Precaution To be taken while acquiring the Immovable Property

As buying the property in India is the most complex process Because buying a property is like falling into litigation, therefore it is important to examine title of the property by investigating the source from which the seller acquired the property. This search can be conducted at the sub-registrar’s office. It is advisable to investigate the title for the past thirty years or up to the original owner whichever is later.

An EC from the Registrar for 13 years.

All documents examined, should be original to ensure that the seller has a clear title and that there are no encumbrances on the property such as lien or mortgage or any other charge. Non-availability of any original document should be taken seriously.

Purchasing a property/land requires utmost care. One has to examine and find out the title of the seller or nature of his right. A seller can sell only what he possesses. Therefore if a seller has proper and valid title, on purchase you will get valid title. If the seller's title is defective, you will get only defective title. The simple reasoning is that he can sell what he has, and nothing more.

Some of the important aspects to be borne in mind while purchasing a land may be classified under different heads as follows:

1. First and foremost ask who is the seller? Get the full name and address of the seller.

2. Find out what is the nature of his right. The seller may be having absolute ownership right, or a conditional or limited right.

3. So far as the types of rights in the land, it can be classified mainly as follows:

· Free hold or absolute ownership

· Right of permanent lease

· Tenancy right

· Lands granted by government, under Land Grant Rules,  

  Land Revenue Act etc

· Lands granted under Land Reforms Act, etc

4. It is always advisable to deal with a Freehold right or absolute ownership right.

5. After getting the particulars as to who is the seller, what is his right, then find out the source of his right or title.

a) The title of the seller may be by purchase, by inheritance, by partition, by gift, by settlement or by grant.

b) To find out the source of title there must be some document like,

Right of purchase ---------- Sale Deed

Inheritance ----------------- Entries in Revenue records, and predecessor's title

Partition --------------- Deed of partition

Gift ---------------------- Gift Deed

Settlement------------------- Deed of settlement

Grant ------------------------ Grant order

Mulgeni --------------------- Deed of Mulgeni or permanent lease

c) If the right is by purchase ask for the original sale deed. See when the seller had purchased the land and from whom he had purchased. Verify the previous records. Verify, the title for thirty years.

d) If it is by inheritance, ask the particulars as to from whom he has inherited. What was the right of his predecessor? Again it may be a sale deed or gift, or inheritence. Verify the previous title Get the details as to how his predecessor acquired the title, and whether he is the only person who has inherited. If there are other persons who have jointly inherited, then you have to find out, whether there was any partition. Whether there are any minors who have inherited the property. If there is a minor, the minor's property can not be purchased without obtaining permission of the Court.

e) If it is by partition there must be a deed of partition.

f) See whether there are any conditions or restrictions in the deed of partition. Find out whether there are any conditions, like pre-emption, water rights, rights of way, payment of maintenance etc.

g) Likewise if it is gift deed, or settlement deed, or grant, get the original Gift deed, settlement deed, or grant order as the case may be. Read the document and see whether there are any conditions, like reservation of life interest, restrictions for alienation, payment of maintenance, preemption etc. Some times there may be reservation of life interest, or what was gifted may be only right of enjoyment.

h) Rights acquired under various types of Grant orders again are subject to several conditions regarding alienation and enjoyment. This has to be verified. If the grant is in favour of a person belonging to Scheduled Caste or Scheduled Tribe

community, generally there will be a condition prohibiting alienation. Such lands cannot be purchased

i) If it is a Mulgeni ask for the deed of mulgeni, again see whether there are any conditions. Mulgeni or right of permanent lease is again a conditional right. In such cases there are two parties or persons having the right in the Jand. One is the owner and another is the permanent lessee. In other words, one is the Mulgar/owner and the other one is Mulgenidar/ tenant. The possessory right or right of enjoyment will be, with the Mulgenidar/tenant.,The owner/Mulgar will have the right of ownership with right to collect the stipulated rent. The deed of Mulgeni or deed of permanent lease will contain the restrictions regarding alienation, payment of rent, and the other rights of the lessee etc. All these have to be verified. Because the owner/mulgar will generally have a right to challenge or question the alienation/transfer and the very right of mulgeni can be cancelled or terminated. It is always advisaWe to find out as to that is the Mulgar, or owner, and purchase his rights also.

j) If there are any conditions in the documents, examine the conditions, and if the conditions restrict or prohibit the transfer or alienation, do not proceed.

6. Find out the extent of the property and see whether it tallies with the one mentioned in the documents. Verify the survey number, location and boundaries and get the land measured through a competent surveyor.

7. Find out whether there is an approach road.

8. Examine the sketch or plan of the property.

9. Get the record of rights (RTC) of the land and confirm that the name of the seller is shown as owner in possession of the property. You can get the latest computerized RTC from the Taluk Office. The record of rights will disclose the name of the owner, name of the person in possession, nature of right, nature of land, and also encumbrances if any.

10. Identification of the lands will be always by Survey Numbers. Record of rights/ khata will give an indication as what is the right of the holder. Confirm the entries in the record of rights/khata with some other registered documents / or previous documents. This is because the Record of rights or khata by itself is not a document of title.

11. For converted lands there will be what is called as Khata. Apply and get Khata extract from the City Corporation.

a. The zone where the property is situated. Apply to the Urban Development Authority with survey number and sketch for a zonal certificate. If the property is in residential zone, construction of house will be permitted. If the property in commercial zone, industrial zone, park zone, etc, construction of house will not be permitted.

b. In City/ urban areas the user of the lands are regulated by zonal classifications. The Urban Development Authority is the Department, which deals in the matters relating to zonal

classifications. We have to see in which zone the land is located.

For construction of house the property must be in residential

zone.

12. Whether the property is converted? For using the land for building houses or other buildings, the land has to be converted from agricultural use to non-agricultural use. By filing an application to the Tahsildar, with sketch and other particulars as prescribed, and by paying the prescribed fee you will get an endorsement/order that the land is converted. This is necessary because all lands assessed for land revenue are considered as agricultural lands. The conversion is done under the provisions of Land Revenue Act. The Tahsildar, and in some cases the Deputy commissioner are the authorities prescribed under the Land Revenue Act for getting the land converted.

13. National High way and State High way: As per the National High Way and State High way Rules construction of buildings will not be permitted within a range of 60 meters from the center of the National High Way. If the land is by the side of National High Way, this aspect has to be verified.

14. Coastal Regulation Zone: Construction of buildings are not permitted within a range of 200 meters from the high-tide zone in case the property is situated by the side of river and 500 meters in case the property situated by the side of sea.

15. We have to find and out and see whether there are any encumbrances, charges, or mortgages on the property. Verify Encumbrance certificate for at least 13 or 15 years up-to-date. If there are any charges/mortages/ or other encumbrances noted in the Encumbrance certificate do not proceed till the same are cleared or clarified.

How to find out this?

a. Apply and get an encumbrance certificate at least for 13 or 15 years, from the office of the Sub-Registrar where the immovable property is situated. Give the particulars of the property like Survey Number, extent of land, name of the village, name of ward, boundaries, etc. and specify the period for which you require the encumbrance certificate.

b. The encumbrance certificate will show the details of registered documents relating to the property, Like sale deeds, mortgage deeds, etc.

c. If there are no such registered records relating to the property the encumbrance certificate will be a Nil Encumbrance certificate.

d. Mortgages or charges can be created by registered documents, or by depositing the original title deeds. If it is by registered documents, like deed of mortgage, it will be reflected in the encumbrance certificate. If it is by deposit of title deeds, the Encumbrance certificate will not disclose it. Therefore you have to ask for the originals title deeds for verification. If the original title deeds are with the owner it means that he has not deposited it with any body. Sometimes, the originals might have been lost by misplacement, fire, or by some other means. If that is the situation then one has to proceed only on the basis of trust. We can ask for an affidavit, a sworn statement of the owner to the effect that the original title deeds are really lost and that he has not created any charge, or deposited it with anybody. A paper publication can also be given.

16. If the properly which you are going to purchase is a land with building, you have to verify the building licence, completion certificate and latest tax paid receipt

17. Khata of the building and land has to be verified and it must show the name of the owner.

18. Apartments: If the property which you are going to purchase is an apartment you have examine and verify:

a. The title to the land on which the apartment building is constructed. For tracing and confirming the title of the land on which the Apartment building is built, the same points narrated above have to be followed.

b. The land and the building must have been submitted to the provisions of Apartment Ownership Act 1972, by a registered document called the Deed of Declaration. Read the Deed of declaration and it will give you a clear picture as to what are the common rights, facilities, how it has to be enjoyed, how it has to be maintained. As a whole the deed of declaration will contain the various provisions regarding the mode of enjoyment of the apartments, common areas, and facilities.

c. The percentage of right in the land which you are going to get has to be verified

d. Whether the Association of the Owners has been formed?

e. Get a no due certificate from the Association of Owners regarding maintenance or other charges so far as it relates to the apartment, which you are purchasing.

f. The building license, plans, completion certificate latest tax paid receipt have to be verified.

g. All documents relating to land as explained above have to be verified.

h. The original of the sale deed relating to the apartment, which you are purchasing, has to be obtained.

19. Some points regarding Minors right, and rights of inheritance:

a. If right of minor is involved in any property, it is not advisable to purchase such land. The minor can always question the sale by the father or mother as guardian within three years of his/her attaining majority. Getting Court permission for sale of minor's property, or right in the property will protect your rights to some extent.

ii) Regarding rights of inheritance, among Hindus all children irrespective of sex, they get right by birth in ancestral property as per the latest central amendment to the Hindu Succession Act. The rights of children are equal. So far as Indian Succession Act is concerned, which is applicable to Christians, when a male dies intestate, (i.e. without a Will or other documents) his wife will get one-third right and the remaining two-third will go to the children equally. For Mohammedans, when a male dies the wife and children will get the rights. However if there are no male issues and only daughters, as per Mohammedan Law, some of the near relatives of the deceased father will also get a share.

iii) If the property is self-acquired property, the question of children inheriting any right by birth does not arise. However when a male Hindu dies leaving behind his self-acquired property, without leaving behind any Will or other documents, the succession to the property will be as per the Hindu Succession Act. If the property is ancestral property, or a property inherited by his father, the succession for such property shall be as per the Hindu Succession Act and the same can not be regulated by Will. However this concept of ancestral or family property etc are not there under Indian Succession Act. Thus the property inherited by a Christian will be as good as his/her self-acquired property.

20. Sale by General Power of attorney holder. In many cases the actual owner does not come forward for executing the sale deed and the GPA holder represents the owner. In such cases first of all we have to verify the genuineness of the GPA. The original GPA must be verified and the GPA holder must have the custody of the original GPA. The following points may be borne in mind while examining the GPA:

a) The GPA is still in force. If it is an old GPA ask for a confirmation.

b) The GPA must contain the following powers and particulars:--Power of sale, power to sign and execute the sale deed, receive the consideration, appear before the Sub-Registrar, present the document for registration, admit execution and receipt of consideration, deliver possession of the property and description of the property, full name and address of the person giving the power and the person to whom it is given. If all these powers are there the GPA holder can execute the sale deed.

c) The GPA must be drawn on stamp paper of the required value. It must be attested by a Notary, Magistrate, Sub-Registrar or embassy.

21. As the sale transactions cannot be done then and there, and since it requires some reasonable time for both the seller and purchaser, many a times, the parties enter into agreement for sale pending registration of the actual sale deed. Before entering into agreement for purchase or sale, all the points narrated above have to be verified. The purchaser must retain the original agreement. Copies of the title deeds have to be obtained. The agreement has to be drawn and executed on stamp paper of required value. The agreement for sale must contain at least the following particulars:

a) Full name and address of the Seller and Purchaser.

b) A brief history of the title of the seller, with reference to his title deed.

c) An undertaking by the seller to sell |he land to the

d) The total price of the property agreed between the parties.

e) The amount of advance paid, mode of payment, acknowledgement of receipt of the advance by the seller, the amount of balance price to be paid, the time for payment of the balance price.

f) Time for execution and registration of the sale deed.

g) An undertaking to deliver vacant possession of the property

h) An undertaking to hand over all title deeds

i) A clear description of the property

j) Date and time of the agreement.

k) A default clause stipulating penalty or damages for breach of agreement.

Availing loans from Banks:

Generally banks insist scrutiny of title for 30 years. The original title deeds must be produced. The chain of title from the latest to thirty years back has to be established by clear documents. In most of the cases, originals of all the previous documents is not possible. There may be cases where one big property was divided into several sites, in which case all the purchasers will not get the original of the parent document. However original of the latest document must be produced. In some cases even the original of the last document may not be available, on account of loss of document by fire, misplacing, or for other reasons. In such cases, you will have to swear to an affidavit stating that the original is lost, and not available, and that you have not deposited the document with anybody, nor created any charge. A paper -publication can also be given. However the creditor /purchaser may or may not accept and agree. In such cases the property can be mortgaged only by registered mortgage.

In addition to the above, Latest Khata, or RTC, Conversion order, Encumbrance Certificate for 15 years, latest House tax paid receipt if there is a building, are the further requirements. If all these documents are available, by depositing originals of these documents with the bank, as security for the loan, you can create valid mortgage/charge in favour of the Bank. This type of mortgage is called mortgage by deposit of title deeds. This type of mortgage will not be reflected in the Encumbrance certificate. But such charges can be noted in the Record of rights, or khata if the bank gets the entry made by applying to the concerned authority.

Court Room General Procedure in FAQ

1. Is there any difference between civil and criminal proceedings?

In criminal proceedings, the aim is to punish an offender and proceedings is always between the State and the accused. In a civil proceeding, the aim is to recover property or money, and to order compensation or to grant relief based on a right which has arisen in favor of the person seeking the relief.

2. What are the rights, which can be enforced, in a civil proceeding?

Under Section 9 of the Code of Civil Procedure, every right of a civil nature can be enforced in a civil court.

3. Can the State be a party to civil proceeding?

The State can be a party, if a civil right is claimed by or against the State.

4. What is the meaning of a "cause of action"?

a) "Cause of action" is the set of facts which a person must prove in court, to win a civil suit. It has two aspects, factual and legal, though lawyers often confuse the two. b) From the factual point of view, a person suing in court (the plaintiff) has to all Facts that make up or support his claim. c) The concept of cause of action has a legal aspect also. A person suing in court may be able to establish all facts he has in mind to seek relief. But if those facts themselves do not give rise to a legal right, then even on the established facts, no ground for relief arises.

5. How does a civil suit begin?

A civil suit begins by ' presenting ' a ' plaint ' to court. This can be done personally or through a pleader or an authorized agent.

6. What are the matters to be borne in mind regarding the jurisdiction

of courts?

A suit should be filed only in the court competent to try the particular suit. Limits on the jurisdiction of a court may be (a) monetary limits (b) limits regarding nature of the subject matter (c) local limits. Lower courts can try cases not exceeding a certain value. Again, some suits can be filed only in specified courts. For example suits regarding public trusts can be taken up by the District Judge. "Writs are extraordinary proceedings and can be taken up only in High Courts or the Supreme Court. Most important are local limits on the court's jurisdiction".

7. What is pleading?

Pleading necessarily means plaint or written statement. The facts upon which a suit is based or a defense is raised should be specifically pleaded. Pleadings must be liberally construed. The object of the pleading is to ascertain the real dispute between the parties (Order VI).

8. What particulars must be given in the pleadings?

a) The pleading must contain only the statement in concise form of the material facts on which the party pleading relies for his claim or defence. pleas and facts constituting them should be clearly expressed. Evidence need not be pleaded. Pleadings need not refer to provisions of law when necessary averments are

made. There is a distinction between a pleading under the Code of Civil Procedure and a writ petition or a counter-affidavit. In a pleading (plaint or written statement) only facts are required to be pleaded while in a writ petition or counter affidavit not only the facts but also the evidence in proofs of such facts

have to be pleaded and annexed to it. A plaintiff is not entitled to relief upon the facts and documents which are neither stated nor referred to in the pleadings. b) If a party relies on any misrepresentation, fraud, breach of trust, willful default or undue influence, then all such particulars must be stated in the pleading. c) Every

pleading shall be signed by the party and his pleader. In cases where the plaintiff or the respondent is not able to sign due to any reasonable cause, then the pleading may be signed by any person duly authorized by the parties concerned. d) Address must be furnished in every pleading. e) Every pleading shall be verified by the party or one of the parties pleading or other person who is acquainted with the facts of the case (Order VI).

9. What particulars should a plaint contain?

a) The name of the court in which the suit is the brought. b) The name, description and place of residence of the defendant, as far as they can be ascertained. c) The name, description and place of residence of the plaintiff. d) Where the plaintiff or the defendant is a minor or a person of unsound mind, a statement to that effect. e) The facts constituting the cause of action and when it arose. f) The facts showing that the court has jurisdiction. g) The relief, which the plaintiff claims. h) Where the plaintiff has allowed a set-off or relinquished a portion of his claim the amount so allowed or relinquished. i) A statement of the value of the subject matter or the suit for The purpose of jurisdiction and court fees, so far as the case admits. j) The relief which the plaintiff claims either simply or in the alternative; and k) Relief in respect of several distinct claims or causes of action funded upon separate and distinct grounds must be stated separately and distinctly.

10. Is there a form prescribed for the "plaint"?

a) No particular form is prescribed. (Although some forms are given as specimen in a schedule to the code, they are not obligatory. b) However, it is necessary that the plaint should be divided into numbered paragraphs. c) Facts should be stated briefly and there should be not repetition. d) Legal propositions are not required to be stated in the "plaint"

11. What is the reply to the "plaint" called?

The reply to the "plaint" as given by the defendant is called " written statement" (Order VIII).

12. What are rules for drafting written statement, set off and counterclaims?

The dependent must raise all matters in his plead which show that the suit is not maintainable or such ground for defence. New facts must be specifically pleaded. It is the duty of defendant to produce the document upon which relief is claimed by him.

13. What is the proper way of denying an allegation made by the plaintiff?

The denial must be specific and not evasive.

14. Can a judgment be passed by the court without hearing the arguments?

If the Judge commences to write a judgment before the completion of entire evidence and does not hear the arguments of the counsel, then it is considered as gross irregularity in the trial of the case. The court is bound to hear the party and an application presented before the passing of final decree cannot be rejected without hearing.

15. What are the consequences if the Witness fails to appear before the court?

As such it is the duty of the person or witness summoned to give evidence or produce document at the time and place named in the summons. But if the person does not appear or appears but fails to satisfy the court, the court can impose a fine not exceeding five hundred rupees or attach his property. if the witness is confined or detained in a prison, then the court has power direct the officer-in-charge of the prison to bring such person before the court for giving evidence.

16. What is "Adjournment" and what is the procedure for seeking adjournment in the court?

'Adjournment' in legal sense means putting off or deferring proceedings in a case before court to another day. Adjournment is a matter of discretion of the Court which must be exercise, assorting to the well established principles and not in an arbitrary manner. Sufficient cause must be shown to seek adjournment of the hearing of the suit, at any stage of the time ( Order XVII). The court can also impose cost on the party seeking adjournment if the court postpones the further hearing of the suit.

17. Is it necessary to engage a lawyer?

No. A party can appear in person in court and conduct his or her own case.

18. What happens to the suit if the plaintiff does not appear at the hearing of the suit?

a) If the plaintiff does not appear at the first hearing, the suit must be dismissed. The law is mandatory on the point (O. X - Rule 8). b) However, if the plaintiff can later satisfy the court that he was prevented by sufficient cause, from appearing at the earlier hearing he can apply to the court for restoring the suit.

19. What are the consequences of plaintiff failure to pay either the court fee or the posted charges ( called talbana in District Courts ) for service of summons?

On the failure of the plaintiff to pay the court fee or postal charges for service, the court may make an order that the suit be dismissed (O.IX - R.2).

20. What will be the fate of the suit if neither party appears?

The court may make an order that the suit be dismissed ( O.IX - R.3). But, if the plaintiff satisfies the court that there was sufficient cause for such failure to either pay the court fee or talban or non appearance in court, then the court must restore the suit ( O.IX - R.4).

21. What is the position if the defendant does not appear at the hearing of the suit?

a). If the defendant does not appear the court can proceed to hear the suit in his absence, that is to say, the suit is heard 'ex-parte'. b). However, if the defendant can later satisfy the court that his absence at the earlier hearing was due to sufficient cause, he can apply to the court for an order that he be join the proceedings.

22. Can a judgment be passed ex-parte?

a). Yes, if the court has ordered that by reason of the defendant's absence, the Case should proceed ex-parte. After such an order, the court can pr oceed even To pronounce judgment ex-parte if the stage for judgment arrives. b). However, such an ex-parte judgment can be set aside by the court if the defendant subsequently applies for setting it aside on the ground that (i) he had not been served with "summons"(notice of suit) or (ii) that though he had been served with the notice, he could not appear and that his non-appearance was due to sufficient cause.(AIR 1955 SC 425).

23. Can a civil court give an oral judgment?

No. A judgment must be in writing and must contain the points for decision, the decision on those points and reasons for the decision.

24. What is the distinction between "judgment" and "decree"?

'Decree' means judicial determination of the matter in dispute by the court in which the court determines the rights of parties to the dispute. Such determination of rights must not be subject to terms of conditions. Thus, the decision should be complete and final as regards the court which passes it. 'Judgment' means a statement given by judge of the grounds of a decree or order. A judgment includes points of dispute, the decision and the reasons for such decision. It is not necessary to give a statement by the judge in a decree but it is necessary in a judgment.

25. What is procedure for procuring copies of judgment?

The copies of type written judgment are available to the parties after the pronouncement of the judgment on payment of such charges as prescribed by the High Court Rules.

26. What is meant by 'execution'?

'Execution means the enforcement of the decree.

27. What is the meaning of 'affidavit'?

a) An affidavit is a statement in writing made on oath before the competent authority ( say, an Oath Commissioner). This is later produced in court to support the case of the party at whose instance the affidavit was sworn by a witness. b) Generally, witnesses must themselves give evidence in court. But the law allows affidavits to be given in evidence for certain purposes e.g.in support of applications for temporary orders

28. Can a suit be withdrawn?

Yes, but once a suit is withdrawn, the plaintiff cannot file a fresh suit on the same cause of action i.e. for enforcement of the same claim unless he had obtained. from the court, permission for filing a fresh suit.

29. Can a suit be compromised or settled?

Yes, the parties can, by mutual agreement, settle the dispute and reach a compromise.

30. Can a suit be filed by or against the Government or public officers in their Official capacity?

Yes, a suit can be filed by or against the Government. But, no suit can be instituted against the Government or against a public officer in respect of any act purporting to be done by such public officer in his official capacity until two months, next has expired after the notice in writing has been delivered to the Central Government of State Government or any other functionary of the Government (Section 80 of Civil Procedure Code). The Government pleader in any court is the agent of the Government for the purpose of receiving processes against the Government issued by such courts.(O.XXVII).

31. Has a poor person ( indigent person) any privileges in litigation?

A person is considered as an indigent person if he is not possessed of sufficient means to enable him to pay the fees prescribed by law for the plaint in such suit. Every application for permission to sue as an indigent person, in proper form and duly presented, will be examined by the court regarding the merits the claim and the property of the applicant. If the court grants permission to the applicant to sue as indigent person, then such a plaintiff is not liable pay any court fee in respect of his petition. The court may also assign a pleader to an un-represented indigent person. If the indigent person succeeds, then the court can order the

Government to recover the court fees from any party ordered by the decree to pay the same ( Order XXIII ).

32. What is injunction?

An 'injunction' is a judicial process whereby a party is ordered to refrain from doing or to do a particular act or a thing.

33. What are the consequences of breach of an injunction?

The consequences are : 1. The court may order that the property of the person guilty of such disobedience be attached. 2. Such person may also be arrested for 3 months ( maximum punishment) unless the court directs his release. 3. If such breach continues for more than one year, the court may sell such property and award suitable compensation to the injured party.

34. What are Interlocutory Orders and why are they passed?

Any order, which is not the final order in a suit, is called an Interlocutory Order. Interlocutory orders are passed to assist the opposite parties in its prosecution of their case. They are intended to prevent the ends of justice from being frustrated.

35. What is appeal?

Appeal means judicial examination of the decision by a higher court. It is a remedy for getting the decree of the lower court set aside.

36. What is meant by "revision"?

"Revision" connotes the power of the High Court to interfere with the Judgment of a lower court in interests of justice. While appeal is a right, revision is a matter of discretion of the High Court. It is an extraordinary power.

37. What is the distinction between appeal, revision and review?

Appeal lies to a superior court which may or may not be a high court But revision application lies only to High Court. Appeal is a right given by the Statute while revision is only a privilege. Power of revision is exercised by a superior court to a court which decides a case, but the power of review is exercised by the same court

which passed the decree or order. Power of revision is exercised only when there is no appeal To the High Court but review can be made ever when such appeal lies.

38. What is the meaning of "res judicata"?

'Res' in Latin means thing a 'Judicata' means already decided. This rule operates as a bar to the trial of a subsequent suit on the same cause of action between the same parties. Its basic purpose is - "One suit and one decision is enough for any "single dispute". The rule of 'res judicata' does not depend upon the correctness or the incorrectness of the former decision. ( AIR 1983 NOC 69 (All). It is a principle of law by which a matter which has been litigated cannot be re-litigated between the same parties. This is known as the rule of "res judicata" (thing decided). The aim of this rule is to end litigation once a matter has been adjudicated. It aims to save the court time and prevent harassment to parties.

39 .What are the objects of summary procedure?

The object of summary procedure is to prevent unreasonable obstruction by the defendant who has no defence and quick disposal of a suit. Under this procedure, the defendant is not allowed to defend his case unless he obtains leave to defend from the court.

40. What are the forms of "cruelty" recognized by the Courts?

* Persistent denial of food, * Insisting on perverse sexual conduct, * Constantly locking a woman out of the house, * Denying the woman access to children, thereby causing mental torture, * Physical violence, * Taunting, demoralising and putting down the woman with the intention of causing mental torture, * Confining the woman at home and not allowing her normal social intercourse, * Abusing children in their mother's presence with the intention of causing her mental torture, * Denying the paternity of the children with the intention of inflicting mental pain upon the mother, and * Threatening divorce unless dowry is given.

41. What is a "matrimonial home"? What rights do women have in their matrimonial home?

The matrimonial home is the household a woman shares with her husband; whether it is rented, officially provided, or owned by the husband or his relatives. A woman has the right to remain in the matrimonial home along with her husband as long as she is married, though there is no definite law regarding this right. If a woman is being pressurized to leave the matrimonial home, she can ask the Court for an injunction or "restraining order" protecting her from being thrown out. This can usually be obtained quite easily. It is generally advisable not to leave the matrimonial home; it is easier to get a court order preventing a woman being thrown out than to get an order enforcing her right to return to it once she has left or been thrown out.

42. What is an "Injunction" and how does it apply to domestic violence cases?

An injunction is a court order directing a person to do or not to do something. A woman has a lot of flexibility regarding what she can request the Court to order. For instance, If she is being stalked by somebody (including her husband), she can obtain injunctions against the person coming near her home of place of work,

or even telephoning her.

43. What can be done in the case of dowry-related harassment or

dowry death?

Section 498-A of the Indian Penal Code covers dowry-related harassment. As with other provisions of criminal law, a woman can use the threat of going to court to deter this kind of harassment. The Indian Penal Code also addresses dowry death in Section 304-B, If a woman dies of "unnatural causes" within seven years of marriage and has been harassed for dowry before her death, the Courts will assume that it is a case of dowry death. The husband or in-laws will then have to prove that their harassment was not the cause of her death. A dowry death is punishable by imprisonment of at least seven years. When filling an FIR (First Hand Report), in a case where a woman is suspected to have been murdered after a history of torture due to dowry demands, the complaint should be filed under section 304-B rather than under section 306, which deals with

abetment to suicide. Section 306 should be invoked when a woman commits suicide because of dowry-related harassment.

44. Can you refuse to have sex with your husband? is there a law on

marital rape?

Since India does not have a law on marital rape, even If a woman's husband has sexual intercourse with her without her consent, he cannot be prosecuted for rape. However, excessive and unreasonable demands for sex, or demands for unnatural sex have been considered forms of cruelty and may entitle a woman to a divorce. If a woman is judicially separated, her husband cannot have sexual intercourse with her without her consent. If he does, he can be prosecuted under section 376-A of the IPC. Note that consent under pressure ( e.g. because of threats to injure or to stop paying maintenance) is not considered valid.

45. What can a woman do to prevent domestic violence?

One option is to get the woman's husband to execute a "bond to keep peace", or a "bond of good behaviour" through the Executive, Magistrate who can order the husband to put a stop to domestic violence. The husband can also be asked to deposit securities ( i.e. money of property) that will be forfeited if he continues to act violently

46. Distinction between Civil and Criminal Law

The distinction between civil and criminal law is a basic part of the Indian legal system. Civil laws deal with the rights and obligations of people and what is needed to protect them, While criminal law deals with offences and their punishment. In a criminal offence, the State takes upon itself the responsibility to investigate and collect evidence ( through the police), to fight the case in court (through a public prosecutor) and enforce the punishment. Robbery, murder and kidnapping are examples of criminal offences. Criminal offences are dealt with by the Indian Penal Code (IPC). The Procedure by which a criminal trial is conducted is quite different from the processes involved in a civil trial. An important difference is that the "standard of proof" required in criminal cases is much higher than in civil cases. Since criminal law is centrally linked with issues of punishment, allegations and facts must be proved "beyond reasonable doubt", so that innocent people are not punished. In civil cases, the courts scrutinise the "balance of probabilities" before deciding in chose favour to make a judgement. However, there are some situations in which both civil and criminal law apply. Inflicting physical violence on a wife or daughter-in-law as well as subjecting her to cruelty - physical, mental or emotional - in a marriage is not only a civil offence and provides ground for divorce ( a "matrimonial offence"), but is also a criminal offence under the Indian Penal Code, for which a person can be imprisoned. The laws dealing with marital abuse have been made very stringent through amendments in the Indian Penal Code and the Evidence Act.

47. How long after marriage can a person seek divorce Under Hindu Law ?

Under Section 14 of the Hindu Marriage Act. 1955, no petition for divorce can be filed within one year of the marriage. But in case the petitioner's case is of exceptional hardship High Court is empowered to grand leave to file the case before the expiry of one year.

48. If the Husband marries another woman, What action can be taken Under Hindu Law?

Under Section 17 of the Hindu Marriage Act, bigamy is punishable Under Section 494 & 495 of the Indian Penal Code. Section 494 prescribes for imprisonment, which may extend to 7 years and fine. So a complaint be lodged against the husband with the police.

49. What is the minimum required age to marry under The Hindu Law ?

According to Section 5 (iii) of the Hindu Marriage Act, the bridegroom has to complete 21 years of age and the bride 18 years of age. Any marriage in contravention of this attracts simple imprisonment, which may extend to 15 days or fine, which may extend to Rs. 1000/- or with both.

50. How do you obtain divorce by mutual consent ? when can a person re-marry after obtaining a decree of divorce?

Divorce by mutual consent can be obtained by Husband and Wife in terms of Section 13 B of the Hindu Marriage Act, 1955. The provisions of the said Section require that the husband and wife should be living separately for a period of more than 1 year and they are not able to live together any further. "Living Separately" has been now defined by the Supreme Court as "not living as husband and wife and not performing marital obligation", even if the husband and wife are living under the same roof. A joint petition has to be filed in this regard and after the filing of the same, the Court grants a minimum period of six months (and

maximum 18 months) for the parties to come again and make a statement confirming the said consent. It is only after this second consent having been given by both the parties after six months of the filing of the petition for mutual consent, that a decree for divorce is passed by the Court. If during this period of six months after the filing of the petition, any of the parties withdraws the consent, the divorce can not be granted. Further, apart from the same, before passing a decree of divorce, the court has also to be satisfied that the consent has

not been obtained by force, fraud or undue influence. With regard to the remarriage after divorce, Section 15 of the Hindu Marriage Act, 1955, provides that after a decree of divorce has been granted, in case there is no right of appeal against the decree or if there is a right, the time has expired without an appeal having been presented or if the appeal filed has been dismissed, it shall be lawful for either party to marry again. The period of appeal as provided under Section 28 of the Hindu Marriage Act is 30 days from the date of the decree or order.

51. If the Wife has left the house of her husband and was living away from him without any reasonable cause, can the husband be entitled to judicial separation or divorce? Is there a time period for filing of divorce petition?

In case the wife has left the house of the husband and is living away from him without any reasonable cause, the husband is entitled to judicial separation or divorce. The condition however, is that the desertion of the wife should be for a continuous period of not less than two years, immediately preceding the presentation of the petition for grant of judicial separation or divorce.

52. If one of the spouse is not at all ready to give the divorce at any cost, then how much maximum time it can take to get the decree for divorce?

If one of the spouse is not ready to give divorce at any cost, then the remedy for the other spouse is to file a petition for divorce before the court. However, a divorce can only be granted under certain prescribed circumstances under Hindu Law which are described in Section 13 of the Hindu Marriage Act. These grounds include cruelty; desertion; voluntary sexual inter-course with another person; the other spouse being of unsound mind; conversion of religion by the other spouse; Leprosy; venereal disease; a spouse having renounced the world or being missing for a period of more than 7 years. The period of time for seeking a divorce decree can really not be specified, because it depends upon a number of circumstances. However, still a general estimate which can be given in an average litigation of such a nature is around 4 to 5 years before the District Court.

53. Once a joint petition for divorce is filed by mutual consent, is their a way ( Legal loopholes / by pass procedure) to get the decree for divorce within 2 months of filing the petition and not after 6 months?

If one manages to get the decree for divorce in 2 months (with the help of some X lawyer at some Y Court)then later on, can anyone of husband or wife at any point of time in his/her life appeal against the decree?

Although under the provisions of Section 13-B of the Hindu Marriage Act 1950, the requirement is that after the presentation of a petition for divorce by mutual consent, the court has to adjourn the matter for a minimum period of 6 months (and not later than 18 months) where after the parties have to again come back to

the court for making s second motion confirming the mutual consent earlier given by them. However, In a number of judgments the courts have held that this period of six months can be waived if the court is convinced that the provisions of the said section have been complied with and that there in no force, undue

influence or coercion exercised by one spouse against the other. The courts are a such granting decree for divorce by mutual consent without waiting for a period of six months specified under the Hindu Marriage Act. Such divorce decree granted prior to the period of 6 months cannot be normally challenged. It is only under vary rare circumstances where it is proved by the spouse that the said mutual consent was not given out of his/her free will or was given under some grave force or threat of life can the said decree for divorce be cancelled. But the same is also applicable to a divorce decree granted by mutual consent after waiting for a period of six months.

54. What is the right of husband on the child at the separation?

After divorce/separation, the husband can move an application for the custody of a child under Guardian & wards Act and if the parties are Hindu then under Hindu Minority & Guardianship Act. The husband also has a right to claim the right of meeting the child and to take the child during holidays till the disposal of

the petition for custody. The parties can ask for the above said interim relief from the Court.

55. What is the punishment for a man who tortures a woman mentally, physically or verbally?

It is an offence punishable under section 498A of the Indian Penal Code, 1860, which is imprisonment for a term which may extend to three years and shall also be liable to fine.

56. Mental Cruelty can be pleaded as a ground for devorce.?

Mental Cruelty can certainly be pleaded to claim divorce from the other spouse. Under Section 13(1) (ia) of the Hindu Marriage Act, 1955, either spouse can seek divorce or judicial separation on the grounds of cruelty, which includes mental cruelty. The wife is fully justified in living away from the husband in case she is suffering mental cruelty at the hands of the husband. A petition for divorce or judicial separation can be filed detailing each and every incident of mental cruelty. The instances are required to be specific and should be of such a nature as to be construed of causing mental agony to the wife and should not be merely day to day minor quarrels which normally take place in a married life.

57. After separation I want to give one my houses to her and also give some amount of money. How can I do this. Is any registration required for giving her the house can the husband give any property to the wife at time of divorce?

The husband can give a house or any amount of money to his wife while agreeing for divorce by mutual consent. However, as the consent can always be withdrawn within the period of six months it is always better if the said transaction is carried out when the second consent statement is made after six months of the filing of

the petition and when the divorce decree is being granted. The transaction of property requires registration with the Sub-Registrar. Since, no amount of consideration would be paid by the wife for acquiring the said property, It would be appropriate if a gift deed is executed and registered with the Sub-Registrar, after paying the requisite stamp duty on the same.

58. How can divorce be obtained Hindu Law?

In the event of your being a Hindu, that is Hindu, Sikh, Buddhist or Jain by religion, your would be governed by the provisions of the Hindu Marriage Act, 1955. Divorce under the said Act can be obtained only on the grounds specified under Section 12, whereby a person can seek divorce on the following grounds: (a) If the other party after the marriage had voluntary sexual inter-course with another person. (b) If the other party after marriage has treated the complainant with cruelty. (c) If the other party has deserted the complainant for a continuous period of not less than two years. (d) If the other party has seized to be Hindu by converting to another religion. (e) If the other party has been in curably of unsound mind or has been suffering from mental disorder of such a nature that the complainant cannot be reasonably expected to live with her/him. (f) If the

other party has been suffering from an incurable form of leprosy. (g) If the other party has been suffering from venereal disease in a communical form. (h) If the other party has renounced the world. (i) If the other party has not been heard of being alive for a period of over 7 years. Divorce can also be obtained by mutual

consent by husband and Wife in terms of Section 13 B of the Hindu Marriage Act, 1955. The provisions of the said Section require that the husband and wife should be living separately for a period of more than 1 year and they are not able to live together any further. A joint petition can be filed in this regard and after the filing

of the same the Court grants a period of six months for the parties to come again and make a statement confirming the said consent. It is only after this second consent having been given by both the parties after six months of the filing of the petition for mutual consent, that a decree for divorce is passed by the Court. If

during this period of six months after the filing of the petition, any of the parties withdraws the consent, the divorce can not be granted.

59. What is a will? How do you make it ? How do you register it?

1. A WILL is a legal declaration of the intention of a person with respect to his property or will, which he desires to take effect after his death. WILL is an untitled document which take effect after the death of the person making the Will and it can be revoked, modify or substituted by the person executing the will at any point of his time during his life time. For executing the Will the person must be fully competent, he should not be a minor and should not be person of unsound mind. 2. The Will has to be in writing and has to state that the person executing the same is making it out of his own free will and in a sound disposing state of mind. It has to be signed by the executor of the Will and has to be attested by two witnesses atleast. 3. In the event of the person desiring WILL to be registered, he has to approach the office of the Sub-registrar and has to be

accompanied by the person who have signed as witnesses on the said WILL. The executor of WILL as well as the attesting witnesses have to put their signatures and thumb impressions in the register maintained by the Sub-registrar. There are Sub-registrars for each district and you have to inquire from the concerned office

as to which Sub-registrar you are required to get your WILL registered. The Sub-registrar would be as per the place of the residence of the person executing the WILL.

Competition Law

 Competition Law

1. Introduction

India has embraced globalisation and liberalisation by throwing open its doors for large corporate houses, both Indian and foreign. Earlier, restrictions have been removed, barriers reduced, etc. Even the Monopolies and Restrictive Trade Practices, Act which, for quite some time, was the bane of the Indian Industry has been watered down to near insignificance. It is this background that the Parliament thought it fit to introduce a legislation to curb monopolies and promote competition. Competition is essential for the working of any economy to reduce economic inequalities. The Competition Act, 2002 (“the Act”) is a step in this direction. The Act contains two aspects, one dealing with anti-competitive agreements, abuse of dominant position, etc., and the other dealing with the regulation of certain business combinations, such as mergers, acquisitions, etc. which have an adverse effect on competition. Recently, the Government has appointed the Chairman and two members of the Commission. The Commission is expected to begin hearings on matters of anti-competitive agreements and abuse of dominant positions soon. This Article deals with some of the salient features of the Act dealing with the regulation of business combinations. The provisions of the Act have overriding effect on any other inconsistent statute, e.g., Companies Act, Stamp Duty, FEMA, etc.

2. Background

2.1.Many countries such as the USA have an Anti-trust Law which aims at preventing monopolies and mega mergers which impede to the competition. These laws need to be also considered while structuring a cross-border merger. In UK, mergers and acquisitions may need the approval of the Monopolies and Mergers Commission. For instance, in the USA certain business combinations require filings and clearances with the Federal Trade Commission (FTC) or Department of Justice (DOJ) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the  HSR Act). The HSR Act requires parties to a merger to file certain information before the FTC and the DOJ before the merger proceeds. There is a minimum waiting period after filing the information with these agencies. For instance, the acquisition of Honeywell by GE, ran into various problems under the Anti-trust provisions especially with the European Union. It was probably one of the rare acquisitions in which Mr. Jack Welch failed.

2.2.The U.K. Competition Act, 1998 is also a legislation in this direction. Similar provisions exist under the European Commission Regulations.

2.3.The Act seeks to ensure fair competition in India by the creation of a Competition Commission of India.

3. Business Combinations

3.1.Ss. 5 and 6 of the Act deal with the regulation of certain business combinations. While s. 5 defines the combinations which are covered within the purview of the Act, s. 6 lays down the regulations which would apply to such business combinations.

3.2.Combinations covered by s. 5

In certain cases the:

(i) acquisition of any enterprise(s) by any person(s); or 

(ii) merger / amalgamation of enterprises

shall be treated as a combination of such enterprises and persons (in case of an acquisition) or enterprises (in case of an merger / amalgamation). These cases are as stated hereunder.

3.3. Acquisitions treated as combinations

3.3.1 Any “Acquisition” where:

(a) the Acquirer and the Target Enterprise (i.e., whose control, shares, voting rights or assets are being acquired) jointly have:

 (i) in India assets of a value exceeding Rs. 1,000 crores; or

in India a turnover of a value exceeding Rs. 3,000 crores; or

   (ii) in India or abroad, in aggregate :

(A)assets of a value exceeding US$ 500 million; or

(B)turnover of a value exceeding US$1,500 million

(b)the group to which the Target Enterprise would belong post-acquisition would jointly have:

(i) in India assets of a value exceeding Rs. 4,000 crores; or

in India a turnover of a value exceeding Rs. 12,000 crores; or

(ii) in India or abroad, in aggregate :

(A) assets of a value exceeding US$ 2 billion; or

(B) turnover of a value exceeding US$6 billion

3.3.2 Any acquisition of control by a person over an enterprise in a case where he already has direct or indirect control over another similar enterprise which is engaged in the production, distribution or trading of similar/identical/substitutable goods or services, if:

(a) the Acquirer and the Target Enterprise jointly have:

(i) in India assets of a value exceeding Rs. 1,000 crores; or

in India a turnover of a value exceeding Rs. 3,000 crores; or

(ii) in India or abroad, in aggregate :

(A)assets of a value exceeding US$ 500 million; or

(B)turnover of a value exceeding US$1,500 million

(b)the group to which the Target Enterprise would belong post-acquisition would jointly have:

(i) in India assets of a value exceeding Rs. 4,000 crores; or

in India a turnover of a value exceeding Rs. 12,000 crores; or

(ii) in India or abroad, in aggregate :

(A) assets of a value exceeding US$ 2 billion; or

(B) turnover of a value exceeding US$ 6 billion

3.3.3 Any Merger or Amalgamation in which:

(a) the merged enterprise would have:

(i) in India assets of a value exceeding Rs. 1,000 crores; or

in India a turnover of a value exceeding Rs. 3,000 crores; or

(ii) in India or abroad, in aggregate :

(A) assets of a value exceeding US$ 500 million; or

(B) turnover of a value exceeding US$1,500 million

(b)the group to which the merged enterprise would belong post-merger would have:

(i) in India assets of a value exceeding Rs. 4,000 crores; or

in India a turnover of a value exceeding Rs. 12,000 crores; or

(ii) in India or abroad, in aggregate :

(A) assets of a value exceeding US$ 2 billion; or

(B) turnover of a value exceeding US$ 6 billion

3.4.However, in all the above three cases of an acquisition, acquiring of control or a merger or amalgamation involving a foreign party, it is necessary that the foreign party has got an asset size of at least Rs. 500 crores in India or a turnover of at least Rs. 1,500 crores in India.

3.5.The Value of the assets are to be computed as under:

Book Value of the Assets as per the last Audited Accounts
(-) Depreciation
(+) Value of Intangible assets such as value of brand, goodwill, copyright / patent / registered trademark/ designs/ registered user/ permitted use, etc.
The last audited accounts means those pertaining to the financial year immediately prior to the financial year in which the date of the proposed merger falls. Interestingly, a similar provision has not been drafted in case of acquisitions.

3.6.Definitions

The Act defines certain terms which are used in s.5 and s.6. These are as follows:

(a) Acquisition means directly or indirectly acquiring or agreeing to acquire:

(i) shares, voting rights or assets of any enterprise; or

(ii) control over management or control over assets of any enterprise.

(b)Control includes controlling the affairs or management by:

(i) one or more enterprises, either jointly or singly, over another enterprise or group; or

(ii) one or more groups, either jointly or singly, over another enterprise or group.

(c) Group means two or more enterprises which directly or indirectly are in a position to:

(i)exercise 26% or more voting in the other enterprise; or

(ii)appoint more than 50% of the Board of Directors in the other enterprise; or

(iii)control the management or affairs of the other enterprise.

(d) Enterprise means :

(i) a person or a Government department engaged in any activity (including profession or occupation)

(ii) of production / storage / distribution / supply / acquisition / control of articles or goods or providing services

(iii) investment or the business of acquiring, holding, underwriting or dealing with any securities of any other body corporate

(iv) either directly or indirectly through its units/divisions/subsidiaries.

(e)Person has been defined to include an individual, HUF, firm, company, AOP/BOI, corporation, body corporate incorporated abroad, co-operative society, local authority and every artificial juridical person.

(f)Shares means shares carrying voting rights and includes :

(i) any security which carries voting rights;

(ii)stock unless otherwise distinguished.

Thus, preference shares would not be covered.

4. Regulation of Business Combinations

4.1. No person or enterprise can enter into a combination which causes an appreciable adverse effect on competition within the relevant market in India and if they do then such a combination shall be void. Such agreements are known as Anti-competitive Agreements. For this purpose the term relevant market means the market which may be determined by the Commission with reference to the relevant product market or the relevant geographical market of both markets. Relevant geographic market means a market comprising the area in which the conditions of combination of supply of goods or provision of services or demand for the same are distinctly homogenous and can be distinguished from the conditions prevailing in the neighbouring areas. Relevant product market means a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer. However, these provisions do not apply to any share subscription or acquisition by a FI, Bank, VC Fund pursuant to a loan agreement. The Central Government has power to exempt any class of enterprises in public interest.

4.2.Any person or enterprise which proposes to enter into a combination, must give a notice to the Competition Commission, in the prescribed form disclosing the details of the proposed combination, within 30 days of:

(a) the approval of the proposal relating to the merger or amalgamation, by the board of directors of the enterprises concerned with such merger or amalgamation;

(b) the execution of any agreement or other document for an acquisition or acquiring of control.

After giving the Notice, for a period of 210 days thereof, the combination will not come into effect. Hence, the minimum waiting period is 210 days from the date of the Notice. Such a long waiting period is not only unusual compared to international anti-trust statutes but also undesirable.
The Commission shall form its prima facie opinion as to whether the combination has, or is likely to have, an appreciable adverse effect on competition.

4.3.On receipt of the above Notice, the Commission shall or alternatively it may suo moto if it is of the opinion that the combination is likely to cause, an appreciable adverse effect on competition within the relevant market in India, issue a show cause notice to the parties to response within 30 days of the receipt as to why an investigation in respect of such combination should not be conducted. Any person, may also complain to the Commission that a proposed combination is likely to cause, an appreciable adverse effect on competition or that it would abuse its dominant position.

4.4.In case the Commission, is prima facie of the opinion that the combination has, such an adverse effect it shall, within 7 days from the date of receipt of the response direct the parties to publish details of the combination within 10 working days for bringing the combination to the knowledge or information of the public and persons affected by such combination. Any objection must be filed within 15 days. The Commission has power to call for further information.

4.5.Under section 31, the Commission has power to accept, reject or accept subject to modifications the combination. In all cases where the Commission is of the opinion that the combination has an appreciable adverse effect on competition it has powers to order that:

(a) the acquisition;

(b) the acquiring of control; or

(c) the merger or amalgamation

shall not be given effect to. This provision is quite unusual as it gives the Commission powers to undo even a Court approved scheme of merger. Keeping in mind the fact that a merger scheme involves payment of stamp duty and consists of such other issues it would be quite interesting to learn how the merger would be undone.

4.6. The Commission has a maximum of 210 days to pass its Order in the absence of which it is deemed to have approved the Combination.

4.7. An appeal against the order of the Commission lies to the Competition Appellate Tribunal.

4.8. Concession under Regulations

The Draft Regulations issued by the Competition Commission of India have held that the certain combinations are not likely to cause an appreciable adverse effect on competition in India and hence, they would be exempted from applying to the CCI. Some of the important combinations proposed to be exempted include:

(i) an acquisition of shares or voting rights by the parties, solely as an investment or in the ordinary course of business, of not more than 15% of the total shares or voting rights of the company;

(ii) an acquisition of assets by the parties, not directly related to the business activity of the acquirer or made solely as an investment or in the ordinary course of business, not leading to control of the enterprise whose assets are being acquired except in certain cases;

(iii) an Acquisition of or Acquiring Of Control or Merger or Amalgamation, where the assets or turnover of Rs. 1,000 crores or Rs. 3,000 crores respectively, does not include assets of Rs. 200 crores or turnover of Rs. 600 crores, respectively, of each of at least two of the parties to the combination; or

(iv) an acquisition of or acquiring of control or merger or amalgamation, where the minimum assets or turnover, in India ,of Rs. 500 crores or Rs. 1,500 respectively, does not include assets of Rs. 200 crores or turnover of Rs. 600 crores, respectively, of each of at least two of the parties to the combination;

Thus, several overseas acquisitions by Indian companies of Foreign Companies which do not have any presence in India would not be covered within the purview of the CCI. This is a welcome step towards encouraging overseas buyouts. For example, the acquisition by Tata Motors of Jagaur of UK, would not fall within the CCI’s purview, since Jaguar does not have any presence in India and the Rules provide that both the parties must have at least Rs. 600 crores of turnover in India.

4.9.Till the draft regulations get finalised and the operative sections for regulation of business combinations get notified by the Government, the Commission cannot entertain any hearings in respect of business combinations. Hence, till such time, these provisions would not have any effect.

5. Directors’ Responsibilities

5.1.Under the provisions of the Act, where the person committing any offence is a company then every person who at the time of the offence was responsible for the conduct of the business of the company as well as the company would be directly liable to be punished.

5.2.Further, any director with whose connivance, neglect or active consent any offence has been committed by the company, shall also be deemed to be guilty of the offence and shall be liable to be directed proceeded against and punished.

6. Role of CAs

6.1.Chartered Accountants are authorised to appear before the Commission to represent the Complainant or the Defendant. This is a new area of practice for Chartered Accountants as the number of mergers and acquisitions which India is witnessing is only the tip of the iceberg.

6.2.In case of mergers or acquisitions of the auditee which satisfy the above tests and thus, fall within the purview of the Commission, the CA in his capacity as the Auditor should alert his client about the provisions of the Act and the action which can be taken by the Commission under the Act. By broadening his peripheral knowledge, the Auditor can make intelligent enquiries and thereby provide value added services to his client.

New SEBI Takeover Code Highlights

SEBI Takeover Code amended: Creeping acquisition has been allowed beyond 55 percent upto 75 percent
Background
Securities and Exchange Board of India (‘SEBI’) recently relaxed the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (‘SEBI Takeover Code’) which governs the takeovers of listed
companies in India. As per the existing provisions of the SEBI Takeover Code, no acquirer shall acquire shares or voting rights (taken together with shares or voting rights, if any, held by him or by persons acting in
concert with him) of 15 percent or more in a listed company without making an open offer to acquire a minimum of 20 percent of such listed company’s shares from the public shareholders.

However, regulation 11(1) permits an acquirer (together with persons acting in concert with him) who holds more than 15  percent but less than 55 percent of shares or voting rights in a listed company to acquire additional shares or voting rights not exceeding 5  percent in any financial year (ending on 31 March) without making an open offer to the public shareholders of the listed company. This acquisition (also known
as creeping acquisition) of 5 percent voting rights every financial year without making an open offer is allowed till the voting rights of the acquirer reaches 55 percent.Any acquisition of share or voting right in the company beyond 55 percent would require the acquirer to make an open offer of at least 20 percent of voting rights to the public shareholders.
Amendments to the SEBI Takeover Code 
SEBI has now amended regulation 11(2) to insert a proviso after the first proviso which allows the acquirer, who together with persons acting in concert with him holds, 55 percent or more but less than
75 percent of the shares or voting rights in the listed Company, to acquire either by himself or through or with persons acting in concert with him, additional shares or voting rights upto 5 percent in the listed
company subject to following conditions:
(i) The acquisition is made through open market purchases in normal segment on the stock exchange but not through bulk deal / block deal / negotiated deal / preferential  allotment;
or
The increase in shareholding or voting rights of the acquirer is pursuant to a buyback of shares by the listed company;
(ii) the post acquisition shareholding of the acquirer together with persons acting in concert with him shall not increase beyond 75 percent

Additionally to bring consistency with the above amendment, change in Regulation 11(2A) is made, whereby consolidating the shares above  55 percent but less than 75 percent, open offer is  not mandatory, as
above amendment allows creeping acquisition beyond 55 percent. It is interesting to note that, even now preferential allotment is not permitted for acquiring shares or voting rights above 55 percent without
making an open offer.

Source: SEBI (Substantial Acquisition of Shares and
Takeovers)(Amendment) Regulations, 2008 dated 30 October 2008 to 
give effect to the Press Release dated 27 October 2008 to amend SEBI 
Takeover Code.

Redevelopment Procedure of Old Housing Societies in Mumbai

REDEVELOPMENT PROCEDURE OF OLD HOUSING SOCIETIES IN MUMBAI

Redevelopment of housing societies is usually burdened with bitterness and complaints of high-handedness and corruption against the Managing Committee. Hence, with a view to ensure transparency in societies seeking to undertake redevelopment projects, the state co-operative department has, for the first time, issued guidelines for societies to follow under section 79 (A) of the Maharashtra Co-operatives act, 1960.

The guidelines are issued by a committee comprising the co-operatives commissioner and Cidco chairman pursuant to a deep study of complaints by members of Housing Societies undertaking the redevelopment of their property. According to an important feature in the guidelines, a redevelopment scheme has to be approved by the general body only if three-fourths of the society members are present at the meeting.

The special general body has to approve the bid of the successful bidder in a meeting attended by the registrar. The entire proceedings have to be video-recorded. Once the agreement is accepted in terms of area and corpus fund, it cannot be revised. The successful bidder has to give a bank guarantee equivalent to 20% of the total project cost to show his financial strength, and proof that he will not throw away the project midway.

The Developer has to complete the redevelopment project in two years, or a maximum of three years. The development agreement must be signed on carpet-area basis. Most importantly, if, for some reason, the successful Developer is unable to complete the project, he cannot sell his agreement to another Developer.

It has been often noticed that during the process of redevelopment, the terms of Development Agreements as agreed upon, are later twisted and grossly violated by the Developers and the ground rules of MRTP and DCR by unlawful planning are flouted by constructing additional/unauthorized areas that are beyond the entitlement (i.e. beyond the plot FSI and the TDR/FSI loaded) for their hidden financial gains. The buyers of such unlawful flats/properties land themselves in deals that lead to litigation at a later date.

At times, upon the completion of the Project, there are major inconsistencies and discriminatory features noticed in the approved plans v/s actual layouts, measurements and other aspects in respect of the constructions of residential area and the commercial area which may not be in conformity with the Development Agreement originally executed between the Society and the Developer.

Under Right to Information Act, the Housing Society can procure all the Plans and the related documentary evidences from MCGM duly attested by two Senior Engineers of the Building Proposals Dept. to study the anomalies which exist in execution of the entire redevelopment project even after the occupancy certificate is issued.

It has also been observed that the deviation of vital Rules and Guidelines of MRTP/MCGM/DCR are conveniently overlooked by few corrupt and dishonest but “Sympathetic Officials” of MCGM and the final plans with numerous anomalies so submitted by the said Developer are approved by them without verifying the justifiability or its conformity with the Development Agreement executed with the Society.

Further, it is learnt that in many Societies, the Managing Committees, who execute the documents with the Developers, do not possess any legal holding as they have never filed/nor aware of filing the Indemnity Bond in Form M-20 on a Stamp required under Section 73(1AB) and Rule 58A of the Maharashtra Cooperative Societies Act 1960.

The members who fail to execute such Bonds within the specific period are deemed to have vacated his office as a member of the committee and no legal effects can be given to the documents executed by them with the Developers.

STAGES OF REDEVELOPMENT

1. Offer letter to the society

2. Terms and conditions with the society

3. Agreement with the society

4. Sanction from MCGM in favour of the society

5. Loading of TDR in the society’s name

6. Obtaining the IOD

7. Shifting of the members

8. Demolition of the building

9. Obtaining the CC

10. Construction of the new building

11. Obtaining the OC

12. Shifting the old members

Offer letter to the society: The Housing Society is required to advertize in 2 leading news papers inviting the sealed tenders from the Developers and a Redevelopment Committee is formed to shortlist atleast 3 Developers on merits and the comparative data is placed before the SPGM for final selection. The selected Developer is informed accordingly and his terms are invited in writing as an Offer letter to the society

Terms and conditions with the society: The first step towards the re-development is agreeing on the basic terms and conditions between the members and the Developer. The broad terms and conditions will include extra area, corpus money, shifting charges, alternate accommodation, time of re-development, amenities in the new building, etc.

Finalizing the plans with members: After due consultation with all the members, the plan will be made to suit the requirements of the existing members and will be approved by them before applying for sanction from MCGM

Agreement with the society: The execution of the development agreement will be done once the above two points have been cleared by both the parties and after the draft copy of the agreement have been approved by the solicitors of both the parties. It is possible to appoint a common solicitor so as to reduce the time in execution of the document

Sanction from MCGM in favour of the society: After the execution of the development agreement, plans are put up for sanction from MCGM with regards to the entire layout as well as the concession plans in favour of TWO FSI (i.e. plot area + TDR purchased from open market). This step makes the society feel safe and confident towards the Develop

Loading of TDR in favour of the society: On receipt of the plans from MCGM approving the loading of TDR, the Developer will purchase the TDR from the open market in the name of the society and get the same deducted and loaded from MCGM. This step is taken with the intention of making the society feel secure about the entire development process

Obtaining the IOD: After the TDR is loaded, the IOD is obtained from the MCGM, the Developer then starts fulfilling all the conditions as mentioned in the IOD before obtaining the Commence Certificat

Shifting of the members: The members will feel lot more confident after the IOD is been obtained from the MCGM towards the entire development of TWO FSI. The members will now shift into their alternate accommodation as a pre-requisite before demolition of the building which is a must before obtaining the CC from MCGM

Demolition of the building: Once the members have shifted into their alternate accommodation, the demolition of the building will take place either all the wings simultaneously or phase wise depending upon the scheme of re-development. Usually about three months are given to the members from the date of execution of the development agreement before asking them to shift to the alternate accommodation

Obtaining the CC: The IOD approval and demolition of the building will be followed by the issue of the CC (plinth level) by the MCGM which shall enable the Developer to start the construction work and after the plinth lines are verified by the MCGM officers, the further CC is granted for the complete building

Construction of the building: The building construction work will began in full earnest as per the approved plans by the MCGM taking into consideration the various safety factors to be considered during the construction work. The quality and the amenities will be provided as per agreed terms and conditions

Obtaining the OC: The last step before the construction work is termed as complete is obtaining the Occupation Certificate enabling the Developer to allot the occupation to the old as well as the new member

Shifting the old members: On receipt of the Occupancy Certificate the Developer can lawfully allow the possession of the flats to be taken over by their owners

DUTIES AND FUNCTIONS OF THE DEVELOPER

1. The Developer to demolish the building existing in the plot and construct new multi storied buildings taking into account the earthquake resistant factors as directed by The Municipal Corporation of Greater Mumbai. The new building should have stilt for car parking and should consist of _____ stories as per approved plans. The final plans are to be prepared after due consultation with the managing committee and understanding their requirements.

2. The Developer shall be responsible to obtain all the necessary approvals from The Municipal Corporation of Greater Mumbai and all other statutory and Government offices and departments which will include:

1.Development Planning Remark or Town Planning Remark:

MCGM (Dev. Dept.)

2. Survey of the entire plot with regards to the area and topography of the plot, existing plot boundary and existing structures (Developer’s Architect)

3.Intimation of Disapproval (IOD): MCGM

4.Property Tax Assessment NOC: MCGM (Assessment Department)

5.Hydraulic Engineer No Objection Certificate: MCGM (Hydraulic

Department)

6.Storm Water Drainage No Objection Certificate: MCGM

7.Sewerage No Objection Certificate: MCGM

8.Traffic Deptt. of Municipal Corporation of Greater Mumbai No

Objection Certificate: MCGM

9.Urban Land Ceiling NOC: Competent Authority in Collector's

Office

10. Tree No Objection Certificate: MCGM (Tree Authority)

11.Non-Agricultural Permission: Collector's Office

12.Civil Aviation No Objection Certificate: Airport Authority of India

13.Pest Control No Objection Certificate: MCGM (PCO)

14.MTNL No Objection Certificate: MTNL

15.Chief Fire Officer's No Objection Certificate: Fire Department

Office

16.Commencement Certificate: MCGM

17. Lift Inspection No Objection Certificate:Inspector of Lifts, PW

18. Occupation Certificate (OC):MCGM

19.Water Connection Certificate under section 270A:MCGM

20.Drainage Completion Certificate:MCGM (Water Department)

21.Building Completion Certificate (BCC):MCGM

22.TDR Loading:MCGM

23.Building Demolition Work:Contractor appointed for demolition

work

24.Soil Testing Report:The Concerned Laboratory

Please ensure to collect all the listed certificates from the Developer/Developer as the same must be with the custody of the Housing Society once the redevelopment of the property is completed and the occupancy certificate is issued by MCGM to rehouse the members.

3. The Developer should provide the following infrastructure after the completion of the re-development work:

a. Complete paving around the building finished with suitable materials

b. Storm Water Drain

c. Sewerage lines

d. Security arrangements

e. Garden and landscaping (wherever possible)

f. Pipe gas line (as per availability)

g. Internet facility (as per availability)

h. Society office

i. Adequate car parking spaces

The Developer has to provide extra areaover and above the existing carpet area to all the members free of cost in the newly constructed building. The flower bed as open balcony area should be provided as permitted by The Municipal Corporation of Greater Mumbai. (Area will be approx sq.fts.)

4.The Developer should pay the society/individual member, a corpus fund of Rs……..towards granting of development rights. The above amount is helpful in paying all outgoings of the existing members in the newly constructed flats. The corpus amount is worked out on the basis of Rs……..per sq.fts on the existing carpet area.

5.The Developer should provide displacement compensation towards temporary alternate accommodation to the affected members during the construction work at the rate of Rs…… per sq.ftson the existing carpet area. The compensation has to be paid from the time the vacant possession is given by the members for demolition till the construction of the new building/s is/are complete and the peaceful possession of the new flats given by the Developer.

6.The society shall accept and admit the prospective/additional flat owners of the newly constructed building/s as members of the society and treat them at par with existing members.

7.The Developer should prepare a tentative layout of the new building which has to be shown to the members as and when required.

8.The Developer may tie up with leading financial institutions and banks and arrange for necessary approvals for housing loans for the existing members and prospective clients.

9.The Developer should complete the entire re-development work within a period of ___ months or as agreed with the Society after all the legal formalities and Municipal approvals are obtained. The initial Municipal approvals will take about three months depending upon the existing rules and regulations governing the re-development work.

STANDARD LIST OF AMEMITIES

Structure:The structure would be designed as Multi Frame Structure of RRC with provisions of Earth Quake resistance features.

Elevation and Planning:Exquisitely designed elevation features may be provided along with careful and detailed planning with plenty of light and ventilation in each rooms and minimum wastage space with proper co-ordination of all rooms. The building may be provided with sand faced plaster on the external face water proofing plaster and chicken mesh should be used as required

Entrance Lobby:The entrance lobby may be elegantly designed with Granite tile and POP false ceiling.

Doors: All the doors should be provided with Marine Flush Doors and CP frame with cover mouldings. The main door must be provided with good quality night latch, safety chain, tower blot and attractive handle. Internal doors may be provided by cylindrical mortise type locks.

Windows:All the windows of rooms and toilets should be provided with marbles frames with designed mouldings. Heavy section powered aluminum sliding windows with 5 mm tinted glass may be provided with imported bearings and fittings.

Plaster of Paris:Beautifully designed cornice has to be provided in living room. Walls of all the rooms to be finished with POP panning and grooves to be provided on top of the skirting

Electric work:All the electric wiring work must be done as per the norms of Reliance Energy using 1/18, 3/20, and 7/20 flexible wires with use of MCB and ELCB for safety of the flat owners. Latest available switches of reputed company must be provided. Extensive electric layout comprising of the following points to be provided:

Spot Lights (living room and bed room)

Tube lights

Fans

A.C. (living room and bed room)

Geysers

Exhaust fans

Aqua guard

Mixers

Washing machine

Refrigerator

T.V. cable

Gas pipe line (if available)

Refrigerator

T.V. cable

Gas pipe line (if available)

Plumbing:All the plumbing pipes, fixtures and fittings should be strictly as per IS Norms. CP plumbing fixtures (ESS ESS or JAGUAR) should be be provided in all toilets with matching sanitary ware of reputed company. Plumbing points should comprise of wall mixtures, showers, taps, washing machines and aqua guard.

Flooring and Tiling: Marble or granite or granite flooring should be provided with matching skirting of 3”. Toilets should have full dado height of coloured glaze tiles of reputed company of Indian or imported make with designer borders and motifs.

Kitchen:Granite kitchen platform comprising of cooking and serving platforms may be provided with moulded facia patti and vertical sides. Stainless steel sink has to be provided.

Colour:The entire flat should be painted with Synthetic enamel paint including doors and ceilings. The external walls of the buildings must be painted with good quality cement paint.

Lift:Lift of OTIS/Johnson make may be provided with all the safety features.

Terrace: The terrace should be finished with china chips and high parapet wall with corner lights and water points.

Compound wall and gates: New compound wall should be constructed with proper design and sufficient electric points. M.S. main gate should be provided for safety.

Paving: The entire compound wall should be paved with concrete and finished with heavy duty checkered tiles.

The task of satisfactory completion of redevelopment of any Housing Society and to get back their members in their dream houses is not difficult provided the Office Bearers and the Committee Members are honest and justify their respective posts in the welfare and well being of the members of the Society.