An Article About "Law of Limitation"

Law of Limitation

Every person includes a right to approach courts to hunt justice. There area unit numerous laws enacted by the central and State governments regulation the rights of voters and procedure of juridical - proceedings. Law of - limitation may be a restrictive law, wherever the rights of the persons to approach courts area unit regulated, with the time issue being- necessary. an - individual has got to approach the court inside sure prescribed amount if not his right to hunt Justice through courts is lost. Law of limitation is each adjective and substantive law. although superficially law of limitation looks to curtail the rights of the subject, it's truly proactive, forcing to approach the court inside the limitation amount. If not - folks would have waited, may need mamma out the graves, to open age recent litigations and courts would have flooded with cases. One might imagine true within the country within the absence of limitation law, as even currently there's backlog of cases altogether the courts. 

Contents:

The law of limitation that was enacted in 1908, had sure inherent defects and shortcomings, that were exposed by numerous judicial verdicts. The act was revised  simplified, came into force from first January 1964. The act contains thirty two sections and 137 articles; wherever because the act of 1908 had thirty sections and 183 articles. The   sections take care of the final principles applicable to the extension of your time, whether or not by reason of incapacity, acknowledgement and half payment. The sections area unit divided into 5 half's; part-one- is preliminary, half IInd deals with limitation of suits,  appeals and  applications, half IIIrd deals with computation of amount of limitation, half IVth deals with acquisition of possession by possessions and half Vth deals with saving provisions. Out of 183 articles, articles from one to 149 take care of suits, articles 150-157 take care of appeals, articles 158 to 183 relate to applications. The revised Act has some salient changes; the foremost necessary being the most amount of limitation is thirty years, that is accessible to a few varieties of suits.

1.    Suits by mortgagors for the  redemption of recovery of possession of unmovable property. 

2.    Suits by mortgage holder for proceedings

3.    Suits by or on behalf of Central government or authorities as well as state of Jammu and Kashmir.

The recent Limitation Act has prescribed sixty years as limitation amount to suits to redeem or recovery possession of unmovable property encumbered.

The second longest amount of limitation is twelve years, prescribed for numerous varieties of suits concerning unmovable property trusts and endowments. The limitation amount for contracts, accounts, declarative suits, suits concerning decrees, instruments and suits concerning movable property is 3 years. The limitation amount variable from one to a few years is prescribed for suits concerning torts and miscellaneous suits and conjointly in respect of suits that no specific amount of limitation is provided within the  schedule to the Act.  A minimum limitation amount of ten days is prescribed for applications for leave to look and contest a suit below outline procedure from the date of summons. 

Important Sections:

We shall discuss some necessary sections. significantly, the Limitation Act considers all the instruments be created with regard to Gregorian calendar, wherever the years area unit computed from the date of the birth of Christ that is wide used. the current year is 2004 in line with Gregorian calendar.

Another necessary provision is  legal incapacity. The one that is   entitled to file a suit could also be plagued by legal incapacity at the time from that the limitation amount starts, like minority, mental disease etc. just in case of such persons, the limitation amount starts once the legal incapacity is cured. just in case of the legal incapacity continues till the death, his legal heirs might institute the suit, inside identical limitation amount once the death. just in case the person below legal incapacity dies once the incapacity is cured however inside the limitation amount allowed, his personal representative might institute the suit inside identical amount, once the death as otherwise would are offered to the   person had he not died. To be a lot of clear we have a tendency to shall study associate illustration.  

Mr. A has season some quantity to B on the  security of demand promote.  The limitation amount is 3 from the date of promote. But Mr. A was suffering some legal incapacity throughout the amount of 3 years and recovers within the fourth year. The limitation amount of 3 years starts from the fourth year. however A can nor institute any suit and dies at the top of 5th year.. Mr. A had a balance amount of limitation of 1 year. therefore his personal representative might institute a suit inside one year once the death of A.

Expiry of prescribed amount once courts closed:

The limitation amount might expire on every day, once- the court is closed. In such cases the suit could also be filed on the date once court re-opens. so the Court holidays area unit excluded whereas computing the limitation amount. 

Extension of amount in sure cases

If an individual might satisfy the court, that he had spare reasons for not preferring associate charm throughout the limitation amount, the court might admit the charm, even once the end of limitation amount.

Any suit, charm application created once the prescribed amount is vulnerable to be unemployed except wherever specific provisions area unit created. The dates of instituting suits, preferring appeals or creating applications are thought of as follows.

A suit is alleged to be instituted once the plaint is conferred to the correct officer.

In case of a poor person once his application for leave to sue as poor person is created.

In case of a claim against a  company, that is being aroused by the court, once the applier sends his claim to the official liquidator.

An Article About "Occupancy Certificate"

Occupancy Certificate

 

 

Occupancy Certificate is a very important document. It evidences the completion of the building as per the approved plan and compliance of local laws. Local bodies like city corporations / city municipalities issue occupancy certificates. Without occupancy certificate, it is difficult to get the water and sanitary connections. Financial institutions also insist on occupancy certificate.

Problems with respect to issuance of occupancy certificate arise on account of violation of building laws, which are increasing day by day. Though the people have spent their hard earned money on the project with a dream of owning a house, they could not occupy the house for want of occupancy certificate. They have to suffer for none of their faults.

Having invested their precious money in such buildings and after waiting for many years to get  occupancy certificate, the purchasers  are forced to occupy the flats even without power, water and sewerage connections instead of loosing the property.

In one of the cases, a builder was unable to obtain the occupancy certificate. After a prolonged wait, he requested his purchasers and handed over the apartments without power, water and sewerage connections. He put the entire blame on the revenue authorities and disappeared. The occupants had to find their own ways.

Obtaining the approval of the plans has become just a casual affair and nobody will abide by that. It is just a document to be produced during inspection. During the boom time, a builder constructed several houses and flats violating building rules and regulations. He deviated from the approved building plans and went on to construct apartments where he should not have constructed.

The civic authorities refused to give occupancy certificate despite the best efforts of the builder.

In the mean time, the apartment purchasers on the assumption that things were happening to their satisfaction, performed house-warming ceremonies and took possession of the flats. When they were about to move in, the builder revealed the shocking news that even though he had constructed the apartments and houses to their liking the authorities were not issuing occupancy certificate on one pretext or the other.

Another builder constructed small flats targeting the middle income group. The authorities, however, refused to issue occupancy certificate because of deviation from the approved plan. In this case, the builder got the plan approved for construction of 4 dwelling units, 2 on the ground floor and 2 on the first floor, However, he did some thing different in gross violation of the approved plan. Instead of constructing 4 dwelling units, he constructed 6 dwelling units. The persons who invested in the flats are now desperate, as they would lose their money and the flats if the authorities decide to demolish the structure.

It is not that only the flat owners are suffering. A few builders, who have a heart for the investing public, too face problems.

One such builder constructed 8 flats in accordance with the building regulations and bye-laws and approved building plan. He has completed 5 flat and 3 remains to be completed. The builder received full payment from five purchasers while the other three backed out. This has put the builder in a difficult situation. For want of funds, three flats remained incomplete and occupancy certificate could not be obtained as the authorities will issue occupancy certificate only after completion of the entire construction. The financial institutions refused to lend in the absence of occupancy certificate or no objection certificate from the authorities. The net result was that not only the builder was losing money but also the purchasers of the flats, who have to pay interest to the financial institutions. The financiers too face difficulties in getting repayment of loan installments.

The authorities in the scheme of things must be blamed for this state of affairs. The inspecting authorities do not carry out periodic and surprise checks at the construction site. In case of deviation, they should take the builder to task in the beginning itself and not at the fag end of the construction. Majority of the builders follow rules and regulations but a few do not. They disobey rules and regulations and volate them.

This is a vicious circle, which only the government can break. Government must initiate immediate remedial action to stem the rot. The authorities should not be very rigid in granting completion certificates. If the builder has deviated a little more than the allowed percentage, the authorities may impose a penalty and regularize the building.

The investors too are responsible for this fiasco. They do not check the antecedents of the builder and his track record. Before taking possession, they do not check whether the building is according to the sanctioned plan and the fixtures are according to the agreement. Many do not demand occupancy certificate, parent documents, title deeds, deposit receipts from the builder.
The purchaser who has not collected the required documents has to face various types of problems at a later stage.

DETERMINING THE MARKET VALUE OF A PROPERTY

DETERMINING THE MARKET VALUE OF A PROPERTY

The guideline value of a property is documented and published by the State Government. This is a public document that indicates the minimum value of the land considered for registration. 

It helps the registering officer to detect prima facie any undervaluation of property. It is left to the buyer or seller to find out through various sources what the market value of a property is. This is difficult task and can become a contentious issue during disputes involving compensation for land acquisition. How does the court view this and what methods they recommend?

Market value, in simple words, is the price that a willing prudent buyer will offer to a willing prudent seller. But in the case of land acquisition, it is not the willing seller but someone who is forced to sell. Hence there is need to have a method to arrive at a market value. 

The value depends on the theory of supply and demand which again depends on various factors like the economy, purchasing capacity and laws of the land.

The Full Bench of the Madras High Court in the case of Sakthi & Co vs Shree Desigachary (2006) 2 CTC, suggested three methods to ascertain the market value of the property. 

(1) Avail the opinion of experts 

(2) The price paid within a reasonable time in bonafide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages. Evidence of bonafide sales between willing prudent vendor and prudent vendee of the lands acquired or situated near about that land possessing same or similar advantageous features would furnish basis to determine the market value.

(3) To arrive at a value based on the number of years passed since the last purchase of the actual or based on immediately prospective profits of the lands acquired. To explain this further one can arrive at the value by multiplying the number of years passed since last purchase with the net annual income.

The other way to arrive at the value by capitalization method

The above excerpts were referred by the court in the case Mis. Greaves Ltd vs V.S. Raghava and another (2007) 4 MLJ 229

Settled Law 

The court further added that "It is settled law, as laid down in the judgments referred above that in determining the market value the court has to take into account either one or the other three methods to determine the market value of the lands appropriate on the facts of a given case. According to the Supreme Court, generally, the second method of valuation is accepted as the best."

The courts state that the evaluation of these factors depends on the facts of each case and there cannot be hard and fast rule. 

It also adds that common sense is the best and most reliable guide. The courts stipulate that every case must be dealt on its own set pattern bearing in mind all the factors as a prudent purchaser of land in which position the officer/judge must place himself or herself in.

Defining the phrase "opinion of experts", the Madurai Bench of the Madras High Court in the case A. V. Gopalakrishnan vs. O.L.Y.R. Paramanandam (2007) 4 MLJ 189) observed that the person "should be brought under the definition of expert as required under the Indian Evidence Act".

An Article about "Holding of Property by Company"

Holding of Property by Company

 

Company is an artificial person created under the Companies Act 1956 with perpetual succession and common seal. It is a legal person different from its members / shareholders. It possesses all the powers to enter into valid contracts, sell, purchase, hold, lease and mortgage the immovable property. It has a legal entity. 

There are two important types of companies. They are private limited company and public limited company. Any two persons can form a private company and its membership / shareholders are limited to 50. A minimum number of seven persons can form a public limited company. 

Under the Companies Act, the registration of both private limited company and public limited company is compulsory. The certificate of incorporation is issued on registration. The registrar of Joint Stock Companies issues the certificate of commencement of business to the public limited companies. This is not applicable to private limited companies. 

The Memorandum and Articles of Association is an important document of a company. The memorandum refers to the objectives and powers of the company and articles of association deals with the powers, duties, liabilities of the Board of Directors, share holders / members and rules and regulations governing the management of the company.

Common Seal: Companies are not physical persons who can sign. Common seal is the physical form of the company. The common seal is used as a physical impression made upon the documents executed by the companies. This is special seal engraved on steel block. This is to supplement the signature of the corporate officers and to authenticate company documents.

Authorization by a resolution of the Board of Directors of the company or by an authorized committee of the Board is necessary to affix the common seal. In case of some companies the articles of association deal with affixing of the common seal. 

Immovable Property Transaction: The Transfer of Property Act mentions that a living person includes company. It is taken for granted that all outsiders are aware of the contents of the Memorandum and Articles of Association of a company. The Memo randum and Articles of Association deals with the objectives of the company. The powers and rules regarding governance of the company must be verified to ascertain that the transactions are as per the objectives and are within the powers of the company. 

The Articles of Association specifically deal with powers of the directors regarding sale, purchase and mortgage of immovable property. 

The company may also execute Power of Attorney under its common seal empowering any person to execute deeds on its behalf. 

Director, Managing agent, Secretary, Treasurer, Manager or any authorized official may also authenticate the documents on behalf of the company, and it need not be under the common seal. 

Any charge created by the company on its property needs to be registered with the Registrar of Companies within 30 days of such creation of charge by filing Form No.8. Charges not registered within the stipulated time are not taken into account against the liquidator of the company on liquidation, or against any creditor. 

Such registered charge will serve as notice to all persons dealing with the property. 

The Registrar of Companies maintains the Register of Charges and it is open to the public for inspection. This is different from the details maintained at sub-registrar office and mentioned in the Encumbrance Certificate. It is necessary to inspect the Register of Charges while transacting with the company Apart from the Register of Charges maintained by the registrar, the company is also bound to maintain a Register of Charges on its properties. This is open for inspection by the members of the company or creditors. 

The Companies Act has restricted the powers of the Board of Directors on conveyancing in some cases. Section 293 of the Companies Act deals with these restrictions. 

Consent of the general body of the company is mandatory to sell, lease or otherwise dispose of the whole or substantially the whole undertaking of the company. Like wise the consent of the general body of the company is necessary to borrow in excess of the aggregate of the paid up capital and free reserves. The Board of Directors cannot authorize this type of transaction without the prior consent of the general body. The only exception is temporary loans taken by the company from its bankers in the ordinary course of business.
So, while transacting with the company it is necessary to ascertain that the property is not whole or substantially whole part of the undertaking of the company and if the transactions involve whole or substantially whole part of the undertaking, the consent of the general body is obtained. However, where the ordinary business of the company is selling / leasing this restriction will not apply. 

Similar caution needs to be exercised when the company borrows on mortgage of its properties in excess of its paid up capital and free reserves. If the company is in liquidation, only the liquidator, with the sanction of the court, can sell its property in the name of the company.

 The Board of Directors by a resolution in the board meeting has to authorize the sale, lease, mortgage or otherwise disposal of the property / purchase of the property. The resolution by the Board of Directors is necessary even in cases where general body has consented. 

Unless the Memorandum and Articles of Association empowers the Board of Directors to sell / purchase/ otherwise deal with immovable properties, any resolution passed by the Board of Directors in this regard will not be binding on the company. At times, it so happens that some of the directors have interest in some transactions. Such interested directors are not allowed to participate in the discussions and vote. Otherwise, the resolution is void.

If the resolution prescribes affixing of the common seal on the documents, it has to be followed in the manner prescribed in the resolution. 

Copy of the resolution passed by the Board of Directors, certified by the Chairman and counter signed by the Secretary should be obtained, which should be part of the documents. 

The dealings with and by a foreign company are governed by Foreign Exchange Maintenance Act, 1999. 

According to the FEMA 1999, a company resident outside India, which has established in India, a branch, office, other place of business, for carrying on any activity in accordance with Foreign Exchange Management Regulations, 2000, excluding liaison office, can acquire an immovable property in India which is necessary for carrying on its activity after complying with all the applicable laws, rules, regulations and directions in force for the time being, such company has to file form IPI with RBI within 90 days of acquiring such a property. Such company is also permitted to mortgage the immovable property as security to an authorised dealer for borrowing.

Agreement for sale of immovable property

Agreement for sale of immovable property

Agreement for sale is a very important document. It is a pre-requisite for sale of immovable property. It records the understanding reached between the parties which is binding on both. The main ingredients of Agreement for sale are consideration, terms of sale, handing over possession and rights of both the parties to enforce the agreement and penalty for not performing the contract. The agreement to sell also contains the acknowledgement by the seller to the amount which the purchaser pays as advance.

The provisions of Transfer of  Property Act governs the process of sale of immovable property. After making preliminary enquiries, the parties sit and discuss the price and other terms and conditions and thereafter these are incorporated in the Agreement for sale. It contains clauses which protects the interest of both the parties   specially the purchaser who has parted with the money.    

Many parties tend to avoid the agreement to sell and directly go for the sale deed but can prove very risky in the future. Agreement to sell is also required to avail bank loan. Without the agreement to sell any of the parties may back out from performing their part of the contract. It may happen that the vendor may tend to give the property to another purchaser with a better sale consideration even after the purchaser is ready with the sale consideration and other formalities as to stamp duty and registration. Similarly even the purchaser may also back out if he finds out  similar property for lesser value. If the agreement to sell contains any conditions which differ from the rights and obligations of the seller, purchaser as provided in the T.P Act then , the terms which are agreed in agreement to sell shall prevail over. If no such conditions are mentioned regarding the rights and obligation in the agreement then the provisions mentioned in T.P Act shall operate.

Having paid the advance amount, (or) earnest money, will the purchaser has any charge or lien over the property for the amounts paid?

The T.P Act governs the rights and obligations of the seller and purchaser.

Rights of an agreement Holder: 

Sec 54 of the T.P Act deals with the sale of immovable property and the purchaser acquires the title and ownership to the property only if the transfer takes place in conformity with Sec 54.

Sec 54 of T.P. Act states that “Sale how made  such transfer in the case of tangible immovable property of the value of one hundred rupees and upwards can be made only by a registered instrument. Registration is compulsory in regard to a sale deed and the purchaser to acquire title to the property and the agreement to sell itself does not create any charge or interest in the property.
In this kind of situation if the seller refuses to transfer the property under agreement to sell then the questions which arise for consideration are:

•    Whether purchaser under agreement to sell is entitled to only damages or the  immovable property as per agreement?

•    If the purchaser under agreement to sell is in possession of immovable property can he be disposed of immovable property?

Considering the first question, Sec 40 of Transfer of Property Act states that “Where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immovable property but not amounting to interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof. 

FOR EX; ‘A makes a contract with B whereby he sells a house to B. While the contract is still in force A sells the same house to C who already has the notice of the contract. In this case B can enforce the contract against C in the same way as it was enforceable against A. From this we find that, the purchaser with notice of a previous contract for sale of the same property is in the eye of the law is a trustee of the prospective purchaser of previous agreement of the property  purchased. According to the sec 91 of the Trust Act, the subsequent purchaser’s title with the knowledge of the previous agreement is dependent upon the obligations contained in the agreement to sell. Therefore the agreement holder has the right to proceed against the purchaser of the property who had the knowledge of the existing contract. Even under the sec 27(b) of the Specific Relief Act, the purchaser under agreement to sell is enabled to compel the subsequent purchaser to execute a sale deed in his favor.

The agreement to sell may be registered in order to get a better hold on the property to be purchased and a paper notification must be made to the general public to notify the same.

Purchaser in possession of the property:

For the second question as said earlier i.e., if the purchaser under agreement to sell is in possession of the property, can he be dispossessed of the immovable property?

Sec 53 of the T.P Act is applicable in this regard which provides that when:

a) The seller has agreed to sell the immovable property for a consideration

b) Such agreement is in writing and signed by him.

c) Prior to the execution and registration of sale deed the contract provides the purchaser with the possession of the property

d) in part performance of the contract, the seller has put the purchaser in possession of the property agreed to be sold;

e) the purchaser in possession under the agreement continues to be in possession in part performance of the contract; provided the purchaser has done some act in furtherance of the contract.

f) the purchaser under agreement has performed or is willing to perform his part of the contract, than the purchaser has a right to protect his possession of the immovable property under the agreement. The right or title of the subsequent purchaser is subject to the prior agreement of sell who purchased the property with notice of the prior agreement.

A person has to be in possession of the property by virtue of a legal document in order to avail this benefit. A person has to prove that he has taken the possession of the property in part performance of the contract and if he was already in possession he continues to be in such possession in part performance of the contract and had done some act in furtherance of the contract seeking protection under the doctrine of part performance and he must show that he is ready to perform his part of contract and in such cases the only way for the seller is to seek for payment of balance of sale consideration.

For More:

Advocate Selvakumar

RISE OF BANGALORE’S REAL ESTATE

RISE OF BANGALORE’S REAL ESTATE

The city of Bangalore is emerging as a global hub of technology in India. The transition had its impact on many fields and one such being the real estate, which is witnessing radical changes. With these current developments, there has been steep increase in the prices, resulting in huge fluctuation in the rates. Nevertheless, the advent of major industries in Bangalore has brought about consistency and stability over the fluctuating prices real estate scenario.

There has been exceptional growth in the population due to increasing numbers of migrants from different states to Bangalore city. As a result, there is a huge demand for housing solutions. In order to cope up with the increasing demand for housing, new layouts, both private and BDA are coming up, which, in turn, has brought about the balance between the increasing demand for houses on one hand and stability in house prices.

Factors for demand

The rapid increase in the demand for the quality residential space is due to the following reasons:

-> Rise in the income of the middle class, thereby improving their expectations levels, and the main reason behind this is the growing IT Boom.-> Easy availability of finance for purchasing properties in Bangalore-> Need of accommodation facilities for employees of multinational companies such as IT, BPO at Bangalore.-> Invasion of large Corporate sectors houses and expansion of the existing MNC’S.
-> Investment by NRI’s in the quality developmental / residential projects to own a house or an apartment in Bangalore 

Preferred city:

As we know, the city of Bangalore attracts one and all due to various reasons, such as:

•    Better career opportunities.
•    Easy availability of potential manpower
•    Pleasant weather
•    Descent standard of living
•    Good social life, recreation and entertainment facilities

Nevertheless, above factors overshadow the unpleasant side of the Bangalore City such as poor infrastructure, development, inefficient administration of the public and statutory bodies, etc. 

The government, after realizing the pathetic condition of those who are in desperate search of a ideal property, yet hesitate to proceed due to unaffordable prices. The neighboring suburbs such as Banashankari, Hosur road, Mysore road, Whitefield, Bellary, Yelahanka, Devanahalli Road, and other places, where land rates are comparatively more affordable and reasonable compared with Central Business District 

The residential market in the city is witnessing increasing demand especially in the south-eastern and eastern parts of the city resulting in over 50% increase in value of the property, whether flat or vacant land, within last one year.

Foreign Direct Investment

The Government in Feb 2005, relaxed the ban on Foreign Direct Investment. As a result of the said relaxation, investment over the real estate in Bangalore has increased incredibly, not only by Indian investors, but also many enthusiastic foreign investors and the investment is estimated around 2 billion US$ 

B.D.A. ROLE

In order to cater to the fast growing demand for owning a house at Bangalore, initiative was taken by BDA, which formed three new layouts at Banashankari 6th Stage, Visveswaraya Layout, and Anjanapura Layout. Though the BSK 6th stage, Anjanapura and Visveswarya layouts were formed a long time back, nothing much have been done for its development. All the said layouts are not habitable at present. It may take another 5 to 10 years to live comfortably in these layouts.

The said layouts have been formed by BDA but has miserably failed in providing civic amenities such as sanitation facilities, electricity, water supply and various other facilities such as Road, Shopping, Parks. Etc.

As regards the more expected layout at Arkavathy is concerned, the same was delayed for quite some time due to unnecessary legal battles initiated pertaining to the commencement of the said project. However, the developmental activities was permitted to commence by  the Hon’ble High Court , but any such commencement is still expected from BDA. It may take some more time for everything to get into order. 

The same holds good with respect to the BMIC project and the Hi-tech City on Sarjapur road. Nothing is in order right now and a fast and sincere initiative should be taken by the Government to set right all the above.

Government duty 

Government is not encouraging the private builders to form layouts approved by BDA. Though, the private builders have sophisticated building excellence and potential man power, they are hesitant to proceed with the venture due to constant variation of government policies on guidelines and restrictions imposed on the developmental activities undertaken by such private builders.

Thus, owning a property in Bangalore with good civic amenities and at affordable would virtually become a dream, specially for people who aspire an apartment or a vacant land for affordable prices. Now burden lies on BDA, BMRDA and KHB to expedite quality developmental activities for the reasonable rate with all the basic civic amenities.

For More:

Advocate Selvakumar

An Article about "FDI in Real Estate"

FDI in Real Estate

 

Though the Indian economy was opened up and liberalization was set in, Foreign Direct Investment in real estate was not much encouraging.  Foreign investors preferred stock markets for investments.  Though there was much potential in real estate, the property laws of the country and investment climate deterred the investors.  The real estate is the mother of all sectors and supports many industries.  Even the Government of India earlier restricted the foreign direct investment for political and security reasons.

It is estimated that our country will require $24 billion of investments in next five years and development of real estate sector is vital for economic prosperity.

The previous government led by Atal Bihari Vajpayee realised the importance of reality sector; further liberalised the norms of FDI in township development, information technology parks, special economic zones and hospitality sector.  But many felt dilution of norms is half hearted. No doubt the new norms allow 100% FDI, but certain restrictions like minimum block-in-period of three years before repatriation of original investments and project completion stipulation that is 50% of the project should be completed within five years of possession of land work as road blocks. As such there were only few proposals in the beginning and later on FDI in reality swelled may be owing to immense potential available in the country. Many foreign construction companies are seeking clearance for investment as the reality sector.

Apart from the available potential there are other factors which have attracted FDI

A)    Increased demand
B)    Improving economy
C)    Availability of housing loans at reduced interest rates
D)    Rising real estate prices.

Confederation of Real Estate Developers of India (CREDAI) informs that the sector is set to witness capital infusion of about $7 bullion next year; out of which $ 5 billion is from foreign investors.

China is a serious competitor to our country, as foreign investors prefer either China or India. But of late, the investors are moving to India as they find that property sector in China is reaching a point of saturation and as most of landed property there are leasehold and owned by the Government.  Whereas in India the property is mostly freehold and potential is huge.  Our Bangalore scores over Mumbai as to the freehold land.  Another important factor is returns on investment in commercial or residential property which are comparatively higher in India, particularly Bangalore.  The chart below shows the returns on investments.

City	Yield rates P.A.
	Commercial (Offices)	Residential
Bangalore	11.0-12.0%	6.0-7.0%
Chennai	11.0-12.0%	3.5-5.0%
Delhi	7.5-9.5%	5.0-6.0%
Hyderabad	10.0-12.0%	6.0-8.0%
Kolkata	8.0-12.0%	5.5-7.0%
Mumbai	10.0-12.0%	5.0-7.0%
Beijing	9.6%	8.3%
Brisbane	7.0-8.0%	NA
Guangzhaou	9.0-10.0%	2.4%
Hong Kong	3.95%	3.75%

Most of the major cities are undergoing transformation, where hitherto locked lands of sick industries, mills, are put in market.

Many plots of sick and closed industries are being developed into apartments, shopping complexes, and recreation centres. The respective state governments are also encouraging such developments as they earn more revenue from such developed properties.  Foreign investors see a golden opportunity in investing in such developments, but domestic builders, relators do not have resources to siege the chance.  The following chart lists the major Foreign Direct Investments in India.  Bangalore has the distinction of highest foreign direct investment. $791 million from Canada based Royal Indian Raj International corporation for Royal Garden City, a fully integrated township is coming up.  The total development will include 35,000 residential units with an investment of approximately $2.9 billion and is scheduled to be completed by 2015 in various phases.

MAJOR FDIS IN INDIA

• Dubai-based Emaar Group has invested $100 million in a township project in Hyderabad that includes a hotel and a golf course.

• Jakarta-based Salim Group is to invest over $ 100 million in a 309-acre (124 hectares) township project in Kolkata.  This Rs.500 million ($ 11 million) project will be developed as a joint venture between Salim Group and the Kolkata Municipal Development Authority.

• High Point Rendel of UK, US-Based Edaw Ltd and Kikken Sekkel of Tokyo have teamed up to work on a township development project in Jharkhand.

• Canada-based Royal Indian Raj International Corporation is coming up with $791 million for Royal Garden City, a fully integrated township in Bangalore.  The total development will include 35,000 residential units with an investment of approximately $2.9 billion and is scheduled to be completed by 2015 in various phases.  This is the highest FDI investment till date.

• CESMA International Pvt. Ltd, a subsidiary of the Singapore government’s housing agency, alongwith the Andhra Pradesh State government, is promoting a township in Hyderabad.

• Lee Kim Tah Holdings (a Singapore – based company) with an investment of $115 million is developing a 100-acre mega township along with commercial complex and related social infrastructure near Mumbai.

• The Andhra Pradesh Housing Board has approved a 50- acre township in Vijayawada. CESMA International will construct houses and apartment blocks here.

• Malaysian developer IJM is working on a township spread across 35 acres in Hyderabad near Hi-tech City.

• Ho-Hup construction Company Berhad is coming up with a 125-acre development project at Shamshabad in Hyderabad along with the Andhra Pradesh Housing Board.

• SembCorp Engineers and Constructors Pte Ltd, Singapore, is working on eight projects in Mumbai, Pune and Bangalore.  The company has invested $50 million.

• Universal Success Enterprise Limited of Indonesia has signed a memorandum with Delhi-based developer Unitech Ltd for a $155-million information technology park and housing project in Kolkata.

• Singapore’s fifth biggest property group, Keppel Land Ltd made its first foray into India after buying land in India’s Software capital Bangalore for $ 13 million.  Keppel Land, which is partnering Purvankara Projects Ltd, is developing the first phase of condominium project located in an area known for high-tech campuses.  It will be launched in early 2006.

• Singapore-based Evan Lim & Co Pte Ltd is associated with a township development project in Visakhapatnam, Andhra Pradesh.