, as truly said, - devil is (OFTEN LURKS) in details.
 
Other comments:

II. IT IS SADLY OBSERVED, DRAFTING HAS BEEN DONE IN A GLARINGLY LIGHT-HEARTED AND CAVALIER MANNER.

IN SO FAR AS IT DEALS WITH 'UNITS' OF BUILDING(S), TO WHICH THE LEGAL CONCEPT OF 'CO-OWNERSHIP' ESSENTIALLY APPLIES, THE MOST CRUCIAL ASPECTS NOT COVERED OR EVEN BORNE IN MIND ARE THE FOLLOWING:

1. ALMOST EVERY ONE OF THE 'STATES' HAS ITS OWN ENACTMENTS, RULES, AND REGULATIONS, ALREADY IN PLACE, ON ITS INDEPENDENT STATUTE BOOK.

EVEN THE VERY SCHEME OF THINGS RESPECTIVELY UNDERLYING THEM, ARE NOT UNIFORM BUT VARY; IN SOME RESPECTS, ALSO WIDELY.

2. SO FAR AS ONE KNOWS, IN SOME OF THE STATES (E.G. MAHARASHTRA AND KARNATAKA)THE 'UNITS' OF BUILDINGS THUS FAR GIVEN DUE LEGAL RECOGNITION / SANCTION, AND COVERED BY THE REFERRED SPECIAL ENACTMENTS, ARE OF TWO (only two) DISTINCT TYPES - FLATS and APARTMENTS.

3. ALL THE APPLICABLE PROCEDURAL REQUIREMENTS IN REGARD TO THE SAID TWO TYPES OF UNITS ARE MUTUALLY DIFFERENT AND MATERIALLY AT VARIANCE.

IN THE BILL, THE FOREGOING ARE NOT FOUND TO HAVE BEEN PROPERLY FOCUSED ON OR ACCORDED ANY SPECIAL ATTENTION AS ONE WOULD HAVE EXPECTED; MUCH LESS SUITABLY TAKEN CARE OF/COVERED, SO AS TO MAKE THE REGULATORY REGIME TRULY EFFECTIVE AND EVENTUALLY SUCCESSFUL.FOR, AFTER ALL,THE REGULATORY AUTHORITY IN ANY STATE, IF AND AFTER IT HAS BEEN INSTALLED, COULD, FOR OBVIOUS REASONS,CARRY OUT ITS FUNCTIONS ONLY WITHIN THE FRAMEWORK OF THE SPECIAL ENACTMENT, RULES, REGUATIONS.ETC., ALREADY IN FORCE IN THAT PARTICULAR STATE, NOT OUTSIDE OF THEM.

NOTE: These comments, in a manner of speaking, are no different but more or less go to reiterate some of those points of view conveyed to the Ministry wrt the earlier draft bill (for reference, see the Appendix hereto at the bottom.)

4. CERTAIN OTHER ASPECTS, EVEN THOUGH OF AN ELEMENTARY NATURE, ARE SEEN TO HAVE BEEN SIMPLY GLOSSED OVER, UNWITTINGLY OR OTHERWISE.  

   SELECTIVELY, THE FOLLOWING REQUIRE MENTION:

i)IN SECTION 2, (m), (n) and (o), the terms “development”, “development charges” and “development works” have been specially defined (see also,(r),(s)). The purpose is not known; for, nowhere else in the Bill, the said terms are seen to find any mention. May be, what has been lost sight of is the fact that, while in the earlier draft there were provisions for sharing, subject to mutual agreement, by the parties, of such charges, those provisions have been removed in the revised draft (presumably after reconsideration)(subject to a double check).

In section 2 (p), in defining the term “engineer”, in the nature of things, should it NOT have been specified “civil”.


In section 2 (y), also elsewhere, “deed of allotment” finds mention. One has not heard; much less know, of any such ‘deed’ executed for allotment; its purport or relevance not understood.

ii) Likewise not at all understood are these as well:

  (A)  Explanation under the first proviso in section 3. - ... to be developed in ‘PHASES’...
           
(THE VERY IDEA AS MOOTED, ALSO REPEATED IN SEVERAL OTHER CONTEXTS, IS   ABHORRING)
           
   (B) As to whether the ‘registration’ harped on and projected, rightly or wrongly, as the basic requirement for compliance, calls for compliance in respect of everyone of the several projects a promoter may undertake, or on a onetime basis, seems to be not clear.

(THIS NEEDS TO BE GONE INTO, with a fine-toothed comb, AND SUITABLE CHANGES BE MADE, TO MAKE THE REQUIREMENT EXPLICIT)

   (C) Section 7 (1) (b) – “........  of the agreement entered into with the Competent Authority:...

(FOR WHAT ONE KNOWS, NO SUCH AGREEMENT , a formal one at that, is presently being entered into; if so, -SHOULD BE CLARIFIED)

     
5. As is common knowledge, there are certain crucial areas where the players in the realty sector often fail to properly comply with what the state enactment requires, even if mandated. Some such areas which have come to surface in recent times may be found covered, in detail, in the Blogs posted @ swamilook,  in public interest.

The following links may be seen to provide useful clues for identifying such areas:











IN PARTICULAR, DRAFTING OF LEGAL DOCUMENTATIONS, COMPLIANCE WITH THE PROCEDURAL REQUIREMENTS AS LAID DOWN IN THE STATE (S) ENACTMENTS- E.G. SUCH AS THE MOST CRUCIAL ONE- EXECUTION AND REGISTRATION BY PROMOTER OF A – ‘DECLARATION’ (IN MAHARASHTRA AND KARNATAKA, IN THE PRESCRIBED FORM ‘A’)

A close perusal OF THE SEVERAL MATERIAL COVERED IN THE BLOGS ON THE TOPIC OF –REALTY might help in getting to know of, identifying precisely, and deciding whether all or anyone or more of them require to be suitably covered in the proposed enactment and /or in framing the pending Rules and Regulations.

III. CHAPTER VI (sections 48 and 49) is seen to contain the ‘key’ provisions, so to say. For, the setting up of a CENTRAL ADVISORY COUNCIL (CAC) as envisaged seems to aim at ensuring the efficacy and eventual success in accomplishing the objectives of the machinery of the RA.
What calls for an incisive noting is that, as set out in Section 49, one of the functions of the CAC to be set up, -“shall be to advise the Central Government on:-
(a) all matters concerning the implementation of this Act;”
Having regard to the scheme of things, -if considered in conjunction with the more relevant and supervening provisions of each of the individual State enactments,- however, the implementation of this Act, as envisaged, is , in turn, going to be mainly dependent on implementation of the enactments already in force in each of the States, respectively. In other words, in real terms, what is called for, and to be desirably expected is a profoundly complete and passionate  harmony, co-operation, and co-ordination amongst all the States on the one hand, and the RA on the other. What really in store is impossible to say with any certainty; only future can tell?


APPENDIX
Refer to the reproduced comments in the concluding portion, under the head, - key note @the Blog
http://vswaminathan-vswaminathan-swamilook.blogspot.com/2011/11/real-estate-regulatory-bill.html

<<<<
Cross refer cover mails:


On Saturday, 24 December 2011 10:11 AM, V Swaminathan <vswaminathan13@yahoo.com> wrote:

Thanks Dr.Jaypal for calling.

As desired, PLEASE FIND ATTACHED THE SUBJECT MAIL, WITH ENCLS.

REGARDS

vswaminathan 

PS: Refer the related Blog @link:

----- Forwarded Message -----
From: V Swaminathan <vswaminathan13@yahoo.com>
To: "responseonrealestatebill@yahoo.in" <responseonrealestatebill@yahoo.in>
Sent: Wednesday, 7 December 2011 1:26 PM
Subject: Fw: DRAFT REAL ESTATE (REGULATION & DEVELOPMENT) BILL 201_
BEING AGAIN SENT, WITH AN ADDENDUM

vswaminathan


----- Forwarded Message -----
From: V Swaminathan <vswaminathan13@yahoo.com>
To: "responseonrealestatebill@yahoo.in" <responseonrealestatebill@yahoo.in>
Sent: Monday, 5 December 2011 4:39 PM
Subject: DRAFT REAL ESTATE (REGULATION & DEVELOPMENT) BILL 201_
IN RESPONSE TO THE INVITATION vide your OM of November 09, 2011, PLEASE FIND IN THE ATTACHMENT HERETO, MY PERSONAL VIEWPOINTS / INDIVIDUAL COMMENTS ON THE DRAFT BILL, FOR YOUR INDEPENDENT CONSIDERATION.

VSWAMINATHAN 



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