A. R. Gupta & Associates - Ahmedabad, Delhi, Mumbai

02/11/2013

SHORT SYNOPSIS ON AGREEMENT TO SELL AND SALE DEED IN INDIA

Agreement To Sell

All Agreements to Sell are bilateral contracts which come into existence when the seller agrees to sell his property to the purchaser for a lawful consideration subject to the terms of the agreement. However it must be noted that Agreement to Sell in itself does not create any interest in or charge on such property except by the ex*****on of a sale deed. The time limit to complete the transaction can be given in the agreement to sell. This is known as “Time being essence of contract”. Moreover if vendor refuses to perform the agreement to sell, the vendee can always file suit for specific performance.

Possession Under Agreement To Sell
• It is well established principle of law that a person in possession of a property by virtue of an agreement to sell does not get title to the property unless sale deed is executed.

Essential Conditions for the Sale of Immovable Property
• Both parties must be competent to contract
• Intention to transfer
• transfer of all rights and interest possessed by vendor to vendee
• acceptance of vendee
• vendor cannot retain any right or interest in the property
• transfer for lawful consideration paid or promised to be paid

SALE DEED

• The sale deed must explicitly convey that the title of the property has been transferred absolutely for lawful consideration and that the vendee is put in possession of the property.
• Registration of Sale Deed is mandatory for transferring all rights in the property. Non registered sale deed does not transfer the right in property to the buyer.
• Further registration helps in avoidance of creation of any new title other than that possessed by the vendor.
• During the time period between the date of ex*****on of the sale deed and completion of its registration the vendee cannot act as the owner of the property and the vendor is liable to protect the tile and possession of the property in question.
• Once a sale deed is executed the vendor/vendee cannot deny the facts or admissions contained therein. Unless the same is made due to (a) misconception of law (b) mistake of facts (c) fraud (d) duress (e) coercion (f) pressure.
• On ex*****on of a registered sale deed, the vendor cannot on his own cancel the same and execute another sale deed in favour of any third party with respect to the same property.
• Payment of consideration is not a condition precedent for transfer of property. However if the same is not made as per the terms of the deed then the vendor can initiate recovery proceedings as per law.
• Unregistered sale deeds shall not affect the property and neither shall confer any powers nor shall be admissible as evidence. Unless received for collateral purposes.
• If incorrect boundaries are shown in a sale deed, then same maybe rectified.
• Miss-description of property is rectifiable.
• A sale deed is a contract and can be cancelled under the Specific Relief Act on grounds of being voidable, terminable or unlawful.
• A registered sale deed can be cancelled by a court of competent jurisdiction.
• Registered instrument cannot be cancelled by mutual agreement between the parties.
• Section 31 of The Transfer of Property Act lays down that a property may be transferred with a legally valid condition that the interest created by way of the deed shall cease to exist in case of the occurrence or non-occurrence of a particular event.

Transfer of Immovable Property

An immovable property may be transferred by way of –
• Sale
• Mortgage
• Lease
• Exchange, and
• Gift

All immovable properties can be transferred only by way of registered instruments. A Sale Deed or Deed of Sale is an instrument by which a property is legally and equitably transferred to the purchaser.

Transfer Of Property To Defraud/Delay Creditors

Section 53 of The Transfer of Property Act lays down that where a property is transferred with the intention to delay or defraud the creditors then such transfer can is voidable at the hand of the party so defrauded or delayed. Subject to the proof of such intention from the facts of the case.

Further a seller can pass on to a purchaser by virtue of a registered sale deed no other and further rights in the property than what he himself possessed.

Bonafide Purchaser

A bonafide purchaser is a person who purchases a property believing it to be free of all charges of which he has no notice whether actual or constructive.

A person is said to have notice of a fact if he actually knows a fact or when he due to gross negligence or wilful neglect of enquiry that he ought to have made in the ordinary course abstains from discovering a fact.

Further documents required to be compulsorily registered under The Transfer of Property Act but not under sec 17 of The Registration Act fall within the scope of sec 49 of The Registration Act. Such unregistered documents cannot be admitted as evidence.

As per sec 13 and 20 of The Transfer of Property Act an interest in a property is permitted to be transferred in favour of an unborn person.

02/11/2013

SHORT SYNOPSIS ON TITLE OF PROPERTY

Meaning of Title of immovable property

In simple language, title means right in property. The word title does not necessarily always mean ownership. Title can mean right over property as owner, possessor, permanent lessee etc.
One of most important things that have to be borne in mind while buying any property is to verify and inspect whether the title with regards to the said property is clear and marketable i.e. free from all encumbrances. It is thus advisable to get the required search of the property and title clearance done by a competent lawyer before buying any property. Generally revenue records are searched for 30 years upwards.

Broad Check-list for carrying out the due diligence with respect to title
• To check the classification of property from the Govt. records along with copy of site plan, survey no., layout, sanctioned plan etc. identifying the property against the adjoining land. The documents should be certified by the officer of the Land Records.

• To check whether the land is to be used for agricultural purposes or can be used for industrial, commercial or residential purposes. In case of change of land use, the permission given by the competent Govt. authority and the fee paid for conversion should be checked.

• To ensure that the land is not subject to land acquisition proceedings by verifying the records in the Office of Tahsildar and by seeing the notifications issued by the land acquisition authorities.

• To check chain of title deeds, with stamped receipts/lease deed/gift deed through which the property has been transferred/acquired by the present owner.

• To ensure that the provisions contained in the title deed do not restrict the right of the owner to transfer the property.

• If the property is in joint names, then NOC should be obtained from the co-owner(s).

• In case the property is held by HUF or is an ancestral property, to check the family tree and to verify death certificate of original owner, copy of will, succession certificate, probate obtained from Court, legal heirship certificate in original, registered copy of the partition deed/ gift deed/settlement deed, as the case may be.

• In case the property belongs to partnership firm, society or trust, to check the copy of the partnership deed/trust deed.

• In case the property is being sold by the Official Liquidator, the Court order authorizing the Official Liquidator to sell the land/property should be verified.

• In case the property belongs to a company, then check the Memorandum & Articles of Association, Resolution passed by the Board of Directors/Shareholders ( as applicable) under section 293(1)(a) of the Companies Act, 1956 authorising the sale of the property. Inspection should also be done at the office of the Registrar of Companies (where the registered office of the Company is situated ) to ensure that the property has not been mortgaged/charge created under the Companies Act, 1956 in favour of any Financial Institution/Bank/Debenture Trustee through filing of Form No. 8/10.

• To check the occupation certificate and also the environmental clearance issued by the competent authority.

• In some cases, the seller may not be physically present to sell the property and might appoint an agent with the power to sell. In such cases it is necessary to check the Power of Attorney to see if the principal who has executed the power is the owner of the property. The Power of Attorney must bear the photograph of the principal and it should be registered in the office of the Sub-Registrar.

• In case the owner is a NRI and the Power of Attorney (POA) has been executed in a foreign country, the POA should be notarized before the Indian Consulate for the purpose of authentication and thereafter it is to be attested by the Sub-Registrar of the area concerned In order to safeguard against the subsequent third party claims, it is advisable to give a public notice by way of advertisement inviting objections, if any, before the purchase of property. The above check list is only illustrative and not exhaustive since some more areas may need to be looked into depending upon the nature of the transaction.

Title Investigation In Property In A Residential In/Or Commercial Complex

The following points should be kept in mind –
• Scrutiny of legally established title, all related documents and the title of the owner of the land and its sources for atleast the past 40 years.
• Nature of agreement with the seller.
• Examining the apartment sanction plan by the Municipal Authorities with regards to permitted area etc.
• Whether all persons having an interest in the property are a party to the documents
• The rights of both the owner and builder of the property.
• Total area of the flat.
• Common area and other facilities.
• Parking lots.
• Payment of charges such as electricity, taxes, water etc.

28/10/2013

MARRIAGES UNDER THE SPECIAL MARRIAGE ACT, 1954

1. Introduction:

The Special Marriage Act allows and provides for legal and binding marriages between people of different religions without having to change their religion. The Parliament of India enacted The Special Marriage Act, 1954 with an aim to provide a special form of marriage for the people of India and all Indian nationals in foreign countries, irrespective of the religion or faith followed by either party. Primarily speaking, the Special Marriage Act has three main objectives:

• To provide a special form of marriage,
• To provide for registration of certain marriages and,
• To provide for divorce.

2. Applicability:

The Special Marriage Act is applicable uniformly to everybody without giving any importance to their religion. Broadly, the said Act applies to the following:
• Any person, irrespective of religion.
• Hindus, Buddhists, Jains, Sikhs can also perform marriage under the Special Marriage Act, 1954.
• People of the Muslim, Christian, Parsi or Jewish religions can also perform marriage under the Special Marriage Act, 1954.
• Inter-caste marriages are performed under this Act.
• Marriage between an Indian National and a Foreigner can also be solemnized under this Act.

3. Procedure for Marriage:

• The marriage performed under the Special Marriage Act, 1954 is a civil contract and accordingly, there need be no rites or ceremonial requirements.
• Certain papers must be filed with the marriage registrar, including affidavits (in a prescribed form) by each party that they are single, and certifications from the local police station for each party that they have been resident of that area for at least 30 days
• The parties have to file a Notice of Intended Marriage in the specified form to the Marriage Registrar of the district in which at least one of the parties to the marriage has resided for a period of not less than thirty days immediately preceding the date on which such notice is given.
• After the expiration of thirty days from the date on which notice of an intended marriage has been published, the marriage may be solemnized, unless it has been objected to by any person.
• The marriage may be solemnized at the specified Marriage Office.
• Marriage is not binding on the parties unless each party states "I, (A), take thee (B), to be my lawful wife (or husband)," in the presence of the Marriage Officer and three witnesses.

4. Conditions for Marriage:

Just like the Hindu Marriage Act, 1955 this Act also specifies certain conditions which are required to be fulfilled in order to ensure that the marriage is legal and binding. Such conditions include the following:
• Each party involved should have no other subsisting valid marriage.
• The Male must be at least 21 years old and the Female must be at least 18 years old.
• The parties should be competent in regards to their mental capacity to the extent that they are able to give valid consent for the marriage.
• The parties should not fall within the degree of prohibited relationship.


5. Conflict between Hindu Marriage Act, 1955 and The Special Marriage Act, 1954:

• One of the conflicting provisions in the said Acts which has been highlighted by various courts is that under the Special Marriage Act, 1954, a marriage solemnized was void if either of the parties to the marriage had not attained the requisite age, but such a marriage solemnized under the Hindu Marriage Act would not be void (though punishable under the Child Marriage Restraint Act).

6. Divorce:

Under sec. 27 and 28 of the Act, the provisions of divorce and obtaining a divorce by mutual consent in respect of a marriage solemnized and/or registered under the Act are provided.
Contested Divorce - The circumstances under which a petition for divorce can filed have been given as follows:
That either of the husband or the wife -
• Has since the solemnization of the marriage committed adultery; or
• Has deserted the petitioner without cause for a period of at least three years immediately preceding the presentation of the petition; or
• Is undergoing a sentence of imprisonment for seven years or more for an offence as defined in the Indian Penal Code (Act XLV of 1860): or
• Has since the solemnization of the marriage treated the petitioner with cruelty; or
• Has been incurably of unsound mind for a continuous period of not less than three years immediately proceeding the presentation of the petition; or
• Has for a period of not less than three years immediately preceding the presentation of the petition been suffering from venereal disease in a communicable form, the disease not having been contracted from the petitioner; or
• Has been suffering from leprosy, the disease not having been contracted from the petitioner; or
• Has not been heard of as being alive for a period of seven years or more by those persons who would naturally have heard of the respondent if the respondent had been alive; or and by the wife on the ground that her husband has, since the solemnization of the marriage, been guilty of r**e, so**my or be******ty.
Divorce by Mutual Consent - In order to obtain a divorce by mutual consent, a petition for divorce by mutual consent may be presented to the District Court. A petition for divorce must be presented by both the parties and the following grounds must be included in the same:
• that they have been living separately for a period of one year or more,
• that they have not been able to live together, and
• That they have mutually agreed that the marriage should be dissolved.
• The petition may be presented only after one year from the date of entering the certificate of marriage in the Marriage Certificate Book. However, relaxation may be provided in cases where exceptional hardship is suffered by the petitioner or in cases of exceptional depravity on the part of the respondent.
• Between 6 months after, and within 18 months of, the date of presentation of the petition seeking divorce by mutual consent, both parties must make a motion together seeking grant of a decree of divorce.

7. Alimony and Maintenance:

• Alimony is provided for u/s 36 and 37 of the said act. Parties desirous of obtaining a divorce by mutual consent must keep in mind that the Act also contains provisions dealing with grant of alimony and maintenance, both permanent and during the pendency of the proceedings. In the cases of divorce by mutual consent, the parties may agree upon the terms relating to payment of alimony or maintenance and the same may be incorporated in the pleadings before the Court. In the contested forms of divorce, the Court takes into consideration various facts and circumstances of the case before deciding on the amount of alimony/maintenance.

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The Law firm primarily deals with commercial, corporate, property, Family Law, IPR & International Laws & specialized services to NRIs.

28/10/2013

MARRIAGES AMONGST HINDUS

1. Introduction:

i. The Parliament of India enacted the Hindu Marriage Act in 1955 in order to codify marriage law amongst Hindus. The Hindu Marriage Act provides rules and regulations for governing various aspects of marriage, separation, divorce, maintenance etc.

2. Applicability:

i. An important aspect of the applicability of the said Act is the fact that it applies to Hindus domiciled in the territories to which this Act extends who are outside the said territories, meaning thereby that in the event of a person marrying within India and subsequently going to a foreign country, the provisions of the Hindu Marriage Act, 1955 would continue to apply to the said person even though he might be outside India.

3. Conditions for Marriage:

i. According to section 5 of the Act, only a marriage between two Hindus is a valid marriage and further the marriage must be solemnized according to Hindu rituals which basically consist of saptapadi.

4. Void marriages:

A marriage may be declared void under the following conditions:
i. Either party is under age. The Male should be of 21 years of age and the Female of 18 years.
ii. Either party is not of Hindu religion.
iii. Either party is already married. Polygamy is expressly prohibited by the Hindu Marriage Act, 1955. A marriage can only be solemnized if neither party has a living husband/wife at the time of marriage.
iv. The parties are sapindas or within the degree of prohibited relationship.

5. Voidable marriages:

A marriage may later be declared voidable under the following conditions:
i. Either party is impotent, unable to consummate the marriage, or otherwise unfit for the reproduction of children.
ii. Both parties must be of sound mind and capable of understanding the implications of marriage. If either party suffers from a mental disorder, insanity or epilepsy, then that may indicate that consent for marriage was not given. Similarly, if such consent was forced or obtained fraudulently, then the marriage may be voidable.
iii. The wife was pregnant by another man other than the husband at the time of the marriage.

6. Ceremonies:

i. Section 7 of the Hindu Marriage Act provides that there may be different, but equally valid ceremonies and customs of marriage. A Hindu marriage may be solemnized in accordance with the customary rituals and ceremonies of either the husband or the wife.
Example of such rituals/ceremonies is Saptapadi (i.e. taking seven steps behind the husband).

7. Registration of Marriage:

The following conditions have to be fulfilled in order to get a marriage registered:
i. A ceremony of marriage has to be performed and the parties have to be living together as husband and wife.
ii. The parties must have been residing within the district of the Marriage Officer for a period of not less than thirty days immediately preceding the date on which the application is made for such registration.
iii. Section 8 of the Hindu Marriage Act allows a state government to make rules for the registration of Hindu marriages particular to that state.
iv. Registration is a form of a written evidence of marriage. As such, the Hindu Marriage Register is open for inspection at all reasonable times (allowing anyone to obtain proof of marriage) and is also admissible as evidence in court of law.

8. Divorce:

i. A petition for divorce usually can only be filed one year after registration. However, in certain cases of suffering or mental instability, a court may allow a petition to be presented before one year.

ii. Restitution of Conjugal Rights:
• Restitution of Conjugal Rights literally means the right to stay together. If either the husband or the wife, without reasonable excuses, withdraws from the society of the other, the aggrieved party may approach the Court for restitution of conjugal rights.

• The decree of restitution of conjugal rights cannot be executed by forcing the party who has withdrawn from the society from the other to stay with the person who institutes Petition for restitution. However, if the decree of restitution of conjugal right is not honored for a period of more than one year, subsequent to the date of the decree, it becomes a ground for divorce.

iii. The following are the grounds on which divorce may be sought:

• Adultery – either party has had voluntary sexual in*******se with a man or a woman other than the spouse after the marriage.
• Cruelty – either party has physically or mentally abused the other.
• Desertion – either party has deserted the other for a continuous period of not less than two years.
• Conversion to another religion – either party has ceased to be a Hindu and has adopted another religion.
• Unsound mind – either party has been diagnosed as being unsound of mind to such an extent that normal married life is not possible.
• Disease – either party been diagnosed with an incurable form of leprosy or has venereal disease in a communicable form.
• Presumption of death – either party has not been seen alive for seven years or more.
• No resumption of cohabitation after a decree of judicial separation for a period of at least one year.
• The husband, after marriage, has been found guilty of r**e, so**my or be******ty.
• Co-habitation has not been resumed within a year after an order for maintenance under Section 125 of the Criminal Procedure Code or alternatively, under the Hindu Adoptions & Maintenance Act 1956.
• The wife was under-age when she married and she renounces the marriage before attaining the age of 18 years.
• Moreover, with the modernization of the world, Marriages can now also be dissolved through video conference and even statements can be recorded through means of the same.
• Divorce by Mutual Consent.
Section 13-B of the Hindu Marriage Act provides for the couple seeking divorce through mutual consent to wait for a period of six months after making first joint application for divorce.
• Alimony.
At the time of the decree of divorce or at any subsequent time, the court may decide that one party should pay to the other an amount for maintenance and support (alimony). This could be a one-time final settlement, or a periodical (such as monthly) payment. The amount to be paid is at the discretion of the court.

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The Law firm primarily deals with commercial, corporate, property, Family Law, IPR & International Laws & specialized services to NRIs.

22/10/2013

SYNOPSIS ON INHERITANCE LAWS IN INDIA

• Introduction.

1. The Constitution of India provides freedom of following a religion of your choice as a fundamental right. Family law has always been a part of religious law which in itself holds prime importance in India. Since laws of marriage and succession are the most intricate amongst the religious laws, inheritance issues in India are very complicated.

2. Different religious groups in India subscribe to different laws. Hindus have their own codified law (Hindu Succession Act) as well as a part uncodified law, Muslims have their own textual law of inheritance (Islamic Law on Succession), Parsees come under the Indian Succession Act, as do Christians.

3. Similarly, when it comes to the laws and rights of inheritance, the applicable law of inheritance depends on the personal law of the deceased. This law may be the textual law of the deceased’s religion, or the codified law of the nation to which the deceased belonged to at the time of death.

4. If a foreign citizen inherits from a deceased Indian citizen, then the law prescribed for the appropriate Indian religious group applies.

• Reservation of Inheritance.

Except for the Muslim laws of inheritance, which require at least 2/3 of the deceased’s property to be inherited by the line of succession and allow up to 1/3 to be settled by testamentary succession, India’s other inheritance laws do not have any reserved portion, i.e. the entire property may be subject to testamentary succession or intestate succession if there is no will.

• Testamentary Inheritance.

The Laws, Procedures and Rules regarding the administration of testamentary succession are stipulated in The Indian Succession Act. Procedures are laid down for administering the testamentary succession of all religious groups, except Muslims. Muslims can make a testamentary succession under their own religious law but, a Muslim cannot transfer more than 1/3 of their property by testamentary succession.

• Will & Probate.

1. A will is a normal and commonly used course of succession. The Indian Succession Act provides for every person of sound mind, not being a minor, to dispose of his/her property by will. It is mandatory that the testator possesses the capacity to make such a will.

2. A foreigner who owns immovable property in India should preferably make a will, because intestate succession can take a long time for settlement. A local will made in India can be granted probate comparatively easily. The foreign owner of immovable property in India however, is not required to make will in India. A will made outside India is also valid.

3. A will must be in writing, signed by the testator (or by someone at the discretion of and in the presence of the testator). The will must be attested by two or more witnesses.

4. A will need not be in legal language, and it is not necessary to use technical terms. At the time of interpretation of the will, regard must be taken, not only to the actual words used, but also to the evident intention of the testator. It is therefore essential that the testator makes very clear his/her intention to dispose of property in a will.

5. Probate may be granted by a District Court where a Will has been executed. Probate is essentially a certificate granted by the District Court in terms of the Will. Shortly speaking, the Probate letter certifies the genuineness of the Will which is required to be followed in law.

6. There is little restriction on the gifts of any property during the lifetime of the owner. Owners have full power of disposing of their own property in India through gifts. Such gifts however may be challenged in the court of law on certain grounds such as the disqualification of the donor due to mental instability.

• Sequence of Intestate Succession.

1. Male Hindu: If the deceased is a Hindu male (including Buddhists, Sikh, Jain, and all those who are not Christian, Muslim or Parsi), Class I heirs of a male Hindu who shall simultaneously inherit are-
• Mother being alive (1 share)
• Widow (1 share)
• Living sons (1 share each)
• Living daughters (1 share each)
• Predeceased son having the following relations (1 share)
• widow
• sons
• daughters – each to be equally divided.

In case there is none in the class I schedule, the property shall go to the class II based order. The subsequent order shall be followed only when the prior order has none left to inherit.

Order I: Father (whole in the absence of anybody in class I)

Order II: Son’s daughter’s son; son’s daughter’s daughter, Brother, Sister ( all in equal proportion)

Order III: Daughter’s son’s son, daughter’s son’s daughter, daughter’s daughter’s son, daughter’s daughter’s daughter (equally)

Order IV: Brother’s son, brother’s daughter, sister’s son and sister’s daughter

Order V: Father’s father, Father’s mother (equally)

Order VI: Father’s widow, brother’s widow

Order VII: Father’s brother, Father’s sister

Order VIII: Mother’s father, mother’s mother

Order IX: Mother’s brother, mother’s sister

Female Hindu: If the deceased is a female Hindu dying intestate-
Entry A: Sons (1 share each), Daughters (1 share each), husband (1 share), son and daughter of predeceased son (equally together 1 share), son and daughter of predeceased daughter (equally together I share).

Entry B: Heirs of Husband:

Entry C: Father and Mother

Entry D: Father’s heir

Entry E: Heir’s of the mother

2. Muslim: If the deceased is a Muslim-
The share of each heir must be ascertained based on individual cases. The following are four classes of heirs and successors, with provision of exclusion:

• Sharers are those who are entitled to a prescribed share of inheritance. They are heirs by consanguinity and collaterals. Consanguineous heirs are (a) agnets, like father, true grandfather, mother, and true grandmother; (b) descendants, like daughter, son’s daughter and (c) collaterals, like full sister, consanguine sister, uterine brother and uterine sister. Collateral heirs are heirs by affinity, like husband and wife.

• Residuaries are those who are not entitled to a prescribed share, but are entitled to take the residue after the sharers take their prescribed shares. Children of the deceased or of the son of the deceased and the father of the deceased are residuaries.

• Distant kindred are all blood relations not being sharers or residuaries. If there are no sharers or residuaries other than husband or wife the balance shall be given to distant kindred.

• Unrelated successors are those who are acknowledged kinsman, universal legatee and government by escheat. In the absence of relations, the acknowledged kinsman shall succeed.

3. Christian: If the deceased is a Christian or married under the Special Marriage Act (for inter-religious marriage)-

Where lineal descendant is present:
• Widow / widower – 1/3 of the property
• Lineal descendants – equally to share 2/3.
• In the absence of lineal descendant, to all grand children, - equally
• In the absence of grandchildren, to great grant children – equally
• Lineal descendant of a predeceased child or lineal descendant of a predeceased child of a predeceased child if present - division is based on equal shares, taking the predeceased child to be alive, and a downward distribution amongst the lineal descendants.

With no lineal descendant:
• Widow /widower – 1/3
• Father – balance entire
• If Father is dead, to mother, sisters and brothers- equally.

4. Parsi: If the deceased is a Parsi-

• Widow / Widower
• Children (equally)
• Living parents-each to get a share equal to half of a child
• Wife and children of a predeceased son to share the share of the child as if the son died after the death of the deceased. If the child predeceased is a daughter, her share would be equally distributed to her children.

• Succession and Marriage.

According to the Indian Succession Act, the wife acquires the domicile of her husband, but no person, by marriage, acquires an interest in the property of his/her spouse. If a person whose domicile is not in India marries in India a person domiciled in India, neither party acquires by marriage any rights in respect of the property of the other spouse, other than those agreed in a pre-marital settlement. Therefore, unless the law to which the deceased subscribed to at the time of his/her death disinherits anyone on grounds of religious conversion, or marrying in a different religion, then there is no discrimination. In Hindu law, the husband’s property also belongs to the wife but not vice versa.