Advocate Selvakumar

Best advocate to verify property legal documents in Bangalore,

Monday, 7 September 2015

Zonal regulations cannot be imposed by the Government without acquiring the property

Zonal regulations cannot be imposed by the Government without acquiring the property

Being one of the fastest growing cities, Bangalore is experiencing a steady increase in the population, the main reason being that the rapid growth of Information Technology, which has earned the titles of “IT Hub of Asia” and “Silicon Valley of India”. With the view to implement schemes for regulating growth in the field of environmental exigencies, several legislations have been passed in different states, and one such act passed by the Karnataka Government is Town and Country Planning Act 1961. The role of the Planning Authority constituted under the said act is to implement schemes relating to public utility places, for developing the city in the planned manner, which includes public parks, Educational Institutions, etc.

The BDA is playing a vital role initiating step towards planning for development in Bangalore and accordingly prepared Comprehensive Development Plan (CDP) as per the Karnataka Town and Country Planning Act, 1961. The motto behind the implementation of such development plan is to develop the existing urbanized areas and extension of the already developed areas, which will avoid new developments in distant outskirts that lacks infrastructure and transporting. Added to this, CDP also aims at creating flexible land use zone, to strengthen and respond to the realistic regulations and finally to safeguard public interest also.

Supreme Court Judgement:

In the field of such Development Plans being implemented in various states, the recent Supreme Court, in its judgement in Raju.S.Jethmalani and others Vs State of Maharashtra and others, has envisaged certain mandatory procedures to be followed by the competent authority before initiating any action pertaining to the proposed Development Plan. However, the judgement mentioned above in particular pertains to Development Plan undertaken by the Government of Maharastra under Maharastra Regional and Town Planning Act 1966.

Welfare of the Public:

The Latin Maxim “Salus Populi est Suprema lex” which means the welfare of the public is the Supreme law, this is one of the well known law which deals with the public interest , to this maxim all other maxims of public policy must yield for the object that “ all laws are to promote the general well being of Society”. In other words “regard for the public welfare is the highest law”. “Necesstas Non Habet Legem which means necessity has no law is the another maxim that has been relied upon by the in the judgement delivered, which has been discussed in detail below.

Brief facts of the case referred to above are as follows:

Raju.S.Jethmalani and others V/S. State of Maharashtra and others (Order dated 5/5/2005)

On 18th of September 1982 draft development plan was prepared under Bombay Town Planning Act 1954 and Section 26(1) and 37 of the Maharashtra Regional and Town Planning Act 1966, for developing parks and Plot No. 437 and 438, measuring 2.00 Acres and 1.5 Acres was earmarked for the purpose of developing a park and was proposed to be named “Salisbury Garden”. The said plan was finalized and sanctioned on 5/1/1987.

The present controversy centers around the acquisition of the Plot No.438. In this regard, the Government issued notification, inviting objections and the Present owners submitted their objections for de-reserving the same. However, the proposal was initiated by the Maharashtra Government for de-reservation of the plot earmarked for development of the park, due to paucity of funds for acquiring the same and the impugned notification was challenged by a Public Interest Litigation.

The High Court suggested for a settlement that instead of quashing the impugned notification, the implementation of the said notification can be deferred for the period of two years and if the same could not be carried out within the time specified, then the notification shall be set aside. However, while delivering this judgement, burden was laid on the owners of the plot No.437 to provide necessary area, approximate in size, suitable for the purpose of garden and park as envisaged in the Development Plan. The said order was not challenged by the Owners and after the expiry of two years, the impugned notification became operative and direction was issued to the concerned authority to proceed accordingly. After such passing of the said order, an application was filed before the High Court, seeking clarification and the same was also dismissed. Aggrieved by both the orders, the Owners preferred Special Leave Petitions before the Hon’ble Supreme Court.

The Hon’ble Supreme Court held that though the Legislation does not prohibit any Authority from acquiring land belonging to any private person for implementing the Development Plan to provide amenities to the residents of the area, such land cannot be earmarked for development plan without acquiring the land, without which the right of the Owner to use his land for residential purpose will be deprived. In the present case, the said plot was earmarked for the purpose of developing a garden under its development plan of 1966, but no effort was made by the Municipal Corporation or the Government to acquire this Plot for the purpose for which it was proposed to be acquired.

However, suggestion was made to the parties to the PIL asking them to explore the sources for mustering funds for acquiring the plot, which is the subject matter of the litigation and since parties confessed their inability for the same, the Hon’ble Supreme Court passed the order giving six months time to the residents if they can raise funds for acquisition of the land by the Government and if the same could not be done within the specified period, then the Appellants / Owners can utilize the land for the residential / other purpose in accordance with law. In View of the above discussion, the appeals were allowed

The principles laid down by the Hon’ble Supreme Court is that though the Legislation does not prohibit any Authority from acquiring land belonging to any private person for implementing the Development Plan to provide amenities to the residents of the area. In case of such land being earmarked for development plan, then such Authority should first acquire such land, by following all the procedure envisaged under Law, without which the right of the Owner to use his land for residential purpose will be deprived.

C.D.P. in Bangalore:

In regard to the CDP being implemented by Bangalore Development Authority, the same principles are required to be followed. However, no final notification has been passed by the Government for giving legal sanction for CDP, which has led to lot of chaos among the public and impediments in its implementation by the competent authority. keeping in view the Supreme Court decision discussed above, anybody aggrieved by the act of such authority pertaining to their property being acquired for development plan can challenge the same in the Court of Law and the decision passed in this regard is binding on the Competent Authority.

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Advocate,

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STATE CONSUMER PROTECTION COUNCIL

Saturday, 5 September 2015

CONSUMER PROTECTION COUNCILS

CONSUMER PROTECTION COUNCILS

Consumer Protection Act 1986 provides for establishment of consumer protection councils. Such councils are of central, state and district. The main objective of these councils is to protect and promote the rights of consumer in connection with

1. His rights to get protection against marketing of goods, services, which are hazardous to life and property.

2. His right of information about the quality, quantity, potency, purity, standard, price of goods, services to get protection against unfair trade practices.

3. His right of assurance wherever possible access to the variety of goods/services at competitive prices.

4. His rights to be heard and to be assured that the interests of consumers will receive required consideration at related forums.

5. His right to knock at the doors of the appointed authorities for Redressal of grievances against unfair trade practices restrictive trade practices, unscrupulous exploitation of consumer.

6. His right to consumer education.

Central Consumer Protection Councils

The union government by notification may establish the central consumer protection council. It is also referred as central council. The central council consists of

1. Chairman - The minister in charge consumer affairs in union government.

2. The Vice Chairman - The minister of state, or deputy minister in charge of consumer affairs in central government.

3. Member Secretary – The Secretary in charge of consumer affairs in central government.

4. Members – The minister in charge of consumer affairs in state.

5. Five members from Lokha Sabha

6. Three members from Rajya Sabha

7. The secretary of National commission of schedule cast and tribes

8. The representatives of central government departments’ autonomous organisations concerned with consumer interest (not more than Twenty)

9. Representatives of consumer organisations for consumers (not less than Thirty Five)

10. Representatives of Women (not less than Ten)

11. Representatives of farmers, trade and industries (not more than Twenty)

12. Persons capable of representing consumer interests (not more than Fifteen)

The total number of members shall not be more than 150. The term of the council is 3 years. The council shall meet at least once in a year. The central council may constitute Standing Working Group to monitor and implement its recommendations. The Member Secretary shall be the Chairman of Standing Working Group. The total number of members shall not be more than thirty, who are selected out of the members of central council. The resolutions passed by Central Council are of recommendatory in nature.

The state governments by notification may establish state consumer protection council. This is also called as State Council. The minister in charge of consumer affairs in the State will be the chairman of the council. The number of members shall as fixed by the respective states comprising both official and non-official members and also members nominated by central government. The state council shall meet at least twice in a year.

DISTRICT CONSUMER PROTECTION COUNCIL

Consumer protection Act 1986 has prescribed certain procedures for filing complaint with the District forum; the complaint shall be within the pecuniary and territorial Jurisdiction and shall be within the limitation period. These aspects have been dealt in detail in previous issue.

The District Forum entertains complaints, which are related to goods sold, or agreed to be sold or delivered or to any services provided or agreed to be provided. The complainant; i.e. who files complaint must be a consumer to whom goods are sold or agreed to be sold or delivered, any services provided or agreed to be provided. Any recognized consumer association may also prefer a complaint. It is not necessary, that consumer who has actually suffered, to be a member of such association. In case there are more than one consumer, where all the consumers have common interest, any one may file a complaint with the permission of forum. The central or state Government may file a complaint in its individual capacity or as a representative of consumer interests in general.

Each and every complaint to the District forum shall have proof for having paid the prescribed fee. Many state Governments including Govt. of Karnataka have not prescribed any fee, for filing complaint with District Forum.

Depending upon the merits of the case, the forum may accept the complaint or reject it. But no complaint will be rejected unless an opportunity is provided to the complainant to present his case. The District forum has to decide about the admissibility of the complaint within twenty-one days of receipt of complaint. When once the complaint is admitted by the District forum, it shall not be transferred to any other court, tribunal or authority setup under any law, which is an force for time being.

The complainant has to submit three copies of complaints along with supportive documents to the District forum, in addition to as many copies as the number of respondents.

After admission of compliant, the District forum forwards the copy of the admitted complaint to the opposite party, within twenty-one days of admission of complaint, for submission of his version of the case. The opposite party has to submit his version of case within thirty days. This period may be extended by another fifteen days at the discretion of the forum.

The opposite party (respondent) may deny or dispute the allegations contained in the complaint or may even ignore the compliant. If necessary the District forum may arrange for analysis of disputed goods. In such cases, the complainant who has opted for analysis has to deposit the fees as specified with the forum for payment to the appropriate laboratory. The disputed goods have to tested and analyzed only at recognized appropriate laboratory. The forum shall seal the sample of the disputed goods, authenticate and forward to the appropriate laboratory with the fees directing to analyze the goods to find out whether the goods suffer from any defects as alleged in the complaint or any other defect and report to the forum. The report from the laboratory shall be made available to the forum within forty-five days of reference.

This time limit may be extended at the discretion of the forum. On receipt of the report, the District forum forwards, the copy of the report along with its remarks to the opposite party. If any of the parties disputes the finding of appropriate laboratory or the procedure followed for analysis, such objections have to be filed in writing with the forum. Thereafter, after providing reasonable opportunity to the complainant and opposite party and based on the evidence brought the forum shall settle the consumer dispute. The forum may also pass Ex-parte orders based on the evidence by the complainant, if the opposite party fails to take any action or to represent his case. If the complainant fails to appear on the date of hearing before the forum, the complaint may be dismissed or decided on merits.

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Advocate,

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Friday, 4 September 2015

EXCHANGE OF PROPERTY

EXCHANGE OF PROPERTY

In previous issues we dealt with transactions like, sale, and gift, mortgage that are different modes of transfer of property. Now, in this issue we will discuss about exchange. This is also a type of transfer of property akin to the age old barter system.

In barter system movable and immovable properties were exchanged based on the requirements of the transacting individuals. For example, a cow was exchanged for food grains and so on.

Section 118 of the Transfer of Property Act defines the term ‘exchange’. It defines exchange as transaction when two persons mutually transfer the ownership of one thing, for the ownership of another, neither the thing nor both being money only. The definition encompasses the exchange of both movables and immovable including money. The only condition is that one of the two properties to be exchanged should not be money.

Thus an immovable property may be exchanged for another immovable or movable property but not for money. However transfer of money for money is also exchange.

To simply the definition, it is a mutual grant of equal interest; the one in consideration of another.

Exchange is different from sale. Section 54 of the transfer of property deals with sale, which is defined as transfer of ownership in exchange for a price paid, part paid or part promised. The word “price” is defined in Sale of Goods Act as money consideration. As far as exchange is considered, the money cannot be transferred for any other property. Thus, the distin-guishing factor is the mode of payment of consideration; money in case of sale where as in case of exchange, it is paid in form of kind. Our concern at present is exchange of one immovable property with another immovable property.

If the values of both properties are not equal, then the difference in the value has to be paid by money.

Section 119 of the Transfer of Property Act provides the remedies for defective titles of the properties in exchange. For example, A and B exchange properties and later on ‘A’ finds that the title of the property received from B is defective. Now, ‘B’ is bound to make good, the loss suffered by ‘A’ and if ‘A’ desires to return the property received from ‘A’ canceling the exchange transaction. This liability extends to the legal heirs of B and also to the transferees who have received the exchange property without monetary consideration like Gift. Liability does not bind the bonafide purchaser. The procedure is similar to that of sale where first an agreement of exchange is drawn. Section 120 of the Transfer of Property provides that each party to the deal has rights and liabilities as that of seller as to what he gives and that of purchaser as to what he takes. Thus the rights and liabilities of the seller and purchaser as dealt in section 54 and 55 of transfer of property act will apply subject to the terms of agreement of exchange.

The transaction is complete only, when mutual delivery of possession of respective properties is completed as evidenced by deed of exchange. When a party to an exchange has failed to obtain the possession of the property which he is entitled; then also he is entitled for return of the property transferred by him provided the property is still in possession of the other party or his legal representatives or transferee without consideration.

Registration of exchange deed is compulsory. The stamp duty and registration charges are as per the respective State laws. In Karnataka exchange of property attracts stamp duty as that of conveyance based on the market value of the property of the greatest value which is the subject another of exchange.

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Advocate,

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JURISDICTION OF BANKING OMBUDSMAN

Thursday, 3 September 2015

ROLE OF BANKING OMBUDSMAN IN CUSTOMER SERVICE

ROLE OF BANKING OMBUDSMAN IN CUSTOMER SERVICE

The RBI has started the scheme of banking ombudsman, which can effectively interpret its rules and directives so as to bring about an amicable solution to the disputes between the bank and its customers. The customers desire quick, efficient and hassle free solutions to all their complaints and disputes with the bank, without being forced to run from pillar to post to register their grievances. This new scheme of banking ombudsman has come into existence to help customers resolve most of their complaints against the banks on the basis of the simple principle that every customer deserves a fair and speedy resolution of complaints.

In 1995, RBI established the office of banking ombudsman to address the customer service complaints of the customers, disputes arising between the customers and the bank and also between different banks. The banking ombudsman is a person of repute who is conversant with Legal provisions, Banking laws, Financial Services, public administration, or management sectors. A civil servant appointed to this post should be in the rank of Joint Secretary while a person from the banking sector should have had the experience of working as a whole time director in any public sector or equivalent position. Banking ombudsman is appointed by a committee of four persons consisting of three Deputy Governors of RBI and the Additional Secretary (Financial sector), and an official from the department of Economic Affairs, who acts as a special invitee. The appointment is for a period of three years.

Ombudsman can take into account the complaints of customers related to commercial banks, regional rural banks and scheduled co-operative banks. The complaints of the customers pertaining to Housing Finance can also be lodged before Banking Ombudsman, who has got the jurisdiction to adjudicate the grievance raised by the aggrieved.

Today, banking ombudsman has its offices in a number of states. The territorial jurisdiction of the appointed banking ombudsman is specified by RBI. The services of banking Ombudsman are offered free of cost to the complainants.

Banking Ombudsman has got the jurisdiction to entertain complaints pertaining to fixed deposits, savings and current bank accounts and other banking services.

GROUNDS OF COMPLAINT

I. A complaint on any one of the following grounds alleging deficiency in banking service may be filed with the Banking Ombudsman;

a. Non payment/inordinate delay in the payment or collection of cheques, drafts, bills etc.

b. Non acceptance, without sufficient cause, of small denomination notes tendered for any purpose and for charging of commission in respect thereof.

c. Inordinate delay in refund or non-payment of the amount deposited.

d. Non issue of drafts to customers and others.

e. Non adherence to prescribed working hours by branches.

f. Failure to honor guarantee/letter of credit commitments by banks.

g. Claims in respect of unauthorized or fraudulent withdrawals from deposit accounts or fraudulent encashment of a cheque or a bank draft etc.,

h. Complaints pertaining to the operations in any savings, current or any other account maintained with a bank.

i. Complaints from exporters in India such as delays in receipt of export proceeds, handling of export bills, collection of bills, etc.

j. Complaints from Non-Resident Indians having accounts in India.

k. Complaints pertaining to refusal to open deposit accounts without any valid reason for refusal.

l. Any other matters related to the violation of the directives issued by RBI in relation to banking services.

II. Complaints concerning loans and advances only in so far as they relate to the following may also be filed with the Banking Ombudsman having the jurisdiction :

a. Non observation of RBI Directives on interest rates.

b. Delays in sanction, disbursement or nonobservance of prescribed time schedule for disposal of loan applications.

c. No acceptance of application for loans without furnishing valid reasons to the applicant

d. Nonobservance of any other directions or instructions of RBI, as may be specified by RBI for this purpose from time to time.

III. The Banking Ombudsman may also deal with any other matter as may be specified by RBI from time to time in this behalf.

GRIEVANCE REDRESSAL PROCEDURE

Customers of any scheduled commercial bank, regional rural bank or a foreign bank having grievance against such Banks can approach the concerned jurisdictional banking ombudsman. It is necessary for the complainant to register those complaints within a year either in person or through any authorized person other than a lawyer. If the customer after registering his/her complaint with the bank does not receive any reply from the bank within one month or his/her complaint is rejected by the bank or he/she is not satisfied with the reply from the bank, then in such a situation the complainant can file his/her complaint with the banking ombudsman.

In the office of the banking ombudsman, the complainant is required to fill a two-page form and submit the photocopies of all the documents related to the complaint. Complaints can also be sent through post. After receiving the complaint, banking Ombudsman takes up the matter with the concerned bank and resolves the matter in three stages.

• The first stage is through correspondence with the concerned bank. The ombudsman sends a copy of the complaint to the bank and gives it 30 days to reply. In the meantime the concerned bank directly contacts the customer and resolves the matter. This is considered as the closure of the matter.

• The second stage proceedings are initiated by the ombudsman only if the bank does not agree with the points raised by the complainant. The ombudsman arranges a meeting of both the parties to the dispute. If at this stage, there is no compromise or settlement in sight, then the third stage is initiated

• In the third and last stage, the ombudsman gives a chance separately to both the complainant and the bank to put forth their claims before it. After examining the relevant facts, Banking Ombudsman passes an award to compensate for the loss suffered by the complainant in case the Bank is found guilty. The award needs to be passed within six months from the first hearing. A copy of the judgment passed by the banking ombudsman is given to both the complainant and the bank. Under such circumstances, the party aggrieved by such judgement has the discretion to file a review application before competent authority.

IMPORTANCE OF EVIDENCE

It is not always that the verdict of the ombudsman is in favour of the customers, but depends upon the merits of the case and substantiation of the grounds raised in the complaint. Thus, for instance, when a complainant could not prove the date of deposit of cheque with the bank, allegations regarding cheque lapse and returning the cheque without encashment against the bank cannot be sustained. The banking ombudsman may reject those complaints that are frivolous or prime facie devoid of merits. Further, the complaint can be rejected if the trail involves complicated issues to be adjudicated. In other situation, the decision of the banking ombudsman is final and binding on both the bank and the complainant. However, Banks also have the right to appeal against the decision of banking ombudsman before RBI, where RBI resolves the matter. The complainant is free to approach the courts at any time. Once the matter is referred to the court, the office of ombudsman will not have any power to adjudicate the dispute.

THE SPIRIT OF BANKING OMBUDSMAN

Banking Ombudsman gives the verdict not only in compliance of legal provisions, but also on humanitarian grounds considering justice to be given on equity.

In a note, RBI has asked all the commercial banks to implement the awards of the ombudsman as early as possible and place it before the customer service committee so that the deficiencies in the services of the banks do not recur in the future. The customer service committee should bring to the notice of the board of directors all those awards that have not been implemented for more than three months for remedial action. With the growth of financial sector and the economy, it is felt that Non-Banking Financial Companies (NBFC) should also be brought under the purview of banking ombudsman. With relation to inter-bank disputes, certain powers under arbitration and contracts law should be vested with the banking ombudsman. Thus, by widening the area and scope of complaints that the banking ombudsman can take on, customers would be greatly benefited by seeking Redressal to most of their complaints that are common while transacting with the banks.

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Advocate,

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Tuesday, 1 September 2015

VALUATION OF PROPERTIES – A BANKER’S VIEWPOINT

VALUATION OF PROPERTIES – A BANKER’S VIEWPOINT

Whenever a customer approaches a Bank seeking credit facilities from the Bank, invariably securities are insisted upon. Sometimes, loans are sanctioned on the value of moveable assets and advances are collaterally secured by equitable or simple mortgage of lands / buildings. Sometimes facilities extended by one Bank are taken over by another Banker, not only with respect to the old securities given by the clients but with respect of the assets generated out of Bank’s finance.

In essence, valuation of the properties is an important function in the day-to-day lending business of the Banks. Even to protect the assets charged to the Bank or funded by the Bank, insurance policies have to be taken and for that purpose also valuation is needed.

Usually, the value of a property depends upon the materials of which it is made up of, the age of the property, the geographic location, the surrounding developments, the neighbourhood, etc. One important factor which contributes to the value of a property is the clarity of title of its owner and the encumbrances riding on it.

Some people have a conception that a valuer need only to take care of the material and location aspect and it is not his purview to look into the title aspect of it. But the conception is not correct as the title to the property has a bearing on its valuation. A property infested with long-drawn litigations or various claims will not in reality, fetch the value it would have otherwise got with a clear title. Similarly, a property tenanted will not be able to command the same value if it is owner occupied, since the purchaser has to spend considerable amount of money and also time to get vacant possession of the property. Thus, possession of the property is as title to it while arriving at its value. Hence, while determining the value of a property, the valuer should keep in his mind the devolution of title, the actual possession of the property, various claimants over it such as minors or court orders adversely affecting possession and title to the property.

A valuer, while assessing a property, should ascertain the custody of the original title deeds to ascertain the possibility of equitable mortgages over the property. Discreet searches in the Sub-Registrar’s Office, Taluk/ Municipal Offices and the Offices of various Township / Development Authorities which have a bearing on the local administration of the property for ascertaining whether the property is built on any reserved area or prohibited area or the possibility of an acquisition by State Government – all these factors have a bearing on the valuation of the properties.

In one instance, when the valuation of the property was done by one Valuer for ‘X’ Bank, another valuer of the same Bank pointed out the same set of documents were deposited with another institution and the said institution has already put the same property for auction. Such things can happen when there are fabricated set of documents presented as security.

In another incident, it happened that apart from being multiplicity of Institutions claiming to have taken mortgage of the property, there happened to be multiple persons bearing the same name as Guarantor and when the Bank decided to take possession of the mortgaged property, they could not do so as the identity of the property and that of the owner of the property could not be tallied as the person supposed to have mortgaged the property denied even having gone to the Bank in question and lodged a police report.

Apart from such risks in identity of property and its holder, the valuer has to be more careful while submitting his report on valuation. Though it is necessary for the valuer to enquire about the genuineness of the owner of the property and the property in question, he should submit his report to the concerned authority, preferably in person or with sufficient care to avoid interpolations. In one instance, a Bank entrusted the valuation of secured property to its empanelled valuer but later it transpired that the actual valuation and the report on valuation available to the concerned authority varied very widely and foulplay was suspected.

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Advocate,