Friday, 31 October 2014


Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore    

Works Contract is most questioned and often litigated issue within the Court of Law, and conjointly between the client of the flat and promoter. the choice of the Hon’ble Supreme Court in Gannon Dunkerleys case stating that the expression “Sale of products as utilized in Seventh Schedule of Constitution has an equivalent which means as in Sale of products Act created the law commission in its sixty 1st report back to advocate to amend the Constitution of India - consequently forty sixth modification was passed in 1982.  This authorized the states to pass laws to levy tax on transfer of property. the products concerned in execution of works contract is also within the kind of goods or in the other type. Article 269 of the Constitution provides for levy of tax on sale or purchase of products apart from news paper. Just in case of interstate trade and commerce, the tax is to be levied by Government of india, however assigned  to the states within which tax is leviable. 
Article 286 of the Indian Constitution works as restraint on the authority of an equivalent.

Work contract

One should distinguish the distinction between contract of sale of products and contract of labor. The distinction is extremely skinny. Its terms of the contract and nature of the requirement to be discharged, that distinguishes works contract from contract purchasable.

In case of sale of products, product area unit delivered as they're to the client, whereas just in case of works contract, the products area unit delivered in an exceedingly changed type. this could be explained within the purchase of readymade house, that is sale of products and contract to construct a house, that may be a works contract. In purchase of readymade house, the home is delivered because it is, whereas just in case of contract for construction, the home is made victimisation numerous materials and delivered to the client. This can be well explained just in case HAL Vs State of province (1984) fifty five STC 314.

In another case HAL Vs State of orissa,Hon’ble Supreme Court has determined that in contract of works there's someone acting or rendering service on property, wherever as just in case of sale of property there's individual existence of the property as an entire, that is being delivered to the client.

Types of Contracts

There is no well established formula by that contract purchasable and contract of labor is distinguished.Any contract that contains not solely the work however conjointly needs product to be used is also of the subsequent 3 types;

Contract may be for works to be in hot water remuneration and also for provide of products in execution of labor. this can be a composite contract.It is also contract of labor within which use of materials is related to the execution of the work. this can be contract for work and labour not involving sale of products.

It is also contract for provide of products wherever some work is needed as related to sale. this can be strictly a contract of labor.

Agreements, wherever in land and buildings are sent to the potential client and correct stamp tax is paid on such conveyance are transfer of stabile property and aren't vulnerable to tax below sale tax laws.

Agreement with Builder

However we tend to shall examine cases, wherever developer executes General Power of professional in favour of builders for valuable thought such contracts is also any of the subsequent types;

Power of professional for valuable thought.

For valuable thought partially and partially by manner of made property.

Hon’ble Supreme Court in Raheja Development Corporation Vs State of province (Appeal [Civil]) 2766 of 2000 5/5/2000 determined that “the definition of works contract below province nuisance tax is extremely wide and not restricted to works contract, it conjointly includes “any agreement for finishing up either for money or for credit or for any valuable thought, the building and construction of any movable or stabile property.

Land being stabile property isn't to blame for payment of nuisance tax. However once associatey construction takes toward land through a freelance contractor on behalf of the builder, contractor execution the work is vulnerable to pay works contract tax.

Dual Role of Developer

We can also visualise a scenario wherever a builder himself acts as contractor.In such scenario the nuisance tax department considers the builder in twin capability as contractor and as owner/builder.The department is subjecting the builder to nuisance tax.The relevant case is Mittal investments corporation Vs. State of province that was determined by Hon’ble tribunal of province. it absolutely was control as follows;

If the building was 1st made and thenceforth in agreement to be sold-out, then it absolutely was an acquisition of stabile property that no nuisance tax is attracted.

According to the agreement, some advance has been taken at the time of execution agreement and also the balance quantity to be paid in fifteen instalments

It has not been established that at the time of agreement, whether or not construction has started by the builder.

The client should purchase the land from the client and not from the builder.

It isn't clear whether or not plans were approved, before theexecution of agreement.

It was control that there's transfer of property in product and to blame for tax.  On review petition it absolutely was control, the builder wouldn't be vulnerable to pay nuisance tax below section 5B in respect of buildings that are completed before getting in associate agreement and conjointly in respect of agreements that are entered when the development of the building was started.However, this was overruled by Hon’ble Supreme Court just in case of K. Raheja Development Corporation Vs. State of province.


The question whether or not a selected contract is purchasable of products or contract for work or labour is extremely tough to work out. The distinctions and terms such by numerous courts aren't complete. They primarily linger over one or 2 points that have are available the cases, that are rigid and might be created applicable to all or any cases. The deciding issue would be the contents of contract, the circumstances of the group action of the prevailing custom of the trade.The levy of the works contract tax is on the materials utilized in execution of explicit contract, the property that is ultimately transferred.

Karnataka sales tax Act

The provisions regarding works contract below province nuisance tax Act were inserted with impact from 01.08.1985 however got impact from 1986.Section 2(29)(b) of KVAT Act traumatize the Works Contract, that refers to the property in product concerned in execution of works contract for money or credit. Section 2(37) defines “Works Contract” as works contract includes any agreement for finishing up for money, credit or different valuable thought, the building, construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement modification, repair, or commission of any movable or stabile property.

The contractor should embody the nuisance tax within the quotation itself, in order that he will collect it from the principle and pay same to the Department, if not he should pay the nuisance tax on his own profit. The developer should embody this clause within the agreement to sell and collect the tax from the client of flat and remit an equivalent to the business Tax Department.


Thursday, 30 October 2014


Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore
Although all the modern households use preparation gas inside the space, it would be a offer of danger, if there is a gas leak. Inspire of all our precautions, accidents may happen. This danger is averted by utilizing a tool noted as a gas leak detected by this device.

Smoke detectors and hearth alarms are useful in fixing of us, once a fire breaks out. Glass break detectors assist in police investigation AN unwanted person by sensing the noise that's created by breaking of glass. Once AN unsuspecting intruder walks through the passive infrared rays utilised within the motion detectors, it catches him/her by setting off AN alarm.

Video door phones are presently well trendy, as they assist you to check the one that's outside the door before gap it. The age previous methodology of putting in place a criminal alarm is commonly wise. Common sense plays a vital 0.5 in soothing security, with or whereas not these gadgets. Here, are some tips on exploitation this faculty inside the highest manner to make sure simply just and your Home, every area safe.

The exterior door should not ever be left unattended, even once you're inside the House. Don’t build the error of concealment a House key outside the House thus on get your hands on it, if you forget your keys. Once exploit Home, you want to not leave any message on the device language simply just are exploit Home and once you're attending to be back.

Use pin tumbler locks for your doors. Avoid growing a tall hedge around your Home. It’s attending to supply privacy, but it together provides a convenient place for a cook to hide in. guarantee sensible lighting for the surface which may merely reveal the presence of intruders. Whenever, you allow the space make sure to alter off the gas. Never leave burning candles or agarabathis unattended.

It is a tragic reminder of the State of our World that crime rates are raising. Nothing is prepared to approach to the ingenuity of latest criminals who would like to interrupt in. fortunately, modern investigation gadgets are turning into lots of advanced and if we tend to tend to exercise our logic, it's going to facilitate us at the facet of those security systems to beat the crooks at their own game.


Wednesday, 29 October 2014


Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore

Generally, it's really powerful to construct a house whereas not availing housing loan. There are varied Housing finance establishments (HFIs) viz. Banks and Housing Finance firms which supply housing loans ranging from few thousands to variant rupees.Inspite of existence of various agencies that provide for housing loans, availing such loans won't be an easy task since there are heap of instances where such loan receiver are rejected out with reason thanks to varied reasons. 

When associate application for the house loan is rejected, it's quite natural for the human to induce unsuccessful and at constant time wonders what went wrong for the rebuff. There’s conjointly a massive communication draw back at that juncture and conjointly the human might never get to know relating to the precise reason for the rejection of the appliance or he might get associate evasive response. The Bank Official UN agency deals with the receiver will play a major role and enlighten the receiver relating to the procedure rather than keeping the human at intervals the dark. 

Types of Housing Finance/Loans
There are different types of Housing finance/loans getable for the assorted categories that are listed below.
1. Purchase of land–Loan is given for purchase of site. Most of the Bankers do not entertain sanction of such loans since scheming risk may be a heap of in such loans.
2. Created homes or Flats–Loan is sanctioned for the aim of purchase of a house that's already created and getable as readymade. Constant is availed for the acquisition of flats too.
3. Construction Loan –As the name itself suggests, loan is availed for construction of a building on the entire property.
4. Composite Loan–This implies that loan is availed every for obtaining an online web site and constructing a house.
5. Take over Loan–This means taking loan from one banks to a special Bank, therefore on clear the dues of the other bank. 

For each of the on high of aforementioned loans, margin money will disagree and together positive restrictions are aiming to be obligatory by the Banks before the loan is sanctioned. for instance, once somebody avails the composite loan, he need to construct the house within the stipulated quantity, which might vary from twelve to twenty four months as per the terms in agreement. There are many cases where the human And a builder enter into an agreement for availing housing loan, that's required for the builder to start out the project and later vanishes with the unutilized loan amount once the large chunk of principal amount is received by the builder, deed the human at intervals the lurch and making him to face the results. It’s even handed for the human to want necessary precaution before applying for the loan and utilizing it properly. However, this sort of drawback is avoided if the human approaches purported and established Builders.

Regular gain of the human  
The first and foremost criteria of the Banks before sanctioning or even diverting the applying is relating to the steady monthly gain of the human. If the human might be a salaried man, either serving during a very Government organization or personal company, the first hurdle is cleared. Then the Banks will enquire relating to different aspects love it returns being filed by the human for the past a pair of or three years, Bank Statements for the last 6-12 months and different relevant documents to ascertain cash standing and banking transactions. Further, Bank cash statements will reveal outstanding loans and compensation details, bounced cheque details, regular credit of monetary gain, any subsisting encumbrance and if such statements square measure satisfactory to the Bank, then it is the primary spherical of end for the human. 

Margin money
Usually, Banks provide the loan to associate extent of eighty fifth of the whole enumerable amount of the plot or property or flats. The remaining fifteen August 1945 has to be organized by the human and conjointly the loan square measure aiming to be sanctioned by the bank alone once giving satisfactory proof regarding his capability of mobilizing that fifteen August 1945 of the balance amount. 

Credit Rating
Loan are aiming to be sanctioned on the concept of the present pay and alone 5 hundredth of the pay amount are aiming to be thought of for the loan compensation purpose by the Bankers. for example, if the human is getting Rs. 10,000 PM bring home pay, loan are aiming to be sanctioned taking into thought his pay standing, 5 hundredth of the pay are aiming to be taken for compensation of the projected loan and conjointly the remaining Rs.5,000/-will be thought of as a result of the number for his expenses. Withal somebody is getting Rs.25, 000PM as gross but Rs.10, 000 as bring home pay, he might get the loan amount considering his bring home pay and not his gross. Except this, different factors a bit like the applicant’s antecedents are also altogether checked before sanctioning of the loan, whereby the Bank will verify the whole vary of dependents of the human to ascertain his compensation capability. If the dependents are plenty of, the loan amount sanctioned are aiming to be clearly less. 

Each Bank has its own prescribed criteria referring to monthly gain of the candidates supported that the loan is sanctioned. There’s together a necessity of a Guarantor’s signature in some cases. Candidates UN agency agency do not have a collection gain are not amused by a majority of Banks.

Age Factor
Generally availing loan place along by all the co-owners will increase the borrowing capability. Further, the age of all the co-owners need to neither be however the lower limit nor exceed the upper limit. However, ordinance will vary from one Bank to a special. It’s going to together have an impact on the tenure of the house loan any as EMI’s. Variety of the Banks might persevere with seventy years as a result of the upper ordinance for the co-applicant. If the human is thirty 5 years and conjointly the co-applicant is sixty years, then the loan are aiming to be sanctioned for a most quantity of 10 years (70-60 = 10 years). In different cases, the applicant’s retirement age is to boot taken into thought. If the human is fifty four years previous and would be retiring by sixty, then the utmost loan tenure would six years alone. 

Property age
It is a illustrious indisputable fact that the age of the property is critical simply just in case of a commerce. In many cases, loans are sanctioned on commerce properties if such properties are aged but fifty years. If the human intents to buy for properties set at intervals the areas that are black listed by the Banks for various reasons, then such application are aiming to be rejected, notwithstanding applicant’s cash standing.The aforementioned property need to be within the geographical limits as made public by Banks for the sanctioning of the loan. variety of the multi-national banks have their own set of rules and normally do not entertain the loan applications of TV and different artists, police, journalists, politicians, advocates et al. 

Legal Aspects
All aforementioned and done, predominate importance need to be to the legal aspects. The title of the property need to be clear altogether aspects right from the origin, flow and conjointly the gift standing. If the title is not clear, the appliance will not be amused and it's aiming to be rejected. The Banks will not sanction the loan withal the opinion is clear but the supporting original documents are  missing since its aiming to conclude that the property is either burdened elsewhere or having another problems. The actual worth and conjointly the proportion of deviation of the property are going to be taken into thought before the sanction of the loan. 

Thus, there are not many hassles to induce a loan from the Banks of your different provided all the pre-requisites are fulfilled by the human. Some years past, somebody would have ventured to construct a house once 45-50 years duly saving the specified amount to construct a house. But presently thanks to the accessibility and accessibility of easy loans from Banks, children between the cohort of 25-35 are either constructing new homes or shopping for AN living accommodations that's therefore a good sign. 

Though the switch-over to a liberalized disposal regime has brought in competition and efficiencies at intervals the housing finance market, factors a bit like the power to cater to the larger segments of the population, furthermore as those in rural areas remains a challenge. These segments square measure outside/below the bracket and conjointly the industrial enterprise blessings are not any concessions for them. The Bankers expect higher equity from the applicant’s side for sanctioning the loan.

Advocate Selvakumar

Tuesday, 28 October 2014


Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore

Every person would need to have a house, whether or not spacious or little house in line with their financial standing. Someone wishes to have a house since it's not solely a concrete structure however conjointly involves a part of emotional bonding towards constant.
Nevertheless, it's not easy to either obtain a brand new house/apartment or to construct on the plot. If a want of a person is to shop for an apartment, then it's necessary to spot the correct location and a reputed builder and if the will is to construct a house, then a reliable and right person, is extremely necessary.  

Selection of a location
Before feat any property, additional impetus ought to be on the location since it plays a preponderating role in most aspects of the important estate. However, the method of distinguishing the placement for owning any property depends upon the aim that such person intends to invest, that may be either for residential or commercial, since the priorities differs in line with the aim that  the property is meant to be purchased.

The following are a number of the rules needed to be thought of whereas choosing the desirable location are mentioned below:
1.The first and foremost factor that ought to be kept in mind at the time of identifying the property is that the property meant to be purchased mustn't be settled inside the vicinity of city district or  place of worship or in shut proximity to a voidance line. It’s higher if the location is inhabited with people having numerous cultures with cosmopolitan outlook and free from anti-social components and anti-social activities. 
2.If the person needs to have a house or a flat for his own occupation, it's advisable to like a strictly residential area than a commercial one.
3.It is invariably appreciated to choose purchase of an apartment designed on a Layout approved by the competent authority, since it might guarantee higher amenities to such occupants.
4.It is conjointly vital that such layout ought to conjointly comprise of well-laid roads with smart sewerage system, alongside regular garbage clearance.
5.It is advisable  to avoid owning a house within the low-lying areas since such property usually runs below the chance of inundation of water throughout serious monsoon.
6.Care ought to even be taken to confirm that the placement isn't terribly off from the work place, Market place, educational establishments, hospitals, Bus stand, train station or different basic and vital destinations.
7.Apart from the on top of, it's conjointly necessary banking facility, ATM’s, public conveyance, public phone booths, web Centers et al are not terribly off from the property. Last, however not the smallest amount that the placement should even be free any kind of pollution or congestion.
8.Needless to mention, the area ought to have smart and regular offer of water, power and just in case of bore-wells, then smart spring water table is additionally necessary.
9.To ensure smart sleep and fewer pollution, decide a vicinity, that is free from any industrial plant or workshop within the precincts of your location.
10.As regards maintenance of fine health worries, it's conjointly important to inculcate the habit of cardiopulmonary exercise or walking often, that Public Parks or gardens having jogging track is critical in such circumstances, it's preferred to have a house or a flat whereby such parks or gardens area unit simply accessible.
11.Further, it's conjointly seen that the thought of Vaastu has gained a lot of momentum now-a-days, that is subjective. In such circumstances, importance ought to run to the dimensions of the plot and therefore the Floor space quantitative relation alongside the worth tag than banking upon the Vaastu alone.
12.One factor that invariably issues everyone seems to be the parking and different provision problems, that we should always be determined before purchase. The infrastructure facilities ought to be smart all told respects. 

Necessity of acknowledged Builder
Real Estate is booming like ne'er before because of varied factors viz. IT Boom, High salaried people, soaring share costs, and wide selection of home loans accessible simply. The Builders/promoters are having a field day, because the demand is mounting. That being true, it's important to choose the acquisition of a flat/apartment created by any acknowledged Builders, as a result of some builders, having no expertise within the field of construction might take undue advantage of the mounting demand and will cause injury to the intending purchasers by creating false assurance, with poor result and high costs.

We tend to get to listen to lots of stories regarding such imitative builders, whose slogan is to cheat the folks to a tune of millions, collect cash and vanish with them, that state of affairs must be brought in check. The subsequent are few of the data given to enlighten regarding the ways in which to tackle and overcome such instances: 

1.At the first, before creating any quite investment either in flats or plots or in any kind of property, it's terribly necessary to get the list of acknowledged builders of town, who area unit concerned within the land business from quite few years.
2.Once such list is out there, then it's necessary to form an intensive investigation regarding the antecedents of the short listed builders.
3.The next vital side once finalizing the builder from whom the property is meant to be purchased, different aspects like promptness in delivery, construction standards, strict adherence to the united prices with none increase, providing all the fundamental amenities as secure at the time of booking.
4.It is advisable  to undertake and meet the residents residing within the flats created by such Builder.
5.If a proposal to sell a flat/apartment is formed for the worth that is way but the costs prevailing within the market, then it's advisable  to assume it over than obtaining anxious over the throw away worth per se purchasers could also be liable to some unknown issues, resulting in heap of issues in terms of legal and quality of construction.
6.Investing in an independent house or flat designed by any unknown builder is usually a risky act.
7.Now a day, several Builders are creating use of contemporary and distinctive techniques and are making tempting brochures depiction unbelievable styles simply to draw in the purchasers to take a position in their comes. On the idea of such brochures, serious claims are being created by the builders and successively the purchasers don't seem to be benefited in any method. 

Safe investment aspects
As way as residential property worries, it's safe to take a position in those comes that are completed rather that those that are still under-construction.
For those that shall invest over the property aside from residential, for obtaining steady rental incomes, investment on the prepared possession properties could also be a wise alternative. Also, the chance of capital appreciation would be very restricted as prepared possession property attracts premium over the market rates. 

Thus, getting an immovable property free from any quite impediments could be a long affair, which needs choice and involvement of economical professionals like Advocate, Architect, Structural Civil Engineers, Contractors and land Agents, who have important and independent roles to be contending in getting any property.


Advocate Selvakumar