Advocate Selvakumar

‘A’ KHATA PROBLEMS OF BANGALORE PROPERTIES

Advocate Selvakumar | property advocates in Bangalore | advocates in Bangalore

Property house owners underneath the bounds of  Bruhat urban center Mahanagara Palike (BBMP) face ton of confusion and hurdles in getting khatas from the BBMP. Khata primarily is a crucial property identification document issued by the native civic body to acknowledge the possession of a property in their limits. Khata contains the main points of property like name of the owner, dimension of the plot or size of the building, location of the property and different details that helps properly house owners to file land tax. aside from this khata is needed for applying for building licence, for trade licence, for loan from any banks or money establishments etc.,

In 2007 seven town municipal councils (CMC) Kengeri city Municipal Council (TMC) and one hundred ten villages, were brought underneath the administration of urban center Mahanagar Palike (BMP). Thus, nearly 2/3rd space was extra to the prevailing 1/3rd space underneath BBMP. solely properties that were approved by the urban planning authorities and a few different properties strictly orthodox to the bye laws of the BBMP are issued ‘A’ Khata. For the remaining  properties within the freshly extra areas the house owners will pay tax to BBMP and obtain the ‘B’ khata kind. in keeping with BBMP there's nothing like ‘B’ khata, however it's solely associate extract of the B register maintained by the civic authorities to create entries of the taxes collected on the properties.

‘A’ Khata is needed to be obtained from the BBMP to acknowledge the possession of a property that makes the house owners eligible to receive civic amenities extended to them. But, most of the properties within the recent CMC areas currently returning underneath  BBMP have several disadvantages in obtaining ‘A’ khata as several irregularities concerning land conversion, building bylaw violations etc., square measure rampant in these properties. to get ‘A’ Khata the land ought to be DC regenerate, house owners ought to have paid up up to now tax and additionally paid betterment charges to the BBMP concerning regenerate lands. All political parties guarantees the general public regarding ‘Akrama – Sakrama’ theme for regularizing unauthorized / building violation constructions. But, nothing is occurring during this regard until date.

The Government should take concrete steps to mitigate the issues of property house owners in urban center town either by implementing the antecedently planned theme of ‘AKRAMA – SAKRAMA’ or different theme, to regularize the property ownerships by assembling only once penalty / fees, facultative the voters to use and acquire ‘A’ Khata for his or her properties. The urban planning  authorities should be a lot of argus-eyed and not permitting nonlegal developments within the starting itself

11 MONTH LEASE DEED MUST BE REGISTERED

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HC says if unregistered, such deeds cannot be ‘received as evidence of any transaction affecting the property’

The common practice of lease deeds (including rental agreements) between property owners and tenants for 11 months to avoid registering the deed is not the right thing to do. The high court of Karnataka has held that deeds where the term of the lease stated does not exceed one year alaso have to be registered.

In a particular case, the court held that such unregistered deeds cannot be received as evidence of any dispute between the tenant and property owner, unregistered deeds will only serve collateral purpose in courts and not as evidence.

Abdul Rasheed, a tailor and tenant of Srinivas, a retired district judge, approached the HC against a lower court order that refused to accept as evidence four unregistered lease deeds. Justice HG Ramesh probed the question “Whether a lease deed, where the term of lease stated therein does not exceed one year, requires to be registered under the Registration Act, 1908”.

In a significant order that comes as a surprise to common perception of this aspect of law, the courtheld, “In law, the lease deeds of the afore to be registered and therefore, such unregistered lease deeds cannot be received as evidence of any transaction affecting the property.”

Rasheed in his petition claimed that under the Act, if the term of the lease was less than one year, there was no need for registration.

Section 107 of the Act says, “ A lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.” However, the HC order stressed the second paragraph of the section 107 which says, “All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.” Section 49 of the Act says that documents that need to be registered but are not cannot “be received as evidence of any transaction affecting such property.” The court held that the second paragraph of section makes it mandatory for lease deeds less than one year to be registered if they are not just oral. Therefore under section 49, they become inadmissible in court if not registered.

However, the court gave liberty to Rasheed to approach the trial court with the same documents specifically stating that they are for ‘collateral purpose’ only. Therefore unregistered lease agreements can be used only as collaborative evidence in court. The order renders most rental agreements invalid as evidence in court ifa dispute arises between the lessor and lessee.

 “Usually in disputes about rents, the rent receipts are produced as evidence. It is mostly residential properties that are registered for 11 months. Commercial properties usually have a longer lease agreement. The order is an eye-opener. In court, property owners do not produce the lease agreements as they are unregistered. If it is impounded by the court, they  will end up paying 11 times the stamp duty. This order may lead to a fresh struggle between house owners and tenants.”

A COMPARATIVE LOOK AT NRIs, OCIs AND PIOs

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Indian citizenship and citizenship of a Foreign country cannot be held at the same time as it is not allowed by the Constitution of India.  A new class of Citizenship i.e., Overseas Citizen of India (OCI) was therefore created by amending the Constitution to compromise with dual citizenship.

Dual Citizenship and holding of two nationalities at the same time of two different  countries is categorically prohibited by both Article 9 of the Constitution of India and Section 9 of the Indian Citizenship Act, 1955.OCI are specifically prohibited political rights and other rights by Section 7B of the Citizenship Act and they have only multiple entry lifelong visa facility to visit India any time for any purpose.

Under the Ministry of Home Affairs Scheme of August 19, 2002, the registration of Person of Indian Origin ( PIO ) Card holders was started and from December 2, 2005 the OCI scheme became operational.  We need to know the difference between an NRI, a PIO and an OCI.

For this purpose, the following description is given:

Non-Residential Indians ( NRIs ):

A person resident in India and a person resident outside India are defined in Section 2 of the Foreign Exchange Management Act, 1999 ( FEMA ).  However, this portion does not define the term NRI.  According to a notification, NRI means a person resident outside India who is either a Citizen of India or is a person of Indian Origin.

A person who resides in India for more than 182 days  in the preceding financial year and who comes or stays in India for any purpose is a person ‘resident’ in India according to FEMA.  A person who is not a resident in India is defined as a ‘Non Resident’.  An NRI, therefore, is an Indian Citizen who ordinarily residents outside India and holds Indian passport.

Persons of Indian Origin (PIO):

A foreign citizen who held an Indian Passport at any time; or he/she or either of his/her parents, grandparents or great grandparents was born in and was a permanent resident in India; or he/she is a spouse of a citizen of India or of a person of Indian Origin is what is meant by a Person of Indian Origin.

PIO card holders are permitted to visit India  without visa for 15 years and have to register with Foreigners Registration Officer ( FRO ) in India if the stay is more than 180 days continuously.  PIOs have equality with NRIs where certain facilities are concerned but do not have any political rights and may apply for Indian Citizenship after residing in India for a minimum of seven years.

Overseas Citizen of India ( OCI ):  

A foreign national is eligible for registration as OCI if he was eligible to become a Citizen of India on January 26, 1950, or was a citizen of India on or at any time after the said date or belonged to a territory that became part of India after August 15, 1947 and his / her children and grand children are also eligible for registration as OCIs.  They will enjoy a multiple entry, multi purpose life long visa to visit India, do not have to registerhttp://www.advocateselvakumar.com/qna.php with Foreigners Registration Officer (FRO)/Police authorities however long they may stay in India and have the right to benefits notified under Section 7B of the Indian Citizenship Act, 1955.  If an OCI is registered for five years and resides in India for one year he can be granted Indian Citizenship but will have no political rights.

Bank accounts in India can be opened out of funds remitted from abroad, foreign exchange brought in from abroad or out of funds legitimately due to them in India by NRIs / PIOs.  They can open these accounts with Banks that are authorized by the Reserve Bank of India.  

ACTIONABLE CLAIM

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Actionable claim is defined in Section 3 of the Transfer of Property Act as a ‘claim to any debt other than a debt secured by mortgage of immovable property or by hypothecation or pledge of moveable property or to any beneficial interest in the moveable property not in the possession, either actual or constructive of the claimant which the civil courts recognize as affording grounds for relief, whether such debt, or beneficial interest be existent, accruing, conditional or contingent.

Accordingly, this mean, it excludes not only a claim to any immovable property for a debt but also a debt secured or any moveable property in possession of the claimant. It follows, therefore that it is a claim for a simple debt or liability and which can be realized by a legal action.  

An actionable claim is called, in English Law, a chose in action or a thing in action as against a chose or money in possession. It denotes incorporeal personal property of all disciplines and an interest in corporeal personal property not in possession of the owner which accordingly can only be claimed or enforced in action. Therefore, while the different types of moveable property governed by the Sale of Goods Act can be called as chose in possession, an actionable claim is also a type of moveable property called chose in action.  It is also a moveable property because a debt is a property and anything which is not immoveable property is moveable property.

Actionable claim as defined in Section 3 of the Transfer of Property Act, as a chose in action is different from two other such chooses in action namely the right or property by way of copyright, trade-mark, patent, or design, and also to stocks and shares or debentures of a limited Company or the negotiable instruments under the Negotiable Instruments Act, which also evidence a debt and which are recoverable by legal action.

Section 137 of the Transfer of Property Act clearly provides that sections 130 to 136 will not apply to stocks and shares or debentures or to instruments which are negotiable or to mercantile documents of title to goods.  Marine Insurance claim is also excluded by Section 135 A of that Act and is dealt with in the Marine Insurance Act, XI of 1933. They are also governed by independent separate statutes passed in respect thereof and are not, therefore, governed by the Transfer of Property Act.  That Act in Section 130 only provides for transfer of actionable claims as defined and circumscribed by the Transfer of Property Act. As to transfer of the earlier mentioned actionable claims separate provisions are made for transfer thereof by the statutes governing them.

Actionable claims within the meaning of Section 3 of the Transfer of Property Act, therefore, cover (i) claims to unsecured debts and (ii) claims to beneficial interest in moveable property not in possession actual or constructive whether present or future., conditional or contingent. Such actionable claims could be (a) a right to claim maintenance (b) a right to arrears of rent (c) a right to annuities (d) moneys payable under a contract for price or advance (e) a right to claim benefit of a contract (f) a partner’s claim for accounts and his share therein (g) insurance claim, other than marine insurance (h) salary in arrears (i) book debts (j) a fixed deposit receipt, etc.  However, a mere right to sue is not assignable.  Similarly, a decree is not assignable under this section, as no legal action is required to be taken to recover the claim.  The decree itself can be executed. Similarly any other property which is not transferable, under Section 6 of the Transfer of Property Act is not assignable under Section 130 of the Transfer of Property Act. Marine Insurance Policy, negotiable instrument and documents of title to goods are specifically excluded by Section 135 A and Section 137 of the Transfer of Property Act as stated above.

Assignment:

Every actionable claim or chose in action is assignable except in four cases:

(1)  where the assignment is prohibited by law,

(2) where the terms of the contract under which the claim accrues prohibit such assignment,

(3)  where the contract is of a personal nature, and

(4)  where the assignment would increase the burden on the other party.

An actionable claim can be recovered by a legal action by the person who is the claimant or creditor. Section 130 of the Transfer of Property Act provides that a transfer of an actionable claim shall be effected by execution of an instrument in writing, signed by the transferor or his duly authorized agent in favour of the transferee and in that case all the rights and remedies of the transferor, whether by way of damages or otherwise shall vest in the transferee, whether notice of such transfer is given to the debtor or not. But when no such notice of transfer is given to the debtor and the debtor in ignorance of such transfer repays the debt or claim to the original creditor or claimant, he would be discharged from the liability.  On such transfer the Transferee would get all the rights of the creditor including the right independently to recover the debt without the original claimant’s consent or co-operation.  The deed of transfer need not be signed by the transferee and also does not require attestation or registration.

The written instrument assigning a debt can be in any form, if the intention to transfer is clear. A mere letter to the assignee by the claimant that he has assigned the debt to him is sufficient.

An assignment of a debt may be absolute or by way of security or even as a gift. The words with or without consideration in the definition of actionable claims are used to cover even a gift.

An assignment becomes effective from the date of writing, unlike English Law under which it becomes effective from the date of notice to the debtor.

The provision in the Transfer of Property Act regarding assignment of actionable claim does not apply to claims under Marine Insurance Policy or Fire Insurance Policy or affect any provisions of the Insurance Aft, 1938.

Section 134 of the Transfer of Property Act also shows that assignment of the actionable claim by way of charge is also possible to secure the debt due by the transferor to the transferee and provides how the debt assigned when recovered is to be applied viz., first in payment of costs of recovery, secondly, in satisfaction of the amount secured and thirdly, in payment of the balance if any to the transferor or other person entitled thereto.  Section 136 if the Transfer of Property Act above quoted does not apply to assignment by a charge or security, though such assignment is also recognized in English Law as equitable assignment.

An actionable claim would include

(a)     any debt due to or moneys recoverable by the transferor (except the moneys payable under a negotiable instrument)

(b)     any moveable property belonging to the transferor and not in his possession or power and which he has a right to recover or receive and

©       any claim or benefit under a contract belonging to the transferor but without any liability attached thereto.

An Assignment can be made either by a formal document or even by a letter to the debtor of the transferor but not orally.  An irrevocable Power of Attorney to recover a debt and to adjust it towards the amount due to the done is held as an assignment. An actionable claim can be assigned even as a gift that is without consideration as Section 130 of the Transfer of Property Act in terms so provides.

Apart from what is stated above, the following are held to be actionable claims:

     (1)a debt due or to become due, or whether conditional or contingent

     (2)  future rents

     (3)  amounts payable under a deed

     (4)  amount due under a policy of life insurance

     (5)  a letter of credit

     (6)  right under a contract

     (7)  beneficial interest in moveable property

     (8)  confirmed sale price

     (9)  earnest money becoming repayable

   (10)  deposit receipt

   (11)  dividend due on shares, etc.

But a mere right to sue or claim for damages or mesne profits are not assignable.As regards transfer of shares, stock and debentures, the provision in respect thereof is made in the Companies Act.

As regards actionable claims in the nature of negotiable instruments, the Negotiable Instruments Act, makes special provision for the transfer thereof by endorsement. It may however be stated that a promissory note whether negotiable or not or other such instruments can be transferred by a separate instrument of transfer instead of by mere endorsement.

An assignment of an actionable claim is not required to be registered under the Registration Act.It is desirable that the document of assignment is executed both by the Assignor and the Assignee and in duplicate, one copy remaining with the Assignor and other with the Assignee.        

The Income Tax Ombudsman Guidelines 2010

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The Income tax Ombudsman Guidelines are introdu.ced with the objective of enabling the resolution of complaints relating to public grievances against the Income Tax Department and to facilitate settlement of such complaints.

The Ombudsman shall be independent of the jurisdiction of the Income Tax Department. The offices of Income Tax Ombudsman shall initially be located at New Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad, Pune, Lucknow, Bhopal and Kochi.

GROUNDS ON WHICH COMPLAINT CAN BE FILED:-

A complaint on anyone or more of the following grounds alleging deficiency in the working of the Income-tax Department may be filed with the Ombudsman:

(a) delay in issue of refunds beyond time limits prescribed by law or under the relevant instructions issued from time to time by the Central Board of Direct Taxes;

(b) sending of envelopes without refund vouchers in cases of refund;

(c) non adherence to the principle of 'First Come First Served' in sending refunds;

(d) non acknowledgement of letters or documents sent to the department;

(e) non up-dating of demand and other registers au leading to harassment of assesses;

(f) lack of transparency in identifying cases for scrutiny and non communication of reasons for selecting COl the case for scrutiny;

(g) delay in disposing cases of interest waiver;

(h) delay in disposal of rectification applications;

(i) delay in giving effect to the appellate orders;

(j) Delay in release of seized books of account and assets, after the proceedings under the Income-tax Act in respect of the years for which the books of account or other documents are relevant are completed;

(k) Delay in allotment of permanent account number (PAN);

(l) Non credit of tax paid, including tax deducted at take! source;

(m) Non adherence to prescribed working hours Income Tax officials;

(n) Unwarranted rude behavior of Income Tax officials with assesses;

(0) any other matter relating to violation of the administrative instructions and circulars issued by the Central Board of Direct Taxes in relation to Income-tax administration.

PROCEDURE FOR FILING THE COMPLAINT

Any person, who has a grievance against the Income-tax Department, may, himself or through his registers authorized representative, make a complaint against the Income-tax official in writing to the Ombudsman.

(a) The complaint shall be duly signed by the complainant and his authorized representative, if any, and shall state clearly the name and address of the complainant, the name of the office and official of the Income-tax Department against whom the complaint is made, the facts giving rise to the complaint supported by documents, if any, relied on by the complainant and the relief sought from the Ombudsman;

 (b) A complaint made through electronic means shall also be accepted by the Ombudsman and a print out of such complaint shall be taken on the record of the Ombudsman.

(c) A print out of the complaint made through electronic means shall be signed by the complainant at the earliest possible opportunity before the Ombudsman takes steps for conciliation or settlement.

(d) The signed printout shall be deemed to be the complaint and it shall relate back to the date on which the complaint was made through electronic means.

No complaint to the Ombudsman shall be kept pending unless:-

(a) the complainant had, before making a complaint to the Ombudsman, made a written representation to the Income Tax authority superior to the one complained against and either such authority had rejected the complaint or the complainant had not received any reply within a period of one month after such authority had received his representation or the complainant is not satisfied with the reply given to him by such authority;

(b) the complaint is made not later than one year after the complainant has received the reply of the department to his representation or, in case, where no reply is received, not later than one year and one month after the representation to the Income Tax Authority.

(c) the complaint is not in respect of the same subject matter which was settled through the Office of the Ombudsman in any previous proceedings whether or not received from the same complainant or along with anyone or more complainants or anyone or more of the parties concerned with the subject matter;

(d) the complaint is not frivolous or vexatious in nature.

No complaint shall be made to the Income-tax Ombudsman on an issue which has been or is the subject matter of any proceeding in an appeal, revision, reference or writ before any Income-tax Authority or Appellate Authority or Tribunal or Court.

IT IS NOT INTEREST RATES REDUCTION; IT IS UNDER CUTTING FOR HOUSING FINANCIERS

IT IS NOT INTEREST RATES REDUCTION; IT IS UNDER CUTTING FOR HOUSING FINANCIERS

On the pretext of reducing the interest rates on home loans, Teaser Rates are back.  Housing Financiers follow their own Prime Lending Rates (PLR) and for this, the Reserve Bank of India (RBI) has already released the Banks from following the PLR. The RBI announces PLR just as an indicative level only. Hence, every Bank has its own PLR. According to Union Budge proposals, the interest rates on home comes under the priority sector upto Rs.25 lakhs, for which the Government gives subsidy of 1% through National Hosing Bank refinancing schemes. For this, the Government had given funds to National housing Bank and allowed it to raise funds through Capital Gain Tax exemption bonds.

Now, under these circumstances, the Act of Banks in reducing the rates is sheer market forces pressures and nothing to do with the RBI policies and various credit rates by which the RBI controls the inflation and other currency related issues. DSA’s and Agents of Banks are now cutting under each other’s Clients because, Real Estate Industry is going through its worst phase and nothing is moving. Volumes have declined and New Clients are not entering into it.

To survive in the Housing Finance Market, the Players are now under-cutting in the name of Teaser Rates. The new reduced rates are not for existing Clients. Under floating rate options, the Borrower must get the advantage of reducing the interest rate but unfortunately, these reduced rates are not for existing Customers of the Banks, but for the Customers from either other banks or to the new Customers.

The Foreign Banks are more aggressively luring the under-cutting by not announcing in the Public. But, their Agents are active in the market. The first two to three years, leverages are been given and then again the same old bad practice prevails as to not to give advantage of interest rate reduction to the Borrower of floating rate housing finance.