Explain kinds of Mortgage?

Kinds of mortgage

Simple Mortgage [Section 58(b)]

Clause (b) of Section 58 reads:

Simple mortgage.—Where, without delivering possession of the mortgaged

property, the mortgagor binds himself personally to pay the mortgage-
money, and agrees, expressly or impliedly, that, in the event of his failure to
pay according to his contract, the mortgagee shall have a right to cause the
mortgaged property to be sold and the proceeds of sale to be applied, so far
as may be necessary, in payment of the mortgage money, the transaction is
called a simple mortgage and the mortgagee a simple mortgagee.

The basic elements of a simple mortgage are:

1. The mortgagor must have bound himself personally to repay the

loan;
2. The possession of the property is not given to the mortgagee; and
3. To secure the loan he has transferred to the mortgage the right to
have the specific immovable property sold in the event of his failure
to repay.

Mortgagor’s Personal Obligation

The fundamental element of a simple mortgage is the personal obligation to
pay on the part of the mortgagor. Such personal liability or obligation to pay
may be expressed or implied from the terms of a transaction since a promise
to pay arises from the acceptance of the loan.

The promise to pay is implicit in the borrowing transaction itself but it may
be displaced by the terms of the mortgage transaction for instance in the
case of a usufructuary mortgage.

No Delivery of Possession
Possession remains with the mortgagor in the case of a simple mortgage.
The security which is obtained by the mortgagee is of the mortgaged
property, not of the rents and profits accruing from it. As per Section 68, if a
simple mortgagee sues for enforcement of his security, a decree for
possession would be illegal. It would also not operate as foreclosure rather it
would convert a simple mortgagee into a mortgagee having possession.

Right to cause the Property Sold

The mortgagee is empowered to sell the property in the case of non-payment
of the mortgaged money. However, the power of sale is not to be exercised
without the intervention of the court. This implies that the mortgagee needs
to get a decree from the court to execute the sale. Upon the sale of property
by the intervention of the court, the mortgagee shall get the money
advanced by him with interest and the remaining portion of proceeds of sale
shall be given to the mortgagor whose property was sold.

Registration
A simple mortgage can be created only through a registered document.
According to Section 59, even when the sum of money secured is less than
rupees 100, a simple mortgage needs to be effected by a registered
instrument.

Mortgagee’s Remedy
In case the mortgagor fails to repay the loan within the stipulated date, the
following two remedies are available to the mortgagee:

1. Since in a simple mortgage the mortgagor holds a personal

obligation to repay the loan, the mortgagee may sue the mortgagor
personally for the recovery of the money. In such a case, he shall
get a simple money decree.
2. The mortgagee may also move to the court for the sale of
mortgaged property in order to recover his money. In such a case,
he obtains a decree for the sale of the property.
However, the mortgagee may put both the cause of actions in one suit. He
may sue the mortgagor personally and may also request the court for a
decree in his favour for the sale of the property but in both cases, the suit
must be filed within 12 years from the date on which the loan i.e. the
mortgage money becomes due.

Mortgage by Conditional Sale [Section 58(c)]

Clause (c) of Section 58 reads:
Mortgage by conditional sale.—Where, the mortgagor ostensibly sells the
mortgaged property— on condition that on default of payment of the
mortgage money on a certain date the sale shall become absolute, or on
condition that on such payment being made the sale shall become void, or on
condition that on such payment being made the buyer shall transfer the
property to the seller, the transaction is called mortgage by conditional sale
and the mortgagee a mortgagee by conditional sale: Provided that no such
transaction shall be deemed to be a mortgage unless the condition is
embodied in the document which affects or purports to affect the sale.

The concept of a mortgage by conditional sale (known as ‘bye-bil-wafa in

Islam) was introduced by the Muslims due to the prohibition in their religion
to not take interest on the money which is lent by way of loan. This type of
mortgage enabled them to realize their principal amount as well as interest,
at the same time keeping their conscience clear.

Basic elements of a mortgage by conditional sale are:

1. The mortgagor must ostensibly sell the property to the mortgagee.

2. There must be a condition on such sale that either,

 on the repayment of the debt on a certain date,

 the sale shall become void or the buyer shall transfer the property
to the seller, or in default of payment on the agreed date, the sale
shall become absolute.
 The condition must be contained in the same document.
In other words, when the mortgagor ostensibly sells the mortgaged property
to the mortgagee with a certain condition such as:

1. If the mortgagee makes any default on repayment of the debt (if

the loan is not repaid), the sale would become absolute and binding,
or
2. If the mortgagee does not make any default in the payment
(repayment of the debt has been made), the sale would become
void, or
3. If the mortgagee makes the payment, the buyer shall transfer the
mortgaged property to the seller (the mortgagor shall transfer the
property back to the mortgagee), such a transaction is called a
mortgage by conditional sale.
However, it is to be noted that no such transaction will be considered to be a
mortgage where no condition is mentioned in the same document which shall
affect the sale.

Condition in the Same Deed

The Proviso provided under clause (c) of Section 58 brought about a
significant change. Section 19 of the Transfer of Property (Amendment) Act,
1929 led to the inclusion of the proviso:

Provided that no such transaction shall be deemed to be a mortgage unless

the condition is embodied in the document which affects or purports to affect
the sale.

It states that any deed which intends to effect sale would be termed a
mortgage by conditional sale only when it fulfills the above-mentioned
elements. This amendment is not retrospective in nature. After this proviso,
for a transaction to be treated as mortgage by conditional sale and not a sale
itself the condition of repurchase must be included in the same document
that provides for ostensible sale.

With the amendment in the clause, great emphasis is placed on inculcating

the provision of repurchase in the original sale deed itself rather than the
transaction being carried out through two documents (one being the sale
deed, other being the document containing conditions of reconveyance).
Where they are in separate documents the mortgagor then the nature of
transaction would not be a mortgage by conditional sale even if they are
executed simultaneously.

The intention of the Parties

It must be kept in mind that documents containing reconveyance conditions
would not in any way claim to be mortgaged. The intention of the parties is
one of the crucial factors to determine the nature of the transaction and
evidence needs to be produced before the court if one’s claim is in contrast
to the written words of the deed in question. (Pandit Chunchun Jha v. Sheikh
Ebadat)

Personal Liability
In a mortgage by conditional sale, there is no personal liability on the part of
the mortgagor to pay the debt and consequently, the mortgagee is not
permitted to make other of his properties a part of this transaction. It is an
exception to the rule of No Debt No Mortgage.

Absolute Ownership
The Privy Council in the case of Thumbuswamy v. Hossain Rowthen observed
that the essential characteristic of a mortgage is that on breach of condition,
the sale deed would be executed itself and the transaction would become an
absolute sale without any kind of accountability between the parties.
The mortgagee does not have possession of the property in this type of
mortgage i.e. it gets only qualified ownership which may lead to absolute
ownership in case of default by the mortgagee.

Remedy Available
The remedy with the mortgagee is by way of foreclosure and not sale, which
is possible only through a decree of the court. The mortgagee can file a
decree for foreclosure according to Section 67 of TPA, Rules 2 & 3 of Order
34, CPC only when the mortgagor does not pay the amount on time and the
sale becomes absolute.

Usufructuary Mortgage [Section 58(d)]

Clause (d) of Section 58 reads:

Usufructuary mortgage.—Where the mortgagor delivers possession or

expressly or by implication binds himself to deliver possession of the
mortgaged property to the mortgagee and authorises him to retain such
possession until payment of the mortgage-money, and to receive the rents
and profits accruing from the property or any part of such rents and profits
and to appropriate the same in lieu of interest, or payment of the mortgage-
money, or partly in lieu of interest partly in payment of the mortgage money,
the transaction is called a usufructuary mortgage and the mortgagee a
usufructuary mortgagee.

The basic elements of usufructuary mortgage are:

1. The mortgagor either delivers possession or expressly or impliedly

binds himself to deliver possession of the mortgaged property to the
mortgagee.
2. The mortgagor authorises the mortgagee till the payment of the
mortgage money is satisfied:

 to retain such possession;

 to receive the rents and profits or any part of such rents and profits
arising from the property; and
 to appropriate such rents and profits in lieu of interest, or payment
of the mortgage money, or partly in payment of the mortgage
money.

Delivery of Possession
The possession of the mortgaged property is delivered to the mortgagee by
the mortgagor as a security for the payment of mortgage money. The
mortgagee is entitled to retain the ownership of the property till the debt
remains unsatisfied. The physical delivery of possession is not necessary to
be made at the time of execution of the deed and express or implied
undertaking may be given by the mortgagor to deliver possession.

Rent and Profits

The mortgagee is entitled to receive rent and profits accruing from the
mortgaged property till the money is repaid. The method by which the rents
and profits are to be appropriated depends on the terms of the mortgage
deed. Such rents and profits or part of the rents and profits may be
appropriated:

1. in lieu of interest,
2. in lieu of principal, or
3. in lieu of principal and interest.
In the first case, the mortgagor recovers possession at the time of the
payment of the principal amount. In the second case, the mortgagor
continues to pay interest and becomes entitled to recover possession once
the rents and profits obtained by the mortgagee become equal to the
principal amount. In the last case, the mortgagor does not recover
possession until the principal and interest are paid from the rents and
profits.

No Personal Liability of the Mortgagor

The mortgagor does not take any personal responsibility for the payment of
mortgage money in the case of a usufructuary mortgage. The mortgagee is
required to utilise rents and profits from the property for the satisfaction of
his mortgage money. There is no time limit whatsoever for the mortgage to
subsist since it is difficult to predict the time within which the debt will be
satisfied.

Mortgagee’s Remedies
The mortgagee can sue for possession or recovery of advanced money if the
mortgagor fails to deliver possession of the property but if he has been given
possession, his only remedy is to retain property till his debts are satisfied.
The right of foreclosure or sale is not available for the usufructuary
mortgagee. The mortgagee enjoys the advantage of repaying himself.

Rights of Usufructuary Mortgagor

A usufructuary mortgagor has been given a right under Section 62 to recover
possession of the mortgaged property from the mortgagee in the cases
where:

1. The mortgagee was authorised to pay himself the amount of

mortgage money from the rents and profits of the property and the
mortgage money is paid,
2. The mortgagee is authorized to pay himself from the rents and
profits and the terms stipulated for the payment of the mortgage
money have expired and the mortgagor pays the mortgage money
or balance of the same to the mortgagee or deposits it in the court.

English Mortgage [Section 58(e)]

Clause (e) of Section 58 reads:

English mortgage.—Where the mortgagor binds himself to repay the

mortgage money on a certain date, and transfers the mortgaged property
absolutely to the mortgagee, but subject to a proviso that he will re-transfer
it to the mortgagor upon payment of the mortgage-money as agreed, the
transaction is called an English mortgage.

Basic elements of an English mortgage are:

1. There is a consensus to pay the amount on the due date. The

mortgagor has to repay the mortgage money on the due date.
2. There is an absolute transfer of property to the mortgagee.
3. Such absolute transfer needs to be subject to a proviso that the
mortgagee will transfer the property to the mortgagor upon
payment of mortgage money on the agreed date.
In the case of English Mortgage, the mortgagor transfers the ownership of
the mortgaged property absolutely to the mortgagee as security. The
mortgagee shall return or re-transfer the property once the mortgagor
repays the amount as agreed on a particular date.

Personal Liability
In an English mortgage, there is a personal liability of the mortgagor to
repay the amount of mortgage debt on a certain date as agreed. An
agreement to pay is an important part of such a mortgage.

Remedy Available
In case of default by the mortgagor, the remedy available with the
mortgagee is to sell off the mortgaged property and recover himself.

No Absolute Interest
The property is transferred absolutely but it is subject to the provision of re-
transfer of that property if the mortgagor repays the amount. Therefore,
interest is transferred which is subject to the right of redemption.

Where the mortgagor absolutely transfers the property to the mortgagee and
the mortgagor is committed to repaying the money to the mortgagee on a
fixed date. Two circumstances are prevalent in this scenario:

1. Mortgagor repays the amount: If the mortgagor repays the agreed

upon to the mortgagee on the date specified, the property which
was absolutely transferred by him shall be reconveyed to the
mortgagor.
2. Mortgagor makes default in payment: If the mortgagor does not
repay the amount on the mentioned date, then the remedy with the
mortgagee is to sell off the property and recover its debt. However,
there is a personal liability on the mortgagor to pay the debt.

Right of the Mortgagee

The mortgagee in this form of mortgage gets the right of possession whether
the right of entry is expressed or not, and can retain the same till the said
amount is not paid to him. But when the mortgagor is in possession he is
entitled to profit but is not accountable to the mortgagee. However, where
the mortgagee is in possession and is enjoying the profits from such
property, it shall apply them in reduction to mortgagees dues.

For instance, B, a mortgagor absolutely sells the property to A through a sale

deed. Here if B makes any default, A has to do nothing except registration of
the sale deed, as an absolute right has been given to A.

Mortgage by deposit of title deeds (Equitable

Mortgage) [Section 58(f)]
Clause (f) of Section 58 reads :

Mortgage by deposit of title-deeds.—Where a person in any of the following

towns, namely, the towns of Calcutta, Madras, and Bombay, and in any other
town which the State Government concerned may, by notification in the
Official Gazette, specify in this behalf, delivers to a creditor or his agent
documents of title to immovable property, with intent to create a security
thereon, the transaction is called a mortgage by deposit of title-deeds.

In English Law, this type of mortgage is called an ‘equitable mortgage’ as

opposed to a ‘legal mortgage’ because there is just a deposit of a document
of the title without writing or without any other additional formalities. The
intention of the legislature in providing such a mortgage is to give facilities to
the mercantile community in situations where it may be necessary to raise
money all of a sudden before any opportunity of preparing a mortgage deed
can be afforded. Thus, this type of mortgage does not require any writing,
and being an oral transaction is not affected by the Law of Registration.

The basic elements of this type of mortgage are:

1. There must be a debt.

2. There must be a deposit/delivery of the title deeds.
3. There is an intention that the deeds shall be security for the debt;
and
4. Territorial restrictions
It is important to note that such a mortgage can be made only in certain
areas and not everywhere in India. The said restriction to certain areas
means the place where the deeds are to be delivered and not the situation of
the property mortgaged. Also, a deposit of deeds beyond that area will
neither create a mortgage nor an exchange.

Existence of Debt
A debt may be existing or future in nature. A transfer of an interest in any
property to secure the payment of money advanced or to be advanced, or an
existing or future debt, or the performance of any engagement which results
in a pecuniary obligation is said to be a mortgage and clause (f) containing
equitable mortgage gives just one of the modes of creating mortgage.

Deposit of Title-Deeds
It is not necessary to make physical delivery of documents, a constructive
delivery of documents is sufficient. A valid equitable mortgage does not
require all the documents of title to be deposited or the documents deposited
to show a complete title. It is sufficient if the deposited deeds are bona fide,
relate to the property, and are material evidence of title. If any title of deed
is not shown at all in the deposited document and there are documents in
existence showing his title to the property but they are not deposited then an
equitable mortgage is not created.
Intention to Create Security
The gist of the transaction lies in the intention that the title deeds shall be
security for the money borrowed (debt). Merely handing over the title deeds
to Mr. X by Mr. Z does not create a mortgage. The deeds need to be
delivered in the performance of that agreement that they are security for the
debt.

The intention for creating security is a question of fact, not of law, which
needs to be determined in all cases just like any other fact-based on
presumptions and oral, documentary, or circumstantial evidence.

Anomalous Mortgage [Section 58(g)]

Clause (g) of Section 58 reads:

Anomalous mortgage.—A mortgage that is not a simple mortgage, a

mortgage by conditional sale, a usufructuary mortgage, an English mortgage,
or a mortgage by deposit of title deeds within the meaning of this section is
called an anomalous mortgage.

In order to protect various customary mortgages prevailing in different parts

of the country, clause (g) was enacted by the legislation. An anomalous
mortgage is said to be a combination of two or more mortgages.

This section shall be read with Section 98 of the TPA which reads :

Rights and liabilities of parties to anomalous mortgages.—In the case of an

anomalous mortgage the rights and liabilities of the parties shall be
determined by their contract as evidenced in the mortgage deed, and, so far
as such contract does not extend, by local usage.

Such agreement which is made between the mortgagor and the mortgagee
according to their terms and conditions is called an anomalous mortgage.
Where it is not a simple, usufructuary, mortgage by conditional sale, etc. is
termed as an anomalous mortgage.

For instance, a usufructuary mortgage may also have the right of sale (as
stated above, a usufructuary mortgage only possession is given to the
mortgagee and it does not have the right of sale). Here, possession of the
property is given to the mortgagee for a certain period with a condition that
on non-repayment of debt the mortgage shall be deemed as mortgage by
conditional sale. Thus, making it a usufructuary mortgage as well as a
mortgage by conditional sale, making such mortgage an anomalous
mortgage.

Remedy Available
In this case, the mortgage has the right of ‘foreclosure’ as well as ‘sale’ if the
agreement of mortgage permits the same; and if the debt is not repaid, the
mortgagee would become the owner of the property.

Mortgagor’s Right of Redemption

The right of redemption can be exercised by the mortgagor through
mortgage deed and can be exhausted only if there is an agreement between
the parties, or by way of a decree of the court, or through any statutory
provision which prohibits the mortgagor from redeeming the mortgage. The
redemption right of mortgagor comes into existence when payment is made
to the mortgagee, it is only when this right can not be exercised is due to the
act of parties.

There are two other terms as well which are used in relation to mortgage,
which the reader must know. These are:

Sub mortgage
Where a mortgaged property is mortgaged again is termed as sub mortgage,
or where the mortgagee mortgages its interest in the said property.

For instance, where Mr. X mortgages his house to Mr. Z for ₹15,000 and Mr.
Z further mortgages its mortgagee rights( it can be the right to sue the
mortgagor in case of default or possession, rents, etc) on the property to Ms.
B for ₹5,000. Here Mr. Z created a Sub Mortgage.

Puisne mortgage (also called pari pasu mortgage)

When the mortgagor mortgage a property to one person and mortgages the
same property to another person in order to secure another loan, the second
mortgage is termed as Puisne Mortgage.

For instance, the property value of ‘Z’ is ₹1,00,00,000 (1 crore) has been
given as security to the ‘Bank of Baroda’ for the loan of ₹10,00,000 (10
lakh). If an additional loan is required, the same can be taken from another
bank due to the difference in interest rate. So here the same property can be
used as security for securing another loan from ‘Syndicate Bank’ of
₹5,00,000 (5 lakh). This transaction of taking a loan from ‘Bank of Baroda’
would be referred to as the first mortgage while the loan from ‘Syndicate
Bank’ would be referred to as the second or puisne mortgage. Here syndicate
bank becomes puisne mortgagee and can recover its debt once the first
mortgagee i.e. Bank of Baroda claims its money.

A puisne mortgage is allowed only after the 1st mortgagee permits to use the
same property as security for another loan, by the valuation of the
mortgaged property.

Explain in brief procedure to be followed for Redevelopment of building in a Co-operative Housing

Society?

Redevelopment is the process of demolishing an existing building altogether and constructing a

new one. It is a massive undertaking that requires a highly proactive and careful approach on
behalf of the housing society. Let’s dive into the specifics of redevelopment and its many
components. steps in redevelopment of society

What is the procedure for the redevelopment of a housing society?

Before opting for redevelopment, the society must complete a Structural Audit of the existing
building. Once that is accomplished, you’d have to consider the below-mentioned steps.

1. Call a Special General Body Meeting (SGM)

As per the new rules of redevelopment of society the managing committee should convene
a special meeting of the members to discuss the redevelopment project. The bye-laws state that
75% of the total number of members should be in agreement with the redevelopment project
before it can be officially undertaken. (According to a redevelopment law amendment in
Maharashtra, older and smaller buildings only need 51% of member approval). It is also
recommended that a special redevelopment committee be set up to supervise the entire process.

2. Get quotations from Architects/Project Management Consultants (PMC)

The Committee should invite bids from at least 5 architects/PMC and present their quotes to the
members before zeroing in on one of them in another SGM. They should be empaneled with the
government or a legitimate authority and have a good reputation in real estate development. The
members are allowed to give valid inputs and suggestions throughout the process.

3. Submit proposal for Building Redevelopment Project

After finalising terms and conditions, scope of work for the project with the architect/PMC, the
committee must submit a proposal for the said project.

4. Receive Project Report

Within two months of their appointment, the architect/PMC will present to the committee a
Project Feasibility Report. This report considers factors such as Floor Space Index (FSI) and
Transfer of Development Rights (TDR) with respect to total residential area, common spaces,
gardens, etc. The Report is made available to all members of the society and suggestions are
invited before any approvals are made.
5. Invite Tenders from developers
The Architect/PMC prepares a Tender document to receive competitive bids from developers.
One primary requirement is decided, which cannot be changed. This could be carpet area or
corpus fund (an amount paid by the developer due to redevelopment). In a subsequent SGM
attended by the officials of the developers, all the tenders are discussed in open in the presence of
the members.

6. Choose a developer
The Architect/PMC makes a comparative study of the tenders considering factors such as
financial expenses, market reputation, technical soundness, successful projects of each developer
and shortlist at least five. In accordance with the redevelopment rules, one of them is selected by
the 3/4th majority of the members and the project can be initiated after making an agreement with
the selected developer.

What are the documents needed for redevelopment?

Legal documents needed are society registration certificate, conveyance deed (necessary for self-
development projects), sale deed, title certificate, a certified property card (showing ownership in
the name of society), the original building plan, structural audit report, redevelopment agreement,
copy of new approved plan, flat-wise carpet area list, Development Plan (DP) remark (details of
the land and its surrounding area), electricity bill, water bill, and all other legal documents
pertaining to the land and the buildings.

Self-redevelopment of a housing society

In recent times, more and more societies have started to opt for self-redevelopment, a process in
which the builder/real estate developer is not involved in the equation at all. Societies hire
architects/contractors and carry out the entire process by themselves. By choosing this option, the
profit remains in the hands of the society and the possibility of fraud, delayed construction, loss
of FSI does not occur. The members end up getting a higher incremental carpet area and the
entire profit on the project gets divided equally among the members.

Financial loans and government schemes are available for self redevelopment. As of January
2019, the government of Maharashtra is already considering giving a boost to the self-
redevelopment model by sanctioning Rs.780 crore to redevelop 19 housing societies. In Mumbai
alone, around 5800 projects are stalled due to glitches or setbacks at the hands of developers.
Reportedly, around 50% of co-operative housing societies in Mumbai are in need of
redevelopment. It was declared in March that the government will set up a special panel to
incentivise self-redevelopment projects, especially in the suburbs. Mumbai Bank is giving a loan
of Rs 50 crore per project. Other states are expected to follow suit in lieu of affordable housing
initiative.

What is corpus fund in redevelopment?

In general terms, Corpus Fund meaning can be referred to as a capital fund; an amount kept
aside for an organization/entity to operate, exist and maintain itself. These funds are not
meant to be utilized for the attainment of any objectives and are accrued through voluntary
contributions.
With respect to corpus fund for apartment, it’s the responsibility of the developer to collect the
corpus fund in order to maintain the amenities and facilities. In other words, it’s a lump sum
amount collected (think of it as a pre-paid maintenance charge) from the home buyer for
maintenance purposes and is not included in the total sale amount of the property. Not the corpus
fund but the interest generated on the amount can be actually utilized by the developer for the
aforementioned maintenance expenses. However, once the housing society or the apartment
association is formed, the developer has to hand over the corpus fund to the managing committee.
For further permanent upkeep, residents pay a maintenance charge to the MC on a monthly,
quarterly or annual basis on a calculation method decided unanimousl

Kindly Explain the Procedure and Documents required for Registration of Co-operative Society?

Write Short Notes on :

a) Deemed Conveyance

b) Effect of non-registration of documents

Introduction
The Registration Act, 1908 deals with the enactments relating to the
registration of documents. Registration is the procedure through which all the
documents are recorded by a recognized officer along with other necessary
information to ensure it’s transparency and authenticity. Section 17(1) of the
Act provides for mandatory registration of certain documents which are as
follows :

a) gift deed of immovable property.

b) non-testamentary documents signifying any operation, declaration,
assignment, limitation and extinguishment of any right, title or interest in
immovable property worth rupees one hundred and above.

c) non-testamentary instruments granting receipt or payment of any

consideration on account of creation, limitation, assignment, declaration or
termination of such right, title or interest.

d) leases of such immovable property for a term exceeding one year or

reservation of yearly rent.

e) non-testamentary documents conveying or assigning any decree or award

of the court involving creation, declaration, assignment, limitation or
extinguishment of any right, title or interest in an immovable property worth
rupees one hundred and above.

f) The documents of contracts regarding transfer of any immovable property

for consideration for the purpose of section 53 A of The Transfer of Property
Act, 1882 that has been executed on or after the inception of Registration
and Other Related Laws Amendment Act, 2001.

However, it must be noted that The State Government has the right to
exclude any lease executed in any district or part of a district, the terms
granted by which do not exceed five years and annual rents which do not
exceed fifty rupees.

Optional registration of documents

Section 18 of this Act lists the following documents that may be registered
under this Act :-

a) Adoption Deed

b) Instruments which relate to share in Joint Stock company

c) Debenture issued by Joint Stock Company

d) Endorsement upon or Transfer of Debenture, which is issued by Joint

Stock Company.

e) Decree or order of the court involving creation, declaration, assignment

and extinguishment of any right, title or interest in an immovable property of
value less than one hundred rupees.
f) Document of Past transaction

g) Wills

h) Grant of immovable property by the Government.

i) Instrument of Collateral Security

j) Power of Attorney

k) Agreement to Sell

l) Agreement of Mortgage

m) Certificate of Sale

n) Counterpart of Lease

o) Promissory Note

p) Leases of immovable property not exceeding one year and leases

excluded under section 17.

Effects of non-registration of documents

Section 49 of this act states that :

1. No document required to be registered under section 17 of this Act

shall be valid for creation, operation, declaration, limitation and
assignment of any right, title or interest in any immovable property
unless it’s registered within the specified time period.
2. The document shall not confer any power to adopt.
3. The document cannot be received as an evidence of any transaction
affecting such property or conferring such power.

Explain the definition of Immovable Property with appropriate example?

Immovable property
Generally speaking, the word immovable property connotes anything that a
person owns which cannot be moved from one position to another. It can be
said that anything which is affixed to land under someone’s ownership falls
under the category of immovable property. The immovable properties are
entitled to be protected by legal statutes and are liable to taxation. Such an
immovable property has rights of ownership attached to it.

The General Clauses Act, 1897 defines immovable property under Section
3(26), stating that the term shall include land, things affixed to earth or
permanently fastened to anything affixed to earth, and any benefits arising
out of the land. On the other hand, Section 3 of the Transfer of Property Act,
1882, does not provide an exhaustive definition. It states that immovable
property is not to include standing timber, growing crops, or grass. None of
the above definitions is exhaustive. These definitions just denote what is to
be included or excluded from the purview of immovable property.

Thus, after clubbing the definitions provided under the two statutes,
immovable property can be defined as permanently affixed to the earth, like
land, trees and other substances that do not include standing timber,
growing crops, or grass. There are further qualifying nuances to the term
‘immovable property’, and they have been addressed suitably later.

Section 2(6) of the Registration Act, 1908 also provides for the definition of
the term immovable property. As per this Section, lands, buildings,
hereditary allowances, rights to ways, lights, ferries, fisheries, any profit that
arises out of the land, and any other thing that is attached to the earth, or
something permanently fastened to anything which is in turn attached to the
earth, provided it shall not include standing timber, growing crops, nor grass
falls under the category of immovable property.

Even the definition provided under the Registration Act, 1908, is not
exhaustive; however, it helps to a certain extent to understand the nature
and concept of immovable property. In the case Shree Arcee Steel P. Ltd. v.
Bharat Overseas Bank Ltd. (2005), the Karnataka High Court held that the
term ‘immovable’ in immovable property means permanent or fixed, which
cannot be moved and which is attached permanently to the immovable
property.

When can property be classified as immovable

property
To sum up, all the definitions provided under various Indian legislations, it
can be said that mainly three things constitute immovable property, namely,
land, benefits arising out of the land, and things attached to the earth. The
last classification can further be divided into three categories: things rooted
in the earth, things embedded in the earth, and things attached to what is
embedded in the earth. Among the things attached to the earth, standing
timber, growing crops and grass fall under the exceptional category. Let’s
have an overview of the abovementioned classifications of immovable
property.

Land
In common parlance, the term ‘land’ constitutes a proportion of the earth
which is not covered by water. It can be connoted as an area of ground with
regard to its ownership or use. The term is intended to include all the things
on the surface of the earth, feasibly the column of space above the earth,
and the ground below the surface of the earth. The word is comprehensive
enough to engulf even the things below the surface of the earth, say sub-
soil, mines, and minerals. It even covers the objects placed by the human
agency on or under the earth’s surface, provided it shall be done with the
intention of permanent annexation. The term also covers the things which
are said to be land covered by water, for instance, well, tubewell, rivers,
ponds, lakes, and streams, which are dug on the earth’s surface. These may
be natural or artificial, as the case may be.

Benefits to arise out of the land

The phrase ‘benefits to arise out of land’ is considered under the purview of
immovable property since it is an interest in land. Even the definition
provided in Section 2(6) of the Registration Act, 1908 expressly includes this
phrase under the category of immovable property. Some examples of
benefits arising out of land include rent received from the house, revenue
from agriculture, rent from shops and jagir, right to catch fish from pond or
river, and right to collect lac from trees. Also, the right to collect dues from
the market or fair situated on a plot of land, interest on the income from
immovable property, lease of land, etc. even the right to extract any
minerals, right to conduct an exhibition of a piece of land, right to
possession, establish a hoarding or advertisement of the part of the land,
right of the priest to recover dues from the funeral, management of Sarjan
land, interest of the mortgagee in the property that has been mortgaged,
etc. are all considered immovable property.

In the case of Ananda Behera And Another vs The State Of Orissa And
Another (1955), the Supreme Court of India held that a person’s right to
enter upon land and to take away fish from a pond is ‘A profits a prendre’,
which is the right to take something from somebody else’s land. Thus it falls
under the purview of immovable property through the category of benefits
arising out of the land.
Things attached to the earth
The above-stated expression is separately defined under Section 3 of the
Transfer of Property Act, 1882, to include three categories: things rooted in
the earth, things embedded in the earth, and things attached to what is
embedded in the earth.

Things rooted in the earth

By virtue of the definition provided under the General Clauses Act, the things
rooted in the earth are considered immovable property. Thus, trees and
shrubs are considered immovable property. Similar is the case with plants
and herbs. However, it is pertinent to mention that this expression does not
include standing timber, growing crops and grass in this category.

In the case of Suresh Chand v. Kundan (Dead) By Lrs. And Ors. (2000), the
Supreme Court of India held that standing timber is a part of the earth by
virtue of it being rooted in the earth. When any transfer of property of such a
land takes place with timber rooted in it, then the interest in the property is
bound to include that standing timber or any other thing attached to the
earth unless it expressly or impliedly provided otherwise. Thus, the thing
attached or rooted will go to the transferee due to a legal incident of the
property so transferred. Hence, the general rule says that trees, shrubs,
herbs, and plants are immovable properties.

However, when detached or cut from the earth, trees and shrubs can be sold
separately as movable property. This view was expressed by the Supreme
Court in the case of Mathura Das v. Jadubir (1905). Trees and shrubs though
considered immovable property, as soon as they get detached or are cut
down, become movable property since it loses the character of immovable
property.

Things embedded in the earth

Etymologically, the term ‘embedded’ connotes something that is firmly fixed
in a surrounding mass. Embedding denotes a thing whose foundation is laid
underneath the earth’s normal surface and which becomes a part of the
earth. Take, for instance, where stone blocks are placed on one another to
frame a wall. Though no mortar or cement is used, they will be considered
immovable property since it has become a part of the land. However, when
the same stone blocks are just stacked on top of each other in a builder’s
yard in the form of a wall, they will be treated as movable property.

There may be instances where the article is firmly fixed in the land; however,
if the same has not been done with the intention of it being a part of the
land, then the same will not fall under the purview of immovable property.
For example, an anchor stands firmly fixed to the ground to hold the ship,
but the anchor was never fixed to the ground with the intention of it being a
part of the land. Thus, it will not fall under the category of immovable
property. Similarly, a road roller, heavy stone, etc will not be considered
immovable property. In cases where the property is embedded only up to an
extent where its weight forces, it shall not fall under the category of the term
embedded.

Attached to what is so embedded

The things falling under this category are the ones through which permanent
beneficial enjoyment can be drawn from the immovable property to which
they are attached. A thing will only be said to be attached to the earth when
in some way or the other, its permanent beneficial enjoyment can be done.
Doors, windows, shutters, etc are a few examples that fall under this
category. These are said to fall under this because they are attached to the
house. These things have no existence or meaning of their own. What good
will a door do if there is no house? However, it is important to understand
that these things must be attached with the intention of permanent fixation
or attachment. However, fans, A.C., window blinds, sashes, etc. will not be
considered immovable property, even though they may be attached to the
house.

Thus the two most important things that need to be established while dealing
with the fact of whether a thing falls under this category or not are;

 Permanent attachment of the thing must be there; and

 It must be attached in order to experience the beneficial enjoyment
of the thing to which it is attached.

Exceptions
As discussed above, trees, shrubs, herbs and plants fall under the purview of
immovable property. However, in cases where such trees, shrubs, and herbs
constitute standing timber, crops and grass, they are movable property.

In the above case the term ‘standing timber’ includes trees whose woods will
be used to develop buildings, houses or any other infrastructure, to make
ships, bridges etc. The English Law includes oak, ash or elm trees under this
category. In India, trees like neem, babul, sheesham, teak, or bamboo are
considered standing timber. However, ordinarily, the trees that bear fruit
stand on a different footing. These do not fall under the category of standing
timber. For example, mahua, mango, jack fruit, jamun trees, etc. are not
considered standing timber. The reason is they were grown with the intention
of using their fruit and not for the intention of cutting them and using them
later on for construction or as wood. If their intention would have been
otherwise, it shall then be considered immovable property. Since standing
timber is not an immovable property, a document concerning it does not
require registration.

As stated above, crops also do not fall into the category of immovable
property. In this relation the term ‘crop’ means any plant grown for food
mainly; it includes all the fruit plants, fruit leaves, barks or roots, etc. It is to
be noted that these crops are movable.

The third exception is grass. It consists of all the short plants having long
harrow leaves. These are movable properties, whether they are cut or not.
The main use of grass is for fodder purposes.

Explain in brief the Challenge before Construction Industry?

Challenges Facing The Construction Industry In India

The top challenges facing the construction industry in India are discussed below:
An influx in Material Costs
The cost of raw materials is on the rise. The main reason being a shortage in the
supply of materials to the sector due to a disruptive supply chain. Besides, to
stabilize the economy, reforms are being introduced by Central as well as the
state governments. Additional cess on taxes is being introduced, spurring up the
cost of the raw materials. The result is high expenses leading to a high-value
evaluation of the real estate constructions. Consequently, buyers are less
attracted to invest in the construction sector. The mitigation path can be,
adopting automated and modern technologies to increase customer
satisfaction.

Safety Of The Employees

Safety and security are now a growing concern worldwide. Employees and the
construction sites need to be Covid free, preventing any spread of infections.
Adequate safety measures must be adopted within the building premises.
Deploying a huge number of employees or construction workers may lead to
unprecedented infection spreads; harming the progress of the projects and
unnecessary delays. On the flip side, a lesser number of employees impacts the
deadlines and timelines severely.

Reduced Investment In The Real Estate Sector

The impact of the pandemic has severely crippled the Indian economy. There
have been several job losses and a reduction in wages. Consumers of the real
estate sector are hesitant to invest in construction projects. The number of
buyers has reduced considerably. Besides the need for commercial buildings
has lessened due to the “work from home” policies enforced by the majority of
the companies and firms. With the situations in the future being bleak and
uncertain, there is no clarity on how long the recession will continue.

Environment Preservation
A mandatory aspect of any construction project is to ensure the preservation of
the surrounding environment. In India, it is tough to maintain soil erosion and
degradation. The reason being mainly floods, droughts, soil alkalinity, aridity,
and salinity. Besides air and water pollution levels are still not within controllable
limits in the country. Urbanization in major cities has decreased the soil quality,
impacting the environment. The builders and real estate owners are forced to
adopt innovative measures and invest more in reducing the negative effect on
the environment.

Provision Of Electricity
With more and more real estate firms coming up in India, the necessity for the
continuous provision of electricity is increasing at a rapid pace. Property owners
and builders sometimes struggle in obtaining clearance faster from the
authorities. They are forced many a time to create captive power units within the
apartment complexes. Such provisions may turn out to be expensive and
involvement of skilled laborers. Besides, it increases the completion time of the
projects.

Effect Of Natural Disasters

Natural disasters and hazards are unpredictable and uncertain in the climatic
conditions of India. Hence site selection is an important factor in construction
projects. Even if sites are in close proximity of raw materials the fact that they
are located on a flood prone or earthquake prone areas, reduces the chances of
being shortlisted for construction. Moreover, buildings need to be planned,
designed, and constructed in such a manner enabling tolerance of natural
disasters. Cumulatively this increases the expenses and costs of the
constructions.

Skilled Manpower
The availability of skilled manpower at different stages of construction is
sometimes a concern. Especially during pandemic situations, the crisis rises
leading to delay in the proposed deadline of the projects. Besides lack of training
provided to the construction workers further hampers the timeline and quality
of the constructions. Focused attention is needed to speed up the skills and
knowledge level of the workers.

Need Of Multiple Clearances

The completion of any construction demands multiple clearances from various
designated authorities. Electricity, pollution control, environment preservation,
land, services, and utilization, etc. are the various areas where clearances are
mandatory. Even if the builders complete the construction work within the
planned timeframe yet delay in obtaining the clearances may need to delay in
handing over the projects to the buyers.

Conclusion
The above challenges have been impacting the progress of the construction
industry in India. The need of the hour is to mitigate the challenges by
introducing modernization and scaling up the labor force.

Discuss the formalities involved in devolution of Immovable Property during Life time of person?

According to the Indian Succession Act 1925, a Will is a legal

declaration of the intention of the testator, with respect to his
property, which he desires to be carried into effect after his death.
After the death of a person, his property devolves in two ways - by
way of his Will, ie, testamentary, and according to the respective
laws of succession, when no Will is made, ie, intestate.

In case an individual dies intestate, the laws of succession come

into play. The law of succession defines the rules of devolution of
property in case a person dies without making a Will. These rules
provide for a category of persons and percentage of property that
will devolve on each of such persons. A Will is a legal declaration.
Certain formalities must be complied with in order to make it a valid
Will.

It must be signed and attested, as required by the law. A Will is

intended to dispose off property. There must be some property
which is being given to others after the death of the testator. A Will
becomes enforceable only after the death of the testator. It gives
absolutely no rights to the legatee (the person who inherits) until the
death of the testator. It has no effect during the lifetime of the
testator.

The testator can change his Will at any time prior to his death, in
any manner he deems fit. Every person of sound mind, as long he
is not a minor, can make a Will. If a person is of unsound mind at
the time of making a Will, it is not enforceable. A Will obtained by
force, coercion or under undue influence, is a void Will as it takes
away the free agency of the person. A Will made under the
influence of intoxication or in such a state of body or mind, sufficient
to take away free agency of the testator, is void.

A Will can be made at any time in the life of a person. There are no
restrictions on how many times a Will can be changed by a testator.
However, only the last Will made before his death is enforceable. A
Will has to be executed by the testator by signing or affixing his
fingerprints on it. It should be attested by two or more witnesses,
each of whom should have seen the testator signing the Will. A
Hindu individual, by way of his Will, can bequeath all his property
which is self-earned.

However, he cannot do so when it comes to his share in a Hindu

Undivided Family property, of which he is a co-parcener. This
interest will devolve by way of survivorship and not otherwise. If the
deceased leaves behind a female relative, specified in Clause I of
the Schedule to the Hindu Succession Act 1956, i.e., widow,
daughter, mother or certain other relatives, the interests of the
deceased in the HUF will devolve by testamentary or intestate
succession, as the case may be, under this Act and not by
survivorship.
The interests of that individual will be deemed to be a share of the
property that would have been allotted to him if a partition had taken
place immediately before his death. If a testator intends to make
few changes in the Will, without changing the whole Will, he can do
so by making a codicil to the Will. The codicil can be executed in a
similar way as the Will. One must note that a Will or a codicil is not
unalterable or irrevocable. They can be altered or revoked at any
time.

Though the registration of a Will is not compulsory, it can be

registered with the sub-registrar. If, at any time, the testator wishes
to withdraw the Will, he can do so. A Will also can be sealed and
kept in safe custody. On the death of the testator, an executor of
the Will or a heir of the deceased testator can apply for probate.
The court will ask the other heirs of the deceased if they have any
objections to the Will. If there are no objections, the court will grant
probate. A probate is a copy of a Will, certified by the court, and is a
conclusive evidence of the genuineness of the Will.

Write in brief the procedure to register a project under Real Estate (Regulation and Development)
Act, 2016?

Application for registration of real estate

projects (Section 4)
Every promoter must submit an application to the Authority for registration
of the real estate project in the form, manner, and time stipulated by the
regulation of the Authority along with the fee specified by the Authority.

Step 1: An application has to be filed along with the fee and other
documents in the prescribed form for registration with RERA by the
applicants.

Step 2: The approval or rejection of the application for registration shall be

done within thirty days from the date of receiving the application by the
Authority.

Step 3: The promoter of the project shall be provided with a registration

number, user ID for login and password for the applicant on successful
registration.
Granting of registration by the
authority (Section 5)
1. The authority, shall within thirty days from the date of receipt of the
application –
2. Grant registration of the real estate project subject to the provisions
of the Act and issue the applicant a registration number, as well as
a Login Id and password, to enable him to access the website of the
Authority and create his web page to fill in the details of the
proposed project; or
3. Reject the registration by rejecting the application if it does not
conform to the provisions of the Act and record reasons in writing.
Provided applications cannot be rejected without giving an opportunity of
being heard to the applicant.

4. As per sub-section (1), if the authority does not register the project
within thirty days, then the project is deemed to be registered and
the promoter shall be given the user ID for login and password for
accessing the RERA website and to create his website for uploading
the details of the proposed project.
5. The registration so granted under this section is valid for the time
specified by the promoter in section 4 under sub-clause (c) for the
completion of the project.

Extension of registration (Section 6)

1. There has been a major delay in handing over the project to the
buyers by the developers. The Act was promulgated to avoid such
delays. Hence, the developer, at the time of registration should
specify a timeline during which the project will be handed over to
the buyer.
2. The specification of the timeline is very important because if the
project is not handed over within the said time, it may be usurped
by the regulator and be revoked.
3. Under this Section, the discretion solely lies with the regulator to
grant an extension of registration.
4. The regulatory authority may take into account the force
majeure conditions or any reasonable circumstance to merit the
extension.
5. The promoter shall make an application detailing the force
majeure or the reasonable circumstances which resulted in the
 delay in such form and by paying the prescribed fee as the
regulatory Authority may specify from time to time.

Revocation of registration (Section 7)

The Authority may revoke the registration granted under Section 5 after
being satisfied that –

 the promoter fails to do anything required by or under this Act or

the rules or regulations made thereunder,
 the promoter violates any of the terms or conditions of the
competent authority’s approval,
 the promoter is involved in any unfair practices or irregularities.
The authority, upon the revocation of the registration –

Debar the promoter and his access to the website with regard to the project
he undertook and put his name under the list of defaulters and display his
photograph on the website. He shall also inform the other Real Estate
Authorities in other States and Union Territories about the revocation so
made.

Lapse on the revocation of

registration (Section 8)
When a registration expires or is revoked under this Act, the Authority may
consult with the appropriate government to take whatever action it deems
appropriate, including completing the remaining development works by a
competent authority or an association of allottees, as determined by the
Authority. As per the provisions of the Act, the orders, decisions or directions
given by the Authority shall not take effect until the period of appeal expires.
Where the project is revoked under this Act, the association of allottees will
have a preferential right of refusal for proceeding with the remaining
development works.

Registration of real estate agents (Section 9)

Real estate broking is one of the easiest businesses in India as there are no
specific qualifications or experience requirements. Before the onset of RERA,
there was no code of practice that set accountability, transparency and
professional benchmarks. As we see, in many parts of the country, many
non-professional agents or brokers operate without a sense of
accountability. Thus, the RERA Act also covers agents who have to
mandatorily register under Section 9, without which a real estate agent or
broker cannot facilitate the sale or purchase of any building, plot, or
apartment as part of a registered real estate project sold by the promoter in
any of the planning areas. Every real estate agent willing to act as one shall
apply to the Authority within a prescribed time and in such form and such fee
as to be prescribed. The Authority, once satisfied that the provisions of the
Act in relation to the agent’s registration shall –

1. provide the real estate agent with a single registration number,

2. reject the application in case it does not conform with the
provisions of the Act or the rules thereunder with reasons recorded
in writing.
Provided that no application shall be denied until the applicant has been
allowed to be heard on the issue. The applicant shall be given a reasonable
opportunity of being heard in the matter, without which the application
cannot be rejected.

Write in brief the procedure followed to mutate changes in Revenue Record under Maharashtra Land
Revenue Code?

Explain Power of Attorney and its kinds?

What is Power of Attorney?

Power of Attorney, or POA, is a legal document giving an attorney-in-charge or
legal agent the authority to act on behalf of the principal. The attorney in charge
possesses broad or limited authority to act on behalf of the principal. The agent
can make decisions regarding medical care, financial matters, or property on
behalf of the principal.

Types of Powers of Attorney

1. General Power of Attorney

The general power of attorney is a broad mandate that gives an agent a lot of
power to handle the affairs of a principal. The agent or the person designated to
act on behalf of the principal is charged with handling several tasks. The tasks
include buying or disposing of real estate or even entering into contractual
relationships on the principal’s behalf.

2. Limited or Special Power of Attorney

An individual looking to limit how much the agent can do should choose limited
or special power of attorney. Before signing to notarize a limited power of
attorney, a person needs to be as detailed as possible about how much the
agent should handle. If an individual is not clear what should fall under the
special power of attorney, it is best to speak to a legal counsel.

3. Durable Power of Attorney

The durable type of power of attorney is only effective during the period a
person wished to get someone else act on his or her behalf. A non-durable POA
will end the moment it is revoked or when the expiration date specified arrives.
However, what will happen in the event the agent becomes debilitated? Will the
POA still be applicable?

In such a case, the principal would prefer that the POA remains active even if he
or she becomes unable to communicate. For example, if the principal becomes
comatose, but would prefer that the spouse be the agent, it can be specified in
the form of a durable power of attorney. The POA gives power to the spouse to
make decisions even when the principal is comatose.

4. Medical or Healthcare Power of Attorney

If the principal becomes very ill, he or she reserves the right to decide the quality
of care preferred. Medical or health care POA authorizes the agent to make
decisions on behalf of the principal in case of a life-threatening illness. Most
health POAs fall under the durable kind because they take into consideration the
fact that the principal may be too sick to make their own decisions.

In all the instances above, the principal should speak to a counsel before
choosing an agent. In addition, it is best for the principal to get the counsel to
walk him or her through every step of notarizing a power of attorney in order to
understand what should go into the document

How Power of Attorney Works

The principal can either download or buy POA templates. In the event the
template is acquired through either one of the two methods, the principal
should ensure they belong to the state of residence. POA documents are very
important, and the principal should not assume that the documents acquired
are of the correct kind. Verification of the POA documents is necessary before
the POA process can begin.

The best way for a principal to start the process is by finding a family law counsel
in their state of residence. If the associated legal fees are way beyond what the
principal can manage, there is the option of visiting a legal services office.
Alternatively, the principal can go to the Legal Services Corporation website and
communicate with a legal aide. Principals who are eligible will be attended for
free.

In many states, it is mandatory to get the principal’s signature notarized. In some

cases, the witness’s signature must also be notarized. In addition, there are
some legal provisos that are not generally applicable. For example, there is no
standardized POA principal form.

Procedures and laws vary based on the principal’s residence. While the durable
POA is widely accepted, there are powers the principal cannot delegate, such as
amending or making a will, contracting a marriage, or casting a vote.

Explain in brief the provision of Maharashtra Apartment Ownership Act, 1970?

Important Sections Of Maharashtra Apartment

Ownership Act, 1970
In order to understand the gist of the said Act, there are some sections
which are pivotal and are the key aspect of the said Act:

Section 4 – Status Of Apartments

As per section 4, every apartment along with its undivided interest in the
common area and facilities belonging to such apartment shall constitute for
every person a heritable and transferable property.

Section 5 – Ownership Of Apartments

This section states that the sole owner or owners of the apartment shall be
entitled to exclusive ownership and possession of their respective apartment
along with a Declaration which shall be executed and registered in
accordance with Section 2 of the Act.

The sole owner or owners of the apartment shall be entitled to execute Deed
of Apartment in the manner prescribed.

Section 6 – Common Areas & Facilities

This section stipulates that the common areas and facilities of the respective
building in which shall be entitled to the sole owner or owners of the
apartment and restricts the owner from carrying out a partition or division of
common area except when the property has been removed from the
provisions of this Act.

The apartment owner shall be entitled to an undivided interest in the

common area and facilities as per the percentage stated in the Declaration.
The percentage shall be calculated by taking into account the value of the
apartment in relation to the value of the property.

Section 6a- Redevelopment Of Apartments

One of the vital aspects of this act is Section 6A as it talks about
Redevelopment of Apartments. As per Section 6A of the act, and work with
respect to the development of a particular building can be carried out with
the consent of majority apartment owners residing in the said building.

However, it is pertinent to note that a building which has completed 30 years

from the date of issuance of Completion Certificate by the respective
Planning Authority or from the date of issuance of permission to occupy the
building, whichever is early or if the concerned Planning Authority renders
the building dangerous, unfit to reside or is likely to fall, then the
Redevelopment of the Building altogether shall commence.

Section 11- Contents Of Declaration

This section gives details of the information which are required to be stated
in the Declaration. Details such as the description of the land on which
building and improvements are or are to be located, Apartment number of
each apartment along with a statement of location, number of rooms and
immediate common area to which the apartment shall have access to,
Description of common area and facilities, Statement of Purpose for which
building and apartment shall be used along with restrictions.
As per Section 11(2) of the act, a true copy of the Declaration along with
bye-laws and all or any amendments carried out with respect to Declaration
and bye-laws shall be filed with Registrar of Co-operative society if the
building vests in the Co-operative Society and Housing Commissioner, if the
building vests with Maharashtra Housing Board.

Section 12- Contents Of Deeds Of Apartment

With respect to section 12, Contents of Deeds of Apartment shall include the
description of the land as mentioned in Section 11 above, post office address
where the property is situated, date of declaration, apartment number as
mentioned in the Declaration and other date which would be required for its
identification, percentage of undivided interest appertaining to the apartment
in the common areas and facilities and a true copy of the said Deed of
Apartment which is required to be filed with the Competent Authority.

Section 13 – Declarations, Deeds Of Apartments &

Copies Of Floor Plan To Be Registered
Section 13 object is to get the declarations, deed of apartments and the
copies of the floor plan to be registered under the Registration Act, 1908 with
the local authority.

Section 13(2) states that the along with the registered declaration, a set of
the floor plan of the building which shall include the layout, location,
dimensions of the apartment and a verified statement of an architect
certifying that it is an accurate copy of plans of the building which is filed and
sanctioned by the local authority.

However, it is pertinent to note that if the plans do not include a verified

statement by the architect, then there shall be an amendment to the
Declaration which shall be recorded prior to the first conveyance and shall
attach a verified statement of an architect stating that plans filed along with
the amendment, are fully and accurately, depict the layout plan and
dimensions of the apartment as built.

Section 13(4) states that it shall be the duty of every Manager or Board of
Managers to send to the Sub- Registrar of the sub-district and in case there’s
no Sub- Registrar, then to the Registrar of the district, certified true copy of
the Declaration and Deed of Apartment with respect to each and every
apartment of the building which form a part of the property along with
memorandum which contains particulars prescribed by the State
Government.
Section 14 – Removal From Provisions Of Act
Section 14, in a clear and simple manner, states that a property may be
removed from the provisions of the act if the majority of apartment owners
execute an instrument to that effect. Once the property is removed or no
longer a part of the provisions of the act, the ownership of the property shall
devolve in common by every apartment owner.

Section 18- Separate Assessment

Every apartment along with its percentage of the undivided interest in the
common areas and facilities appurtenant to such apartment shall be deemed
to be a separate property for the purpose of assessment to tax on lands and
buildings levied under such law and shall be assessed to tax accordingly.

Section 22- Disposition Of Property, Destruction Or

Damage
As per Section 22 of the Act, within 60 days from the date of damage or
destruction to all or any part of the property, it is not determined by
Association of Apartment Owners by the majority to repair, construct or
rebuild then in that case the following event shall take place:

 Property shall be owned in common by apartment owners;

 Undivided interest in the property owned in common which relates
to each apartment shall be determined on the undivided interest of
the owner in the common areas and facilities;
 If there exist any encumbrances which affect or cause to affect the
apartment or any part of such apartment, then it shall be
transferred with the existing percentage of the undivided interest of
apartment owner in the property;
 The property shall be subjected for the partition of a suit of any
apartment owner, in event the net proceeds of sale along with
proceeds of insurance on the property, if there exists any, shall be
considered as one fund and it shall be divided amongst each and
every apartment owner as per their percentage which shall be equal
to undivided interest owned by each owner after first paying out the
respective shares of the apartment owners and charges on the
undivided interest in the property owned by each owner.
Meaning Of The Act For The People
Associated To This Act
The Act allows comprehensive ownership of the apartment to the owner
along with the authority to form an association with other apartment owners
which frame the bye-laws for the building on which apartments are situated.

All the apartment owners are legally protected as disputes which arise due to
conflict in the said formed association of apartment owners, such disputes
shall be governed under the civil jurisdiction of the l

Explain the obligations of promoters under Maharashtra Ownership of Flat Act, 1963?

Maharashtra ownership flats (Regulation of the promotion of construction,

sale, management and transfer) act, 1963
Everyone dreams of their house. Real Estate Sector is one of the growing
sectors, and it is very dynamic. But this sector is highly plagued. The cases
like Adarsh Scam, Campa-Cola scam, bring to light the irregularities in this
sector. The builders often defraud the buyers, and there are sundry abuses,
malpractices, and there are troubles relating to promotion, sale,
management and transfer of the flats. The Courts are flooded with these
litigations and the people who dream of buying their house; their dream
remains a dream.

Rationale behind enacting this Act

After the independence, there was a need to develop India as a country. In
those days people were not aware of anything. Law and order were
necessary to maintain peace in the society. The country was developing as a
whole. But sadly the Real Estate Sector was plagued at that time as well. The
State Government of Maharashtra was made aware of the malpractices
within this sector and due to which there was an acute shortage of housing
within the State of Maharashtra. The State Government appointed a
Committee in 1960 to advice itself in a manner that should be adopted to
deal with these matters and the Committee submitted its report in June
1961. The report was published for general information. The Act is enacted
to implement the suggestions by the Committee and to deal with the
defaulters in a strict manner.

Applicability of the Act

This Act applies to whole the of Maharashtra, and the other provisions of this
Act shall come into force in[1][such] areas, and on dates as the State
Government may, by Notification in the Official Gazette, appoint, and
different dates may be appointed for different areas.

Important Definitions Under the Act

THE IMPORTANT TERMS DEFINED IN THE ACT ARE AS
FOLLOWS

FLAT
The MOFA defines the term to inculcate within itself:-

 A separate and self-contained premises;

 Which is used or intended to be used as a Residence, office,
showroom, shop, godown, carrying on of any industry or business
including a garage;
 And the premises forms part of a building.
The term flat also includes an apartment. The Explanation to the section
provides that even if a provision is made for sanitary, washing, bathing or
other convenience as common to two or more sets of premises, the premises
shall be deemed to be separate and self-contained.
All the criteria of this definition must be fulfilled to be able to apply the
provisions of MOFA, and it is a misconception that it applies only to
residential premises.

PROMOTER
The promoter includes as per this act:-

 A person,
 A Partnership Firm,
 A body or association of persons whether registered or not
And who constructs or causes to be constructed

 A block or buildings of flats or apartments

 For selling all or any of them to a Company, Co-operative Society,
Association of Persons
All the criteria of this definition must be fulfilled to construct a promoter, and
the term also includes his assigns and thus, if a person assigns his interests
in the land to another person then the assignee would become a promoter. If
the builder and the person selling the flats are different, then both of them
are promoters. It happens many times that the builder who builds the flats
gives the contract to an advertising agency to promote the flats than in this
case both of them are promoters.

JUDICIAL PRONOUNCEMENT ON MAHARASHTRA OWNERSHIP

FLATS (REGULATION OF THE PROMOTION OF CONSTRUCTION,
SALE, MANAGEMENT AND TRANSFER) ACT, 1963
The Bombay High Court in Ramniklal Kotak vs. Varsha Builders[2] held that
the Promoter must fall within the category of the promoter and a mere
builder or contractor cannot be a promoter.

 COMPETENT AUTHORITY
A Competent Authority means an Authority appointed under Sec 5A of this
act.

 CONVERSION ALSO INCLUDES CONSTRUCTION

The phrase “to construct a block or building of flats or apartments” includes
converting a building or part thereof into flats or apartments.

General liabilities of the Promoter

SECTION 3 DEALS WITH THE GENERAL LIABILITIES OF THE
PROMOTERS UNDER THIS ACT.

 Clause (1) states that a Promoter can be asked to produce the

documents of the transaction to the person buying the flats in any
state if he has constructed or intends to construct blocks or building
of flats and he gives them on ownership basis.
 Clause (2) obligates the Promoter, who constructs or intends to
construct a block or building of flats to make the following
disclosures:-
 To make full and true disclosure of the nature of his title to the land
on which flats are constructed or are to be constructed, and such
title must be duly certified by the Advocate having at least three
years of Practice [3]and having been duly entered in the Property
card or extract of Village Forms VI or VII and XII or any other
relevant revenue record;
 To make full and true disclosure of all encumbrances on such land,
including any right, title, interest or claim of any party in or over
such land;
 He should give inspection if asked by a seven-day prior notice or
demand of the plans and specifications of the building built or to be
built on the land and such plans and specifications have been
approved by the local authority which he is required to do so by any
law for the time being in force;
 disclose the nature of fixtures, fittings and amenities (including the
provision for one or more lifts) provided or to be provided;
 The promoter is obligated to disclose the design and material used
for the construction of the flat, and if he is not the builder, then he
should disclose all the agreements entered into with architects and
construction companies relating to design and constructions of the
flat as well as material used.
 specify in writing the date by which possession of the flat is to be
handed over (and he shall hand over such possession accordingly);
 He should also maintain a list of flats taken or are supposed to be
taken with parties name, address and the proposed amount that is
charged and also any terms and conditions of taking such flats;
 state in writing, the precise nature of the organization of persons to
be constituted and to which title is to be passed, and the terms and
conditions governing such organisation of persons, who have taken
or are to take the flats;
 The Promoter shall not hand over the possession until and unless he
has received completion certificate from the local authorities
  Make full and true disclosure of all the outgoings (such as rent,
taxes, charges for water and electricity, interest on encumbrances
such as mortgage, etc.)
 make a full and true disclosure of such other information and
documents in such manner as may be prescribed, and give on
demand true copies of such of the documents referred to in any of
the clauses of this sub-section as may be prescribed at a reasonable
charge therefor.
 He should have kept all the relevant documents at the site, and he
should permit their inspection by the prospective buyer.

Things to be Disclosed by the Promoter while

Advertising
Advertising is an important aspect of Real Estate. Whenever a new building is
constructed, and it has to be promoted so as to get prospective buyers
advertising plays an important role. Most of the time it happens that the
advertisements are misleading, so to increase transparency following
disclosures should be made on behalf of the promoter:-

1. Extent of carpet area of the flats as well as balcony and it should be

shown separately;
2. The prospective price including the price that has to be paid of the
common areas and facilities and the intervals of instalments which
are to be paid;
3. the nature, extent and description of the common area and
facilities; and
4. the nature, extent and description of limited common areas and
facilities, if any;
The promoter shall sell the flats by their carpet area only although he can
charge separately for common areas and facilities.

The explanation to this section includes balcony of the flat in carpet area.

Registration of the Sale Agreement

The registration of the sale agreement is compulsory under the Registration
Act, 1908 and then only the promoter can accept the advance money as a
deposit, but such money shall not be more than 20% of the sale price.

Responsibilities of the Promoter

There exists a fiduciary relationship between the promoter and the buyer and
the Promoter in all circumstances must value such relationship. The promoter
is responsible and accountable to his prospective buyers. For ex: – If a
promoter thinks to cater his selfish needs and hence defrauds the buyer he
can do it just once. A person cannot be fooled twice. His reputation will be at
stake in the market, and he will most probably not get any buyers for his
future projects. So, the promoter should be transparent, and he should value
the trust of his buyers. The responsibilities of promoters enlisted under this
Act are:-

 As per Section 5 of this act, the Promoter should maintain a

separate account of sums taken as advance or deposit and to be
trustee therefore and disburse them for purposes given. Such
account can be maintained in any bank, and the transactions of such
account are open to scrutiny by an officer appointed by general or
special order by the State Government who demands that in writing.
 As per Section 6 of this act a promoter shall, while he is in
possession and where he collects from persons who have over flats
or are to take over flats sums for the payment of outgoings even
thereafter, pay all outgoings (including ground rent, municipal or
other local taxes, on income taxes, water charges, electricity
charges, revenue assessment, interest on any mortgage other
encumbrances, if any), until he transfers property to the persons
taking over the flats, or to the organization of any such persons. If
the promoter fails to pay such outgoings, he is liable to pay it even
after the transfer of property, and he can also be made liable for
legal action by such persons or organisation.
 As per Section 7 of this act, the promoter cannot make any
additions or alterations to the disclosed specifications and plans
without the consent of prospective buyers, and if he comes to know
within three years of any unauthorised change, then he should take
care of it without charging anything extra from the prospective
buyers.
 As per section 8 of this Act if the promoter fails to give the
possession on the specified date or on any date agreed by the
parties and for any reason he is unable to give possession even
after providing extension of time, he shall be liable to refund the
amount with simple interest@ of 9% from the date he received such
sums to the date on which he finally returns those amounts.
 As per Section 9 of this Act No mortgage etc., can be created
without the consent of parties after execution of an agreement for
sale.
 As per Section 10, the promoter shall help in the formation of Co-
operative Societies and Companies.
 As per Section 11 of this Act the promoter shall convey title, etc.,
and execute documents, according to the agreement for sale and if
 he fails to do that, then such persons or Organization can approach
the Competent Authority in writing and can take action against such
promoter.

Offences
 If a Promoter fails to comply with or contravenes Sections 3,4,5, 10
or 11 and if he is convicted is liable for imprisonment which may
extend to 3 years or with fine or with both.
 Any promoter who commits criminal breach of trust of any amount
advanced or deposited with him for the purposes mentioned in
section 5 shall, on conviction, be punished with imprisonment for a
term which may extend to five years, or with fine, or with both;
 Failure to comply with any other provisions or rules made under this
Act can attract an imprisonment up to six months or a fine of
10,000rs which may extend to 50000rs or both in the case of
conviction.

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