SCRUTINY LEADS THE WAY TO DREAM HOUSE

Advocate at south Bangalore | Leading advocate in Bangalore | property lawyers

It is the desire of every person to own a shelter. At the end of long years of employment some manage to gather the required amount to buy the property while for the more fortunate it is at their desire. However, buying a property is always a huge investment and the more careful one is with the process of selection, the lesser are the chances of future disappointments. Careful selection, however difficult though the process may be, keeping in mind the factors such as  location, the right vendor, etc., can go a long way in ensuring value appreciation and peaceful enjoyment of property.

The Bangalore metropolitan area comprises of 1279 sq. kms.  There are various statutory authorities, which operate in this area, for according approvals to the layouts, constructions etc.

The Bangalore Development planning  and developing agency in this area. Any layout in the metropolitan area of Bangalore must be approved by the BDA. This is mandatory as per the Karnataka Town and Country Planning Act, 1961, and BDA Act 1976.  So it is essential to make sure that the site you purchase is in a BDA approved layout or has been approved by any other competent authority.

There are many agricultural lands in the metropolitan area, and abutting it.

The Karnataka Land Reforms Acts does not allow purchase of agricultural lands by the non-agriculturists; unless it is converted to non-agricultural purpose. Even house building co-operative societies are covered under this restriction.

Revenue Site

Another dangerous area is a “revenue site. Revenue sites are formed on agriculturallands, which are not converted.

Using such sites for residential purpose is against the law. These sites are not entitled to power, water supply and sewerage connections. Most landowners use Form No.9 & 10 to confuse and convince the purchasers and these are all generally fabricated documents, which are not issued by any statutory authority and hence not genuine. 

Government acquired land

The government is vested with powers to acquire lands for the purpose of development. Firstly, the Land Acquisition Officer announces a paramilitary notification for acquisition of land and calls for objections from the public or the affected party.  The affected party has to file objections within 30 days, stating the developments done on that property, after obtaining all permissions from the statutory authority concerned and also taking into account the real value of the property. After hearing the case of the affected party, the government may delete the said survey number from the notification and announce the final notification. After the final notification, the government may pass an award, after which, such of the properties finding mention in the final notification is considered as acquired property. Once notified lands are prohibited from alienating such  lands. But many owners sell such notified/acquired lands to gullible purchasers by using Form Nos.9 and 10. One should be very careful as to whether the property was acquired or not and has to check with the acquisition authorities in this regard.

Comprehensive development plan

The comprehensive development plan (CDP) is in operation in the Bangalore metropolitan area. This plan has divided the metropolitan area into different zones. Each zone is earmarked for a particular activity which are, residential:  commercial:  industrial  which  includes  light  and  service industries, medium industries and heavy industries and heavy industries: public and semi-public; Utilities and Services; Parks and open spaces, play grounds including public recreational area, transport and communication, agricultural land and water sheet (Water body).

Activity other than that stipulated, in such zones is not permitted. One must always ensure that, the site purchased is used in conformity with the zonal regulations, for example houses for residential purpose should be constructed only in the residential zone, with regard to this, the zonal regulation map is available at the BDA office, and it is essential to verify the Zonal Regulation Map before purchase of property.

Further, Village Panchayats are also entitled to issue the Khata but only in respect of the village Panchayat area and a further 200 meters from the limit of Gramathana area, which is marked as village area in the survey map issued by the Survey Department.

Legal formalities like tracing the title of the property, verifying the sanction plan, electricity, water, sanitary facilities and relevant sanctions, checking up the plinth area, carpet area and the super built up area are all important aspects to be verified with the help of a qualified professional. However, before checking legal formalities, approvals and permissions it is essential that a careful selection of a location with regard to its surrounding areas, habitation, density of population, access of various facilities etc., be made to ensure that the property purchased can be lived in peacefully and that the potential for reasonable value appreciation of the property is good.

Selecting a location

Location is the most important aspect while investing in a property. It is advisable to ensure that there are no slum areas nearby, a place of worship attached to the property, drainage line close to the property. The purpose of buying a property often at times determines the location. It may be for self-occupation as a house or for investment purposes. In case of house/flat for own occupation, a residential locality not far away from the heart of the city is preferable. If any person offers property at a cheaper rate as against the prevailing market rate, then it is advisable not to accept the offer, as it may come with certain hidden problems, which are difficult to trace. Some people may try to convince you by saying that there is a lot of demand for the property and offer you very little time to make a decision on buying the property. One should not yield or be pressured by such tactics ensure proper verification and examine documents with extraordinary care before committing oneself. Always select approved layouts by appropriate authorities that enable and individual to get all the facilities within the layout. The area should have well developed roads; good drainage and the civic staff should do the garbage clearance regularly.  Low-lying areas should be avoided as they get inundated during monsoons.

The proximity and accessibility to work place, schools, market place, hospitals, railways, bus station and recreational centers is important. The locality should have adequate banking facility, frequency of public conveyance, other modes of   transport, availability of public telephone booths etc. A location  that is not far away from the modern facilities. And infrastructure and yet far enough to avoid the pollution of the city, is preferable.

Prefer an area inhabited by decent, educated and cultured people of cosmopolitan outlook. Ensure that the area is not home to anti-social elements. There should not be factories or workshop especially the ones which work in night-shifts, in the immediate neighborhood. This results in noise pollution and sleepless nights apart from affecting the quality of the power supply. Property attached or close to highways or heavy traffic areas are best avoided as they result in noise pollution.  Further, the area should have regular supply of water, power and good ground water table for bore well.

Facilities like public park/garden for walks are worth considering. The location of a temple, mosque or church and religious institutions that arrange regular discourses in this age of stress and strain, is a welcome factor. Apart from the above, the size of the plot to suit your budget and the permitted FAR (Floor Area Ratio) is important.

Vaastu Aspect

Vaastu is of individual preference, however people are increasingly seeking Vaastu incorporated property and it will be worthwhile, keeping in mind the value appreciation and future sale, to ensure that the property is as per the Vaastu guidelines.

If the purchase is for investment purpose, the chance of resale is the important factor. A developing area is preferable to a developed area. The investment in a developing area is comparatively low and value appreciation will be more.

Non-availability of parking space and traffic restrictions have an adverse effect on the value of the property. Accessibility to the railway/bus stations, airport, star hotels and availability of infrastructure facilities play an important role.

Selecting a vendor

While selecting a vendor/promoter, you need to look into his track record.  This can be done by visiting earlier projects done by the vendor or in case he is an individual, enquiries could be made with people who have had transactions with that individual or with the people having close to the property. Similarly, you have to select a reliable real estate dealer to locate a suitable property.

Before investing your money in flats or any property, choose a well known builder/developer/promoter: Do not get carried away by attractive colorful brochures.

Many builders have abandoned their projects in a semi-finished state exposing the purchaser to financial loss and mental agony. In vesting in a flat which is under construction by unknown new builders is risky.  Check the credentials of the builder before investing your hard earned money. Verify the track record of the builder for prompt delivery, construction standards, adhering to the agreed cost without escalation, providing amenities, before booking a flat. Ensure that there are no deviations from the development rules and also check the post sales service. It is preferable to opt for a ready-to-occupy flat, in doing so, the attendant risk of investing in a property to be developed can be avoided.

Do not be tempted by colorful advertisements and attractive offers, which mention that the said property is bank approved or BDA approved. Legal opinions from bank or from the promoter should not be relied upon. It is always advisable to obtain a proper legal opinion from a well-qualified lawyer before purchasing a property.  Further, claims of having obtained  BDA’s no objection certificate or approval from BDA or CMC should not be taken as true in the absence of personal verification by self or through a lawyer, from the concerned department.

The property scene is similar to the speculation industry; prices can either appreciate or depreciate, though the latter is rare. If  fact, it is the difference in the amount of gain in value and the time period taken to achieve such appreciation in value which is important. Slow and poor appreciation in value almost equal to depreciation while fast and large appreciation can give benefits like no other investment can and that too without any effort on the part of the investor. A thorough study of title, location, developments already in the area, the expected development in the area, other facilities already in place and surrounding places and a careful analysis of these factors before a purchase can ensure great benefits to the investor and greater peace and prosperity to the purchaser.

RULES REGARDING CONVERSION OF AGRICULTURAL LAND

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The city of Bangalore is growing and is identified as the fastest growing city in India, leading to agriculturallands in the outskirts of city being used for residential, commercial and industrial purposes. Many people are not aware that lands assessed or held for agricultural purpose cannot be straight away used for non-agricultural purpose it needs to be first converted for non-agricultural purpose and then conveyed.

Karnataka Land Revenue Act, 1966 has prescribed the procedure for converting agricultural lands to non-agricultural purpose, under sections 95, 96, 97, and 98, of the Act. This is a social legislation aimed more at protecting the agriculturists and farmers than encouraging non-agricultural activities in the agricultural lands.

Any owner of the land, which is assessed or held for agricultural purpose, who wants to divert such land and any part of such land for non-agricultural purpose shall apply for permission to the Special Deputy Commissioner who is the concerned authority in Bangalore Urban and Rural District.  The purpose of use of land must be specific and the Deputy Commissioner may grant permission-imposing conditions or may refuse to grant permission for such conversion.  However, he shall not refuse the permission in case of lands included in outline Development Plan or the Comprehensive Development Plan or the Comprehensive Development Plan published under Karnataka Town and Country Planning Act, 1961 (Karnataka Act 11 of 1963) provided such conversion is in accordance of land use specified in such plan. 

According to notification RD/7/LGP/95 dated 7/6/99, published in Karnataka Gazette extraordinary dated 8/6/99, the application for conversion has to be submitted in duplicate to the jurisdictional Tahsildar, who will forward the same to the sanctioning authority. Any additional information required has to be intimated to the applicant within one week of receipt of the application. The Tahsildar shall verify that only the owner has applied for permission and conversion of land does not defeat the provisions of Karnataka Land Reforms Act, Land Grant Rules, Prohibition of Transfer of Certain Lands Act, Rules pertaining to green belt and the land is not notified for acquisition. The burden of verification regarding complicity, violation of the above laws rests solely with the Tahsildar and the applicant shall not be asked to produce any document pertaining to the same.

The Tahsildar shall forward the application to the jurisdictional Deputy Commissioner within 15 days of receipt of the application along with a revenue sketch of the area proposed for conversion, the Deputy Commissioner in turn will inspect the lands to satisfy himself that the conversion does not cause any public nuisance or violate the existing provisions of any law.

If the conversion is permitted, then the applicant will be issued a notice to pay the requisite fine within fifteen days of the notice.

The Deputy Commissioner may refuse permission on grounds that the conversion would defeat the provisions of law in force or is likely to cause public nuisance or is not in the interest of the general public or that the owner is not able to or unwilling to comply with the conditions imposed.

The Deputy Commissioner may impose such conditions as may be necessary to secure health, safety and convenience and restrict the dimensions, arrangements and ensure that accessibility to building sites are adequate for the health and convenience of the occupants, and that it is suitable to the location and do not contravene the provisions of any law relating to the Town and Country Planning or erection of buildings.

Any applications for conversion of agriculturallands shall be made only by the owner, unless otherwise directed by Deputy Commissioner. The conversion of land attracts fine as per Rule No. 107 of Karnataka Land Revenue Rules, 1966.

The prior notice of conversion of agriculturalland shall be made in the prescribed form 21-A. The applicant shall also enclose the challan for having paid the fine computed in accordance with the prescribed rules to the concerned treasury. Such notice has to be given to the jurisdictional Tahsildar with an undertaking to pay the balance fine, if any, with the full description of land is to be diverted.

As per Rule 108 of Karnataka Land Revenue Rules 1966, no fine can be imposed an appropriation of agricultural lands made over or acquired under Land Acquisition Act at the instance of a government department, Municipal Council, Local Board, Village Panchayat, Charitable Education Institution for charitable or public purpose, from which the government or such statutory authorities do not derive any profit and the land is used for the purposes of construction of school building, laying of play grounds, hospitals, dispensaries or rest houses. Similarly, the fine cannot be imposed, lands acquired for extension of village or improvement of village sanitation at the instance of village Panchayat, for construction of houses by Karnataka Housing Board, for making market yards under Karnataka Agricultural Produce Marketing Regulation Act, 1966, Land proposed to be converted for poultry farming.

The State Government has powers to declare certain areas within the prescribed limits as green belt area to protect and improve the environment. In green belt areas only agricultural and related activities are permitted and conversion of agricultural land for any other purpose is not permitted.

The Deputy Commissioner has to inform the applicant of his decision within four months from the date of receipt of the application. If no decision is conveyed, it is deemed that permission for conversion of land has been granted. The conversion of land for non-agriculture is subject to payment of the fine imposed by the Deputy Commissioner. The conversion is only for a specific non-agricultural purpose for which it was permitted. The land has to be assessed for non-agricultural purpose.

PENALTY FOR CONVERSION OF AGRICULTURAL LAND WITHOUT PERMISSION

The Karnataka Land Revenue Act, 1966 has prescribed severe penalty in case of violation of the prescribed procedures and conversion of land to non-agricultural purpose without permission from concerned authority. In such cases, the Deputy Commissioner will serve a notice on the person responsible for such conversion directing him to use the land for original purpose, and to remove any constructions made on the land, to fill up any excavations, to take necessary steps to restore the land to its original conditions within certain time. He may also impose a fine of Rs. 1000/- and further penalty of Rupees 25/- for each day during which the contravention continues.

If the concerned person fails to comply with the orders, the Deputy Commissioner himself may take steps; he may summarily evict the person and forfeit any structure there on or remove them. Any expenses incurred in this regard are liable to be recovered in the same manner as arrears of land revenue. He may also compound such conversion of land on payment of prescribed amount. Such amount may be different for different areas and for different purposes. Any violations of conditions prescribed by the Deputy Commissioner for conversion of land also attract similar penalties. That is, if the conversion is permitted for residential purpose, using the said land for industrial purpose is violation and invites penal action.

The Deputy Commissioner has certain special powers to grant permission to divert land on certain terms and conditions as agreed between parties. However, such permission is subject to following conditions. The relevant section is 98; such permission is for temporary period.

(1)     The period of permission shall not exceed the period specified in the licence or one year whichever is less. Further such period shall not be extended.

(2)     The land shall be utilized only for which permission is granted.

(3)     The land should not alienated during period for which permission is granted.

(4)     Any other terms and conditions may be imposed in addition to above.

(5)     The land shall be used duly for the purpose for which licence is granted.

(6)     The special permission is liable to be cancelled in case of any violations of the terms imposed.

The Deputy Commissioner permits only conversion of land to non-agricultural purpose. It does not summarily permit to use the land for non-agricultural purpose, unless necessary permission by competent authorities like local bodies, BDA, BMRDA, Urban Development Authorities, Pollution Control Boards etc. are obtained. The Tahsildar should send the details of the conversion of land to non-agricultural purpose to village accountant and the details of conversion, order reference, extent of land converted have to be reflected in land records, such as RTC etc.,

RULES OF PROPERTY SIUCCESSION

Advocate S Selvakumar | Advocate at Koramangala | Advocate at HSR

THE Hindu Succession Act 1956 popularly known as Act 30 of 1956 was passed by both the houses of parliament and received  the assent of the president as on June 17 1956. After the enactment, various states have amended the Act, and the union government has also proposed to amend the Act to give equal status to women in joint family property.

The succession to the estate of a deceased Hindu is not automatic, and Hindu Succession Act contains various provisions like re-marriage of a widow, murder and conversion to other religious, which disqualifies the legal heir to succeed to the estate.

Judgment of Supreme Court

 Recently the Supreme Court in one of its judgments held that if the son murders his father, the murderer  is not entitled to inherit the property of the deceased father, who was murdered. It further held that it is not only the son, who is a murderer, but his entire stock, his wife, children are also not entitled to succeed to the assets of the deceased.

 One Sri Singaperumal the only son who had murdered his father Ramaswamy Konar, thus incurred the disqualification clause. But his wife Vellikannu, petitioned the Supreme Court seeking inheritance of the property of her father-in-law. The court decided against the petitioner and  held that “a person who has murdered a person, through whom he wants to inherit the property, stands disqualified on that account. That means he will be deemed to have pre-deceased, then the when a son cannot succeed then the wife who succeeds to the property through the husband cannot also lay claim to the property of her father -in-law.

Remarriage

   Section 24 of the Act refers to widows remarrying. The Act does not disqualify all the widows who are entitled to succeed, but only certain heirs, who are widows.

  The disqualification is only in case of intestate succession and not in case of testate succession, where the testator bequeaths his property through will. The following category of heirs  are disqualified from succeeding to the estate of the deceased:

            1)         Widow of a pre-deceased son.

            2)         Widow of a pre-deceased son of pre-deceased of son.

            3)         Widow of a brother.

  First two are class first heirs and the third one is a class second heir. The section further states, the above mentioned widows are disqualified, if they are remarried on the date on which succession opens. The succession opens on the date of the death of the person, whose estate is being inherited. If they marry subsequent to that date, they do not incur any disqualification under this section.

Conversion

  Section 26 of the act refers to the position of legal heirs who are converted to other religions. The section deals with such converts, who are converted to another religion even before the commencement of Act which is 17/06/1956 and those who are converted after the commencement of the Act.

 The children born to such converted and their descendants are disqualified from in heritage the property of any of their Hindu relatives, provided such children, their descendents are not Hindus at the time when succession opens. Thus, a very interesting situation emerges through the words used in s section. “Shall be disqualified from inheriting the property of any of their Hindu relatives, unless such children or descendants are Hindus at the time when succession opens.” So if the children or descendants of a person who have ceased  to be Hindu by conversion to other religious are reconverted to Hindu religion at the time when succession opens, they are not disqualified from inheriting  the property of any of their Hindu relatives.

Murderer

 We have discussed this aspect at the beginning of the article. Section 25 of the Act states that when a person.

1) Who commits the murder or 2) Who abets the commission of a                                murder,

Shall be disqualified from inheriting the property of person murdered or any other property in furtherance of the succession to which he or she committed or abetted the commission of murder.

This section is applicable where a person commits the murder or even abets the commission of a murder whose property is to be inherited. Thus, a person who commits or abets the commission of a murder is not entitled to inherit the property of the person who was murdered. The Act further expands the disqualification to any other property in furtherance of succession to which one committed the murder or abetted the commission of the murder.

 A son who commits or abets the murder of his father, a husband who commits or abets the murder of his wife or a wife who commits or abets the murder of her husband are not entitled to succeed to the property of the persons who were murdered.

 Section 27, of the Act stipulates how the property of deceased devolves, when legal heirs invites disqualifications under this Act. The property of the deceased will devolve as though, the disqualified person has died before the person who was murdered. His existence is not considered at all for development of the property. Recent Supreme Court Judgment has debarred entire stock of the murderer, his wife, children from succeeding to the property of deceased.

RISK ON PURCHASING REVENUE SITES

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Agricultural lands cannot be used for residential purpose, until such lands have been converted from agricultural to non-agricultural residential purpose. Special Deputy Commissioner is the competent authority to order for such conversion after paying requisite conversion charges. A site formed on the agricultural land, without conversion is called Revenue Sites. It is only after conversion of the agricultural land, layout can be formed. However, Layout has to be approved only by the competent authorities. BDA is the competent authority to approve layouts formed in the urban or rural areas in Bangalore, while BMRDA can approve layouts formed outskirts of Bangalore. However, to obtain approval for formation of layout, compliance of rules and regulations contemplated by BDA or BMRDA regarding road width, residential area, civic amenities, other amenities have to be fulfilled.

Zonal Regulations

As per zonal regulation of comprehensive development plan, certain extent of land will be considered as green belt area which must be used only for agricultural activities. Agriculturallands not converted continue to be an agricultural land and there are various restrictions on sale and purchase of such agricultural land.

Purchase of Revenue Site

There are many instances wherein people buy a revenue site without knowing the legal implications involved in buying such sites. The intending purchasers most commonly approach middlemen or local brokers, who, with their marketing skills persuade them to buy such revenue sites, concealing vital defects and flaws in the title of the owner. Ultimately, it is the innocent purchaser who faces the legal battles for defending their property.

Acquisition and Granted Land:

Apart from the site being formed on the agricultural land, there are several instances where the land would have been notified for acquisition by certain statutory authorities or may even be land granted for schedule caste/schedule tribe. In any such circumstances, if sites are formed on such land without obtaining any prior approval from the competent authorities, the purchaser of such a site would not get any valid title over the property. Infact, law stipulates that the lands granted to the schedule castes, will revert back to the grantee himself if purchased in violation of certain mandatory provisions envisaged under the statute.

Form 9 and Form 10

Property falling under the village Panchayath area, which has been marked as Gramathana area in the Village Map by the Survey Department and having Form No.9 and 10 is considered to have genuine site status. Form No.9 and10 is issued for the property coming under Gramathana village Panchayath area. Further, though the form nos. 9 & 10 mention the site number and area in square feet, the original records continue to identify the property by mentioning survey numbers and extent of the land in Acres and Guntas. In such case, it would be very difficult to identify the exact site, its area and boundaries and link with form no.9 & 10. Added to this, the middlemen, in connivance with some of the revenue officials have involved in creating bogus Forms No.9 and 10 and on the basis of such forms, properties are being conveyed in favour of innocent purchasers.

It is not permitted under law to form layouts and sell the sites in the agriculturalland or green belt area since even after conveying such sites RTC (Record of Rights, Tenancy and Crop Inspection) reflects the name of the original landowners as the Kathedar. 

Loan facility

If the title deeds are not clear and does not establish marketable title, it is very difficult to obtain bank loans for construction by creating mortgage on such sites. Generally, these sites are situated on the city outskirts. Generally infrastructure will be very poor with no proper roads, electricity or water supply. Further, scope for improvement of infrastructure and providing civic amenities is also very less. Inspite of all these, if the purchaser buys such sites, the original landowner will appear from nowhere and start cultivating the area soon after the prices starts rising high. The purchaser will then find it difficult to identify his property since the boundaries prevailing at the time of purchasing the site would be removed. In such cases, the only remedy available for those aggrieved is to approach court of law. Infact, only a fraction of the deceived purchasers feel that the laws are helpful under such circumstances. 

            Hence, it is advisable for the buyers to invest their hard earned money on the sites that has been approved by the competent authorities and does not attract any violation of provision of law pertaining to Law Revenue Rules, Land Reforms Act or other relevant laws. An experienced advocate would give better guidance since the documents pertaining to the property would be diligently and thoroughly scrutinized by an Advocate before the purchaser proceeds to buy the property without involvement of any kind of legal complications and dream to own a house would become a reality.

RESTRICTIONS ON TRANSFER OF IMMOVABLE PROPERTY

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Among various types of ownerships, the ownership of the immovable property is very important.  The ownership of the immovable property is classified into free hold and lease hold.  Free hold is absolute ownership, which means the owner has full freedom to deal with the property as he likes without any restrictions.

                               

The three important rights enjoyed by owner of property are: 1. Right to use, 2) Right to destroy and Right to transfer:

No Fundamental Right:

The important right is the right to transfer:  It may be noted that, this right to transfer is not absolute right, but it is subject to restrictions imposed by the law.  In this regard the first and foremost important restriction flows from the constitution of India.  Before 44^th amendment to the Indian Constitution, Right to property was fundamental right U/A 31 dealing with Right to own property and U/A 19 (1) (f) dealing with right to dispose and enjoy property.  These two rights were protected by Art 13 (1) (2) in the Indian Constitution, which provided that any law including rules regulations, notifications, ordinance etc., to the extent they violate fundamental right are void.

This protection has come to an end by 44^th Amendment, deleting Right to property in the chapter of Fundamental rights and placing it in the ordinary rights chapter i.e., Art 300 A.  Thus the right to property more so of immovable property is no more a fundamental right.

Agricultural land:

Various States have enacted laws, imposing restrictions on the rights of the owner of the property.  The government of Karnataka has prescribed certain ceiling on holding of the agricultural property by persons, companies, societies etc., under Karnataka land Reforms Act, 1961.  The limit prescribed depends upon the type of land.  If the holdings are in excess of prescribe limits, the excess holdings will vest with the government of Karnataka.  The Karnataka Land Reforms generally prohibits transfer of agricultural property to Non Agriculturists and Persons having source of income more than Rs. 2 lakh (average for last 5 year income) from non-agricultural sources.

Though agricultural property cannot be transferred to non-agriculturists.  Karnataka land Revenue Act provides for conversion of agricultural land to non-agricultural land such converted land can be transferred to non-agriculturists.

 

Land acquisition:

There is another important legislation i.e., Land Acquisition Act, 1898.  Which provides for acquisition of property for public purpose and for the purpose of company.  Once the government issues preliminary notification for the acquisition of such land, whether agricultural or non-agricultural, such property cannot be transferred to any other person, here again authorities competent to acquire property and Central or State Government and other government agencies like BDA, KIDB, KHB etc.,

Zonal regulation:

The comprehensive development plan has categorized the areas into various zones like residential, commercial, industrial, green belt area etc., and has also prescribed the various activities that can be carried out in such zones.  The owners have to comply with such prescribed area, permission from planning authorities required for any change.  In green belt area only agricultural and allied activities are permitted and the conversion of land is allowed. 

PTCL Act:

The important social welfare Act with regard to Transfer of property is “The Karnataka SC & ST (PTCL) Act, 1978, i.e., the preamble of the Act provides that “An Act to provide for the prohibition of transfer of certain lands granted by the government to persons belonging to the scheduled castes and scheduled tribes in the state, which means any land granted to the landless agricultural laborers belonging to scheduled castes and scheduled tribes cannot be purchased without the permission of Government.  Any one who purchases such property will not get clear and marketable title; such property will be acquired by Government and returned to original owner.”

These restrictions on the transfer of property are social in nature i.e., to give effect to importance Directive principle of State policy provided u/A 39(b) & 48 A of the Indian Constitution.  Art 39(b) of the Indian Constitution provides that:

1)       That the ownership and control of the material resources of the community are so distributed as best to sub serve the common good.  Article 48 A in the Indian constitution provides that.

2)       The state shall endeavor to protect and improve the environment and to safeguard the forests and wild life of the country.

Transfer of Property Act

In the Transfer of property Act there are certain partial restrictions on the transfer of property.

Sec. 52 – Doctrine of  lispendens  which provides that if any suit relating to immovable property is pending in competent court and during such pendency if, property is transferred such transfer is subject to decision given by the court.

Sec. 53 – which deals with fraudulent transfer, prohibits of transfer of property if the purpose and intention behind such transfer to defraud or delay the creditors of the transferor:

But Sec 10 in the T.P. Act provides that any condition imposed by Transferor to Transferee absolutely from parting with or disposing of his interest in the property is void.  This provision facilitates transfer of property by transfer without any restrictions.  However, the act allows temporary restrictions.  Various development authorities, societies restrict alienation for some period.  This freedom of transferee can be curtailed in case of lease for the benefit of lessor, property transferred to woman, for the benefit of woman not belonging to Hindu, Mohammedan or Buddhist so that she shall not have power during her marriage to transfer or charge the  same  or her beneficial interest thereon.

In T.P. Act very important restriction is transfer of property to unborn person, under section 5, where the transfer of property is between living persons only.  But Sec 13 provides for transfer of property to some other person for the benefit of such unborn person.

           

Purpose of imposing restrictions on Transfer of property in the Transfer of property Act, 1882 are for: To protect the interests of creditors, To protect the interest of persons having better title to the property.  To prevent property being removed from trade and commerce.  To sum up, broadly there are two kinds of restrictions on the transfer of property.  They are: 1. Restrictions to protect the society as a whole, (2) Restrictions to protect the interest of transferor creditors and people having better title.

The other restrictions are: Sect, 48A: Occupant of land under Karnataka land Reforms Act 1961, Sec: 77: Grantee of land under Karnataka Land Reforms Act 1961, Sec: 100: Occupancy not transferable without sanction of prescribed authority Karnataka Land Revenue Act 1961.

Purchase of property NRI / POI:

Lastly foreign national of non-Indian Origin resident outside India cannot purchase any immovable property in India.  Whereas Non resident Indians can purchase residential and commercial properties without any restriction on ceiling on the number of properties.  The only restriction on the non resident Indians is they cannot purchase agricultural, Farm / plantation property.  In this regard Non-resident of Indians need not have to send any document or statement to Reserve Bank of India, government of India or to any bank before, during or after such purchase.  This freedom is available to all non-residents who are either citizens of India (i.e., holding Indian Passports) or who are persons of Indian Origin.  This freedom is available for buying residential or commercial property.

Persons of Indian Origin means persons one who hold an Indian Passport any time earlier or whose father or grandfather was a citizen of India.

RESTRICTIONS ON THE USE OF THE IMMOVABLE PROPERTY

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The absolute owner has absolute rights over the property.  He may use the property as he likes.  But there are certain compulsions, which restrict his rights to use the property as he likes.  The restrictions are imposed under various levels, mostly in common interest of public in large. When any person becomes owner of property, one of his/her important right is  right to use and enjoy the property in any lawful purpose and peaceful manner.  The Transfer of property Act provides for certain exceptions.  This is reflected in Sec 11 of Transfer ofproperty Act – 1882, which provides as follows:  Sec 11 Restriction repugnant to interest created —  “Where on a transfer of property, an interest there in is created absolutely in favour of any person,  but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there no such direction”.

Absolute Title

Sec  11  directs that there can be no restriction on the enjoyment of property which has been transferred absolutely.   Eg.   Where the property has passed absolutely to the purchaser, any direction contained in the sale deed which is contrary to the absolute enjoyment  is void and not enforceable.

But, Section 11 Provides for an exception. This stipulates that if any restrictions  are imposed on a piece of immovable property for the purpose of securing the beneficial enjoyment of another piece of such property such directions/restrictions shall prevail over. This situation arises mostly in case, where a portion of proportion is transferred and the another portion is retained by the owner or other co-owner.  The owner may put some restrictions on the use of the property sold for the benefit of portion of land retained by the owner.  However such restrictions are not binding on third parties who are not a party to the contract.

Restriction by its owner

Section 40 of the Transfer of property Act also deals with restrictions on the use of the property by its owner.  The section prescribes “Where, for more beneficial enjoyment of his own immovable property, a Third person has independently of any interest in the immovable property of another person, or any easement there on, right to restrain the enjoyment in a particulars manner of later property.  This is right of  a third person, who is not a party to the contract.  This right is available against transferees.  But such rights are  enforceable against a transferee with notice or against a transferees who got the property without consideration, they are not enforceable against transferee without notice or against a transferee with consideration or against the property. There are clear differences between section 11 and 40.  The restrictions under section 11 are positive or affirmative.  These restrictions are enforceable only against the parties to the contract.  But restrictions under 40 are negative in nature and are enforceable by the third parties, against transferees. Another important section which restricts the use of property is section 17, of T.P. Act, according to this section, the transferor may direct the transferee to accumulate, the income arising from the property.  The direction may be to accumulate the income either in full or in part.  However such directions to accumulate the income cannot be permanent.  Such directions may be imposed for a period of eighteen years from the date of transfer or for the life of transferor whichever is longer.  Any directions for accumulation of income arising from the property, transferred for a period longer, than the periods referred are void.

For example, the grantor of the property may provide for enjoyment of the property by Mr. “A’ until Mr. “B” attains 18 years of age and also direct Mr. “A” to accumulate the income from the property until “B” attains 18 years of age.  But transferor can direct the transferee to accumulate the income arising from such property for indefinite period for the purpose of

·           Payment of the debts of the transferor

·           The provision of portions of children

·           Remoter issue of the transferor

·           For the preservation or maintenance of the property transferred

Conversation of Land

Section 95 of In Karnataka Land Revenue Act, provides that,  agricultural land cannot be used for non-agricultural purpose without the permission of the Deputy Commissioner and Section 97 provides that non-agricultural land cannot be used for agricultural purpose again without permission of the Deputy Commissioner.   This is mainly to control the conversion of agricultural land and to protect agriculturists.

The Karnataka Land Reforms Act, under Section 109, allows use of agricultural lands for certain other purpose by some institutions with permission of Government.  Such institutions may use agricultural land for non-agricultural purpose, but cannot sell such agricultural lands.  Permitted uses are industrial development, educational institutions, places of worship, housing projects, horticulture, floriculture and agro based industries.  There are restrictions on holding of the agricultural property a depending upon the  nature of the use.

Zonal Regulations

The Karnataka Town and country planning Act, 1961 Sec 14 (1) provides that “On and from the date on which a declaration of intention  to prepare an outline is published  under Sub-Section (1) of Sec – 10  every land use, change in land use and every development in the area covered by the plan shall conform to the provisions of this act the Outline Development plan and the regulations as finally approved by the State Government under subsection (3) of section 13.  Sec 14 (2)  provides that such change in land use or development as is referred to in sub-sec(1) shall be made except with the written permission of the planning Authority which shall be contained in a commencement certificate granted by the planning authority in the form prescribed u/s 15(1)  Sec 15(4)  says that if any person does any work on, or makes any use of any property in contravention of Sec 14(1), the planning authority may direct such person by notice in writing, to stop any such work in progress or discontinue any such use, and may after making an inquiry remove or pull down any such work and restore the land to its original condition or as the case  may be take any measure to stop such use.   Also Sec 300 of the Karnataka Municipal Corporations Act, 1976 provides that the construction or reconstruction of a building shall not be begun unless and until the commissioner has granted permission for the execution of the work,   Sec 304 provides that the commissioner shall not permit the construction of any building of public entertainment or any addition thereto, if such building is:

Within a radius of 200 meters from any residential institution attached to a recognized educational institution such as, a college or High school or Girls School or Public Hospital with a large indoor  patient ward or an orphanage containing one hundred or more inmates.

Situated in any thickly populated residential area which is either exclusively residential or reserved or used generally  for residential as distinguished from business purposes.

Located in any area reserved for  residential purposes by any housing or planning scheme or otherwise under any enactment.

The planning authorities and Local bodies also impose restrictions on construction, use of the land mostly to ensure orderly constructions with natural light and air and also to provide peaceful and proper ambience and atmosphere to educational institutions, hospitals.

The department of forest and environment restricts the use of the property near sea coast, under coastal zone regulations.  There is restrictions on construction of high rise buildings.  The properties near catchments areas also suffer from certain restrictions.  FAR and setbacks, though are restrictions on use of property are for the mutual benefits.

In apartments, the owner of flats own undivided share of the land individually and common spaces jointly.  Use of the common space is subject to certain restrictions imposed owners’ association.  All these restrictions are for common benefit.

                                                                                                                      

RESTRICTION ON IMMEDIATE SALE OF BDA LAND

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            The allotment of Site Rules 1984 of Bangalore Development Authority (BDA) has been amended and the government of Karnataka has brought back the Lease-cum-Sale method. Though Lease-cum-Sale method was in vogue for many years, the relevant rule (Rule No.7) was omitted in the notification dated 23-10-2000. But, the State government in notification dated 27-4-2005 has reintroduced the Rule No.7.

            Many cities across the world have development authorities. They are the planning authority also. They control and regularize orderly  growth of cities. Earlier, Bangalore had City Improvement Trust Board (CITB) which was replaced by Bangalore Development Authority (BDA) from 8-3-1976 by a separate Act “Bangalore Development Authority Act 1976 (Karnataka Act 12 of 1976)”.

            The object of the Act is for development of Bangalore and areas adjacent. One of the major functions of BDA is to acquire land around Bangalore, form layout and allot sites to the applicants.

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Lease-cum-sale

            Allotment of sites by BDA is not a commercial venture, but purely to serve the social cause of providing a shelter to the needy. The authority has to ensure that its purpose is not defeated by land grabbers, middlemen concerning the allotment.

            Bangalore Development Authority (Allotment of Sites) Rules 1984 provides that any one or any member of whose family owns a site or an house or has been allotted a site or house by BDA or a Co-operative Societies registered under Karnataka Co-operative Societies Act 1969 or any other authority within Bangalore Metropolitan Area is not eligible to apply for sites from BDA. This is to ensure that only persons, who do not own site or house in Bangalore Metropolitan Area, are provided with sites at affordable price much less than market value.

            Lease-cum-sale method further ensures that they allottees do not misuse the site and sell it to make quick money. The allottee will not get absolute ownership of the site. He will enter into lease-cum-sale agreement with the BDA and for certain period, he will be only a lessee of the BDA and does not have authority to sell the property. Further, he has to construct a house as per the approved plan in the allotted site within specified period. Only after the lapse of lease period and on fulfilling the conditions like construction of house, BDA will execute Absolute Sale Deed in favour of allottee. However, the user is entitled to avail housing finance for the purpose of construction of house building.

            As stated earlier, this method was omitted from 23-10-2000 and BDA was executing the absolute sale deed to the allottee immediately after the full payment made. This has reduced the work load procedure wrangles at BDA office and the allottee has an asset to fall back in case of necessity and emergency.

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Misuse

            The abolition of lease-cum-sale which was done to help the public was misused. Though the site allotment rules prohibits anyone who owns a site or a house from applying for allotment, many landlords, middlemen, and real estate agents started applying for sites through proxy candidates or on their own name suppressing the facts. There are many poor people, slum-dwellers who sign the applications for some money. As soon as the allotment was done, the sites were sold at the prevailing market price making huge profits. This is in a way contributed to price spiral apart from defeating the very purpose and social cause.

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Reintroduction

            To avoid this blatant misuse of BDA sites, lease-cum-sale was reintroduced by government notification dated 27-4-2005. The reintroduced rule (Rule 7) reads as follows:

            Rule NO.7: The allotted under the rules shall be deemed to have been leased to the allottee on lease, unless the lease is determined or site is conveyed in the name of the allottee in accordance with these rules.

            During the period of lease, the allottee shall pay to the authority before commencement of each year, rent at the rate of Rs 5 per annum, where the area of the site does not exceed two hundred square meters. Rs 10 per annum where the area of the site exceeds two hundred square meters, but does not exceed five hundred squared meters, and Rs 20per annum, where the area of the site exceeds five hundred square meters.

            The procedure is a follows: After the payment of the value of site, the authority invites the allottee to execute lease-cum-sale deed in the prescribed form within 60 days which will be registered in the registrar office. The allottee will be put in possession of the site. The lease-cum-sale agreement contains various conditions like restriction or alienation of property, time-limit to construct house, ground rent payable.

            The allottee shall construct a buildings as per the plans approved by the authority within a period of five years from the date of agreement.

            The authority may extend this period at the request of the allottee. If the allottee fails to complete the construction of house within five years or permitted period, the lease will be cancelled. The authority forfeits 12.5 percent of the value of the site paid and refunds the balance amount to the allottee.

            After the expiry of 10 years of agreed lease period, the authority calls upon the allottee to get the absolute sale deed executed and registered provided that the lease has not been cancelled earlier.

            Though absolute legal title has not passed to the allottee during the lease period, he shall pay taxes, fees, cess payable on site or building.

            Restrictions

            The allotted site cannot be sold within a period of 10 years from the date of possession. However, the site may be mortgaged in favour or central/State government, financial institutions to secure loan for construction of building. If the site is sold within a lease period of 10 years, the authority after due notice may cancel the allotment, resume the site and forfeit the amounts paid.

Surrender of site

            If the allottee ops to surrender the site during the lease period for reasons beyond his control like insolvency etc., the authority with the previous approval of the government, will compensate the allottee as follows:

            a)         In case of surrender of vacant site without building, the authority shall pay value of site paid by the allottee together with interest at the rate of 12 per cent per annum.

            b)         If the building is constructed on the site, the authority shall permit the allottee to sell the property provided he pays interest at 12 percent per annum to the authority on the value of the site paid.

Implications

            The revised procedure would curb commercial marketing of the site immediately after allotment and also partly control the price spiral. But, incase of absolute necessities and emergencies, the allottee will resort to alienating the property by executing Power of Attorney by which the purchaser would not get proper title.

            Though the BDA rules has provisions to surrender the site, the returns are too meager in case of surrender of site. As the allottee has to pay interest to the BDA for permission to sell the site with building, he will look into other means.

           

Complication of title

            Of course, the re-introduction of lease-cum-sale for BDA allotted sites is a right thing for the genuine and users. However, looking at the modus operandi of the allottees, they will try to sell the properties by way of GPA/ Agreements/ Affidavits/ Undertaking etc., which will lead to complication of title.