QUERIES (Session-2) - ONLINE INTERNSHIP PROGRAMME BY MUKHERJI LAW ASSOCIATES IN ASSOCIATION WITH DROIT PENALE GROUP

Each query was taken up by Abhijeet Mukherji, Managing Partner, and answered accordingly. To maintain the brevity the tense of neither the queries nor the answer is changed.

ASSIGNMENT

SESSION-2
(MAY- 21^st -22^nd 2020)

Q.1.  The important sections of RERA Act and Flat Act, in reference to the CPC and TPA act?

A. The important sections of the Real Estate (Regulation and Development) Act 2016

·        S.4

·        S.5.

·        S.18

·        S.31

·        S. 36

·        S.  39

·        S. 40

·        S. 58

Ø Where a property is transferred, the law shall assume that everything “appurtenant” to, attached to and arising out of such property is also transferred unless and express intent to the contrary is provided for in the sale-deed or ought to be necessarily implied.

So for this the relevant provisions of TRANSFER OF PROPERTY ACT 1882 are:

·        S.3

·        S.6

·        S.40

·        S.106

·        S.108

Ø Moving on to Code of Civil Procedure 1908, the relevant sections are:

·        S. 2 (12)

·        S. 96

·        S. 100

·        O. 6

·        O. 7

·        0.8

·        O. XX RULE 12

·        O.XXXIX RULE 1

  Q.2. Please provide me the name of Act of which the speaker was talking about.

A.  The name of the Act has been stated in the problem itself :

Real Estate (Regulation and Development ) Act 2016

Q.3.

a. What is the difference between the question of law and substantive questions of law? Is there any provisions are given in any law or acts or codes?

b. What is the difference between Flats And apartments

3.a) This is a very good question, you see the S. 100 of the CPC states that the second appeal has to be admitted only if it involves a “substantial question of law”. However, the  difference between question of law and substantial question of law has been laid down by the Hon’ble Supreme Court in various cases In Gurdev Kaur vs. Kaki (2007)1 SCC546  The Hon'ble Supreme Court held as thus:

“…the word “substantial” as qualifying “question of law”, means- of having substance, essential, real, of sound worth, important or considerable. It is understood as something in contradiction with –technical, of no substance or consequence or academic merely...”

·     I must clarify that there is no separate statute stating the aforesaid difference.

3.b) To understand the difference between flat” and “apartments” we must first delve into the definitions of the same in the respective statutes:

 A Flat is defined in the flat Act under section 3(a) as-

“…. a part of a property having a direct exit to a road, street or highway or to a common area leading to such road, street or highway which  together with its undivided interest in the common areas and facilities forms an independent residential unit. ”

Whereas, an apartment is defined in the Apartment Act in section 3(b) as:-

“a part of any property, intended for any type of independent use, including enclosed spaces located on one or more floors or any part or parts thereof, in a building to be used for residential or official purposes or for the purpose of practicing any profession, or for carrying on any occupation, trade or business (excluding shopping malls, multiplexes and commercial complexes which are maintained agency) or for such other use as may be prescribed, and with a direct exit to a public street, road or to a common area leading to such street, road and includes any parking space or room (whether or not adjacent to the building in which such apartment is located) provided by the promoter for use by the owner of a such apartment for parking or, as the case may be, for the residence of any domestic aide employed in such an apartment.”

So, you can clearly see by the definition itself that the scope of the apartment is very wide while that of flat is very narrow. A flat is a term that can be used only for a residential purpose but for apartments it includes a lot of other things. The same is the practice in the USA and UK and other countries regarding apartments.

                                          

Q.4. Please mention the case judgments that need to be done.

 A.  The judgments were only for a better understanding of the subject-

·        M/s Designarch Infrastructure Pvt. Ltd and Anr. Vs. Vice-Chairman GDA and Ors.

 2013 (9) ADJ 594 (DB), PARA 65

·        Nahalchand Laloochand Pvt. Ltd. Panchali Corporate Housing Society Ltd. (2010) 9 SCC 536

·         Bikram Chatterji and Ors. Vs. Union of India MANU/SC/0947/2019

·        Neelkamal Realtors Suburban Pvt. Ltd. and anr. Vs. Union of India

 WRIT PETITION NO. 2737 OF 2017 BOM. HC.

    Q.5. Kindly clarify with all the Acts and Sections discussed in the session.

A.  I have already told you the ACTS and sections, in answer to query no. 1 kindly refer to the same.

      Q. 6.  Why can't builders sell common areas? What is the MCLR+1 formula?

      A. This the question has been asked in two parts which are not connected but these are important concepts:

·        Builders cannot sell common areas only without the consent of the home buyers. Common areas and facilities are there for the enjoyment and use of the home buyers…

 for example, I stay in an Apartment and enjoy sunlight in my balcony and there is a clubhouse outside which of course is a common area. Now tomorrow the builder gets a new map sanctioned and gets a new tower in place of that clubhouse. Then not only the sunlight I used to get is gone but also there is a compromise with the floor area ratio (FAR) which was there in the initial sanctioned map. Thus, the repercussions of changing the common area lead to series litigations unless done in the course of Law.

·        MCLR+1 - The developer has to pay the interest on the amount paid by the home buyer under section 18 of the RERA Act 2016. The interest has to be paid from the date of possession mentioned in the builder buyer agreement till the actual possession at the prescribed rate which is the rate of the marginal cost of lending rate (MCLR) plus 1 percent per annum as prescribed under the provisions of Section 18 of the act. Of course this will be adjusted with the EMI taken by the buyer from the Bank.

 Q.7. a.what is the criteria to classify a small or big unit of flats as mentioned in RERA?

     b. What are the steps to settle the dispute as mentioned in section 27 of UP apartment act 2010?

 A.  a) The criteria to classify big or small units in RERA is provided in section 3 (2) it reads as below:

“2) Notwithstanding anything contained in sub-section (1), no registration of the real estate project shall be required—

(a) where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases:

Provided that, if the appropriate Government considers it necessary, it may reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under this Act;”

·        Here Eight apartments maybe considered as eight units.

7 b) - section 27 of the UP Apartment Act, as interpreted by the Designarch Judgment (supra), only contemplates :

·                 That the residents must represent their grievance to their own elected Apartment’s owners association

·                 In turn, the Association shall have a duty to take the grievance to the competent authority under the Act, which is the development Authority.

·                 Now, once this grievance is represented, the Authority calls upon the promoter/builder on a fixed date for a hearing and so there is mediation between the parties…

·                 If no order is passed or adverse order is passed or an order is not implemented by Competent Authority then the same can be challenged in the writ court under Article 226.

Q.8.  What was the code that was told about regarding home buyers? Reference to section 7 of that code was also made.

A. I had stated about section 7 of the Insolvency Bankruptcy Code 2016, After the 2018 amendment the home buyers are treated as financial creditors in this and this also an efficient tool for them to get back at least a good and timely compensation.

    Q.9. How to draw an affidavit regarding it?

      A. How to draft a writ petition and its affidavit you will get in your relevant high court rules of your own State. Which state how to draft it. However, if you just Google you can find some good drafts. I have consciously not provided any draft limit your thinking…I’m sure you all must have done moot courts or must be knowing students who attend them….Lastly, I can only say don’t be afraid of drafting something incorrect….it is very important to attempt and learn from mistakes rather than run from the challenges thrown at you.

ALL THE BEST!