APPROVAL OF BUILDING PLANS AND TRANSFER OF KHATHAS

APPROVAL OF BUILDING PLANS AND TRANSFER OF KHATHAS

Government of Karnataka vide its Circular Ref. No. HUD/259/ MLR/96 dated: 19/11/1996 has clarified many points relating to the approval of Building plans and transfer of Khathas in Bangalore Urban District area by the City Municipal Councils and Town Municipal Councils.

City Municipal Councils and Town Municipal Councils in Bangalore Urban District are empowered in sanction of plans of building comprising of ground+3 floors, after the plans are scrutinized by the Junior Town Planning Authorities.  However, it was stipulated that the plans should conform to the land use and zonal regulations of the revised comprehensive development plan (CDP) of Bangalore. Further, it was stipulated that the building plans shall be sanctioned only after effecting the transfer of Khatha.

Accordingly, the City Municipal Councils and Town Municipal Councils in Bangalore Urban District are given powers to transfer the Khatha under Section 111 to 113 of Karnataka Municipal Act, 1966; provided that the sites are formed after the land is converted and layout approved by the erstwhile Panchayats and subject to compliance of land use as per the Comprehensive Development Plan (CDP).  Further, it was held that the local bodies should collect betterment fees as prescribed by the Bangalore Development Authority, from time to time. 

It was further clarified that, in case Khatha is already transferred, the local bodies have to collect development fee, in addition to betterment fee for the building floor area at 2% for residential; Rs.4/- for industrial area and Rs.10/- for commercial area per Sq.meter, before sanction of the plan. Further, it was decided that the Sanctioning Authority of the Plan should verify whether there is access to the site or otherwise, even if the site is a part of layout approved by panchayat/notified area committee.

It was also held that though the layout area is approved by the Panchayats/notified area committees, the Municipal Commissioner / Chief Officer shall not sanction the building plans, if there is a change in the land use from  Comprehensive Development Plan (CDP) proposals.  Such cases should be directed to approach BDA for change of land use.

The local bodies should not transfer the Khathas, sanction the building plans in the layouts approved by the BDA, until such layouts are handed over to local bodies.  Further local bodies shall not entertain any transfer of khatha, sanction of building plan; if the site is in the notified area of acquisition of BDA, the details of which may be obtained from the BDA.

Further, it was directed that the local bodies in Bangalore urban district area are not permitted to approve layout plans/group housing and other development plans, which should be referred to BDA.It was however held that all the building plans above ground+ 3 floors needs clearance from BDA before sanctioning. 

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NATIONAL CONSUMER FORUM’S DECISION AGAINST BDA

NATIONAL CONSUMER FORUM’S DECISION AGAINST BDA

Sri Gopal Babu was very happy when he received an allotment of site letter from the Bangalore Development Authority.Earlier,he had applied for an allotment of site on six occasions, under State Government Employee quota as well as general public category.However, his happiness was not lasted long, as the BDA sent a cancellation letter without assigning any reason. His visits to BDA Office many a number of time did not yield any fruitful results and he could not know the exact reasons for cancellation of allotment of site.

Aggrieved by the action of the BDA in cancellation of site allotted to him earlier, Sri Gopal Babu approached District Consumer Forum which passed orders in favour of Sri Gopal Babu,  Further, the District Consumer Forum held that sum of total of all attempts made under all and every category under BDA (allotment of sites) rules 1984 should be treated as attempt for arriving at allotting the residential sites.  Against the said orders of District Consumer Forum, the BDA filed an appeal before the State Consumer Redressal Commission, where also the decision went in favour of the Consumer Sri Gopal Babu.The BDA while impugning the said decision of the State Consumer Redressal Commission, filed an appeal before the National Consumer Commission, New Delhi. 

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As regards the case, the allotment of residential sites is guided by four parameters prescribed in BDA (allotment of sites) Rules 1984, such as:

(i)                  Marital status of the applicant;

(ii)                 Income of the applicant,

(iii)                Number of Attempts made; and

(iv)               Whether any land of the applicant is acquired by the BDA.

While the contention of the BDA is that the number of attempts in each category should be the criteria for allotment of sites, both the District Consumer Forum as well as State Consumer Redressal Commission have held that all attempts, irrespective of the category shall form the basis for allotment.

While so, the National Consumer Commission was to decide whether the total number of attempts in all categories (OR) attempts under each category separately, should form the basis for allotment. 

Relying on the Judgement rendered by the Hon’ble Supreme Court of India in case of Lucknow Development Authority Vs MK Guptha, before National Consumer Commission, it was held that “more liberal interpretation of rules need to be given by statutory authorities, while dealing with common man.”

Upholding the decision of the Lower Forums, the National Consumer Commission held that “a plain reading of the BDA rules makes it clear that at best it is silent on the point that number of attempts to be read in each category separately or altogether.” So, when the Law is silent on a point, the benefit will naturally go in favour of the Consumer/Complainant. Further, the National Consumer Commission also held that “cancellation of allotment without assigning any sufficient ground is certainly a deficiency.”

Accordingly, the common man – Sri Gopal Babu’s efforts in fighting against the mighty BDA for a rightful cause ended in meeting the ends of Justice and equity; and it was an eye-opener to the  BDA authorities not to act at their whims and fancies. 

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RECITALS IN THE SALE DEED

RECITALS IN THE SALE DEED

Preparation of Sale Deed is not an easy task. Interests of both the seller/s and the purchaser/s are to be protected. Some of the necessary clauses which should find place in the sale deed are:

• Details of the parties, such as name, residential address, age and name of the father or husband of the parties;
• If one of the parties is a minor, name of the guardian representing him. Generally the minor is represented by the Natural Guardian

• In case of inanimate bodies such as firms, companies, HUFs etc., details of the authorized persons authorized to represent such bodies;
• Details regarding as to how the seller has acquired property and his ownership and title;
• Details of advance payment if any made and mode of payment of balance of sale consideration.
• Acknowledgement of receipt of advance and the sale consideration by the seller
• The fact of handing over of original documents of the property along with delivery of possession to the purchaser.
• Indemnifying the purchaser in case of defect in the title of the seller.
• Authorization letters issued by the seller for transfer of water, electricity meters;
• Details about execution of General Power of Attorney if any executed by either of the parties.
• Permanent Account Number (PAN) of the seller and the purchaser if the sale consideration is more than rupees five lakhs.

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If either of the party is not an income tax assessee then Form No.60 or Form No. 61 in case of Agriculturists has to be submitted along with the sale deed at the time of registration.

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SCRUTINY LEADS THE WAY TO THE DREAM HOUSE

SCRUTINY LEADS THE WAY TO THE DREAM HOUSE

It is the desire of every person to own a shelter. At the end of long years of employment some manage to gather the required amount to buy the property while for the more fortunate it is at their desire. However, buying a property always requires a huge investment and careful selection to avoid chances of future disappointments. Careful selection, however difficult the process may be, can go a long way in ensuring value appreciation and peaceful enjoyment of the property, as it covers selection of location, right vendor, etc.,

The Bangalore Development Authority is the planning and developing agency in this area. Any layout in the metropolitan area of Bangalore must be approved by the BDA. This is mandatory as per the Karnataka Town and Country Planning Act, 1961, and BDA Act 1976. So it is essential to make sure that the site you purchase is in a BDA approved layout or has been approved by any other competent authority.

There are many agricultural lands in the metropolitan area and in areas abutting it. The Karnataka Land Reforms Act does not allow purchase of agricultural land by the non-agriculturists; unless it is converted for non-agricultural purpose. Even house building co-operative societies are covered under this restriction. 

Revenue Site

Another dangerous area is a revenue site. Revenue sites are formed on agricultural lands, which are not converted. Using such sites for residential purpose is against the law. These sites are not entitled to power, water supply and sewerage connections. Most landowners use Form No.9 & 10 to confuse and convince the purchasers and these are generally fabricated documents, which are not issued by any statutory authority and hence not genuine. 

Government acquired land

The government is vested with powers to acquire lands for the purpose of development. Firstly, the Land Acquisition Officer announces a preliminary notification for acquisition of land and calls for objections from the public or the affected party. The affected party has to file objections within 30 days, stating the developments done on that property after obtaining all permissions from the statutory authority concerned and also taking into account the real value of the property. After hearing the case of the affected party, the government may delete the said survey number from the notification and announce the final notification. After the final notification, the government may pass an award, after which, such of the properties which have a mention in the final notification is considered as acquired property. Notified lands are prohibited from alienating. But many owners sell such notified/acquired lands to gullible purchasers by using Form Nos.9 and 10. One should be very careful to ascertain as to whether the property was acquired or not and has to check-up with the acquisition authorities in this regard. 

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Comprehensive development plan

The comprehensive development plan (CDP) is in operation in the Bangalore metropolitan area. This plan has divided the metropolitan area into different zones. Each zone is earmarked for a particular activity which are, residential: commercial: industrial which includes light and service industries, medium industries and heavy industries: public and semi-public Utilities and Services; Parks and open spaces, play grounds including public recreational area, transport and communication, agricultural land and water sheet (Water body). 

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Activity other than that stipulated in such zones is not permitted. One must always ensure that the site purchased is used in conformity with the zonal regulations, For example, houses for residential purpose should be constructed only in the residential zone. With regard to this, the zonal regulation map is available at the BDA office and it is essential to verify the Zonal Regulation Map before purchase of property.

Further, Village Panchayats are also entitled to issue the Khata but only in respect of the village Panchayat area and a further 200 metres from the limit of Gramathana area, which is marked as village area in the survey map issued by the Survey Department. 

Legal formalities like tracing title of the property, verifying the sanction plan, electricity, water, sanitary facilities and relevant sanctions, checking up the plinth area, carpet area and the super built up area are all important aspects to be verified with the help of a qualified professional. However, before checking legal formalities, approvals and permissions, it is essential that a careful selection of location with regard to its surrounding areas, habitation, density of population, access of various facilities etc., be made to ensure that the property purchased can be lived in peacefully and that the potential for reasonable value appreciation of the property is good. 

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PURCHASE OF AGRICULTURAL LAND

PURCHASE OF AGRICULTURAL LAND

Purchase of agricultural land involves compliance of various statues, in addition to the regular usual Acts such as Transfer of Property Act, Registration Act, Stamps Act, Indian Contract Act, etc.There are various restrictions on sale/purchase of agricultural land, which are imposed in Karnataka Land Reforms Act, 1961; Karnataka Land Grant Rules 1969, Karnataka Village Officers’ Abolition Act, 1961; Karnataka Land Revenue Act 1961; BDA Act 1976 and Land Acquisition Act (Central) 1976.

These restrictions on purchase/sale of agricultural lands are applicable only in Karnataka, and many other states do not have such restrictions.We shall now first look at the words agricultural lands, agriculture, agricultural labour and agriculturalist, and better know about each of them.

Agriculture: The word Agriculture encompasses aquaculture (fishery), horticulture, raising of crops, grass, garden products, dairy farming, poultry farming, breeding of live stock (animal husbandry), grazing. 

Agricultural  lands:  Any land which is used and capable of being used for any of the above purpose is an agricultural land. Agricultural land does not include house sites or land used exclusively for non-agricultural purpose.Verification of revenue records is necessary to ascertain whether the land is agricultural land or not.  

Agriculturist : A person who cultivates land personally, that by himself or by the members of his family or by hired labourers/servants under his personal supervision or of his family member, is an agriculturist.Wages to the servants/labourers should not be in the form of share in the crops, but may be paid in the form of kind or cash.

Agricultural Labourer: A person who lives mainly on the earnings out of manual labour on agricultural land including the one who prepares agricultural implements is an agricultural labourer.

Karnataka Land reforms Act 1961, has put certain ceilings on agricultural land holdings per family/per person.  Family includes, the individual, wife or wives, minor sons and unmarried daughters. The ceiling is Ten units.  If the family comprises more than five members, an additional two  units pr every member in excess of five is allowed subject to maximum of 20 units.  In case of tenant, it is 40 units.

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The area of unit differs with the class of the land. Land is classified into 4 classes based on irrigation facilities. 

‘A’ class lands: Land having assured irrigated facilities from government canal, government tanks by which two crops of paddy or one crop of sugarcane can be cultivated in a year is ‘A’ class lands. 1.3 acres of ‘A’ class land is one unit.

‘B’ class lands: Lands with assured irrigation from government canal, government tank by which only one crop of paddy can be cultivated or lands irrigated by lift irrigation project of state government by which two crops of paddy or one crop of sugarcane can be cultivated in a year is a ‘B’ class land. 2.5 acres of ‘B’ class land is one unit.

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‘C’ class lands: Lands irrigated from government sources of irrigation including lift irrigation, but not ‘A’ or ‘B’ class lands, rainfed lands where paddy or areca crop is grown, or lands irrigated by lifting the water from government canal, government tanks but the pumping installation is provided by the land owner is ‘C’ class land.  3 acres of ‘C’ class land is comprises one unit.

‘D’ class lands: Lands classified as dry but not having irrigation facilities from government source is ‘D’ class lands.  5.4 acres of ‘D’ class lands is one unit.

Holding the agricultural land beyond the ceiling limit is not allowed. Likewise disposing of land held in excess of ceiling limit is also not allowed unless declarations are filed which are referred to land tribunals.Apart from the ceiling on holding the agricultural lands, the Karnataka Land Reforms Act 1961 has put certain restrictions on the purchaser.

As per Section 79-A of Karnataka Land Reforms Act 1961, any person or family or joint family having income not less than Rs.2.00 lakhs per year from non-agricultural source is not eligible to acquire any agricultural land in any capacity as landlord, tenant, land owner, mortgagee. Further, according to Section 79-B of the Karnataka Land Reforms Act, 1961, any person other than one cultivating the land personally is not eligible to hold agricultural land. One should be an agriculturist before 01/03/1974.

Similarly, even for sale of agricultural land, including the sale in execution of a decree of a civil court, or for recovery of arrears of land revenue, gift, exchange, lease is not lawful to a person who is not an agriculturist or agricultural  labourer or to a person who holds the land in excess of ceiling limits, in terms of Section 80 of the Karnataka Land Reforms Act, 1961.

Karnataka Land Grant Rules 1969 deals with agricultural lands granted by the Government. The grantee is not allowed to sell the land for a period of 15 years from the date of taking possession of the land. There after only with the permission of the government, such lands could be sold.In case of lands granted to the members of the Scheduled Castes and Scheduled Tribes, either the alienation or conveyance of such land is totally prohibited, and if any sort of alienation or conveyance  takes place, the ownership shall revert back to the government.

Usage of the agricultural lands for any purpose other than agriculture is not allowed unless it is converted for non-agricultural purpose with the permission of the concerned authority/government and also on payment of prescribed conversion fee/charges.In case of lands, where occupancy has been granted by the Tribunal under Karnataka Land Reforms Act, 1961, sale of such land is not allowed for a period of 15 years from the date of the certificate of occupancy.  

Similarly, restrictions on alienation of agricultural land exist in case of inam lands, agricultural lands conferred under the provisions of Karnataka Village Officers’ Act, 1961, land under notification of Land Acquisition Act, BDA Act.

Karnataka Land Reforms Act, 1961 has exempted certain lands from the provisions of Section 63, 79-A, 79-B and 80, where the land is used for:

(1) Industrial development, where it will not exceed 20 units.

(2)Recognized educational institutions to be used for non- agricultural purposes not exceeding 4 units.

(3)Places of worship specified by government notification used for non-agricultural purpose not exceeding one unit.

(4)Housing Projects approved by state government where it will not exceed 10 units.

(5)Land used for horticulture, floriculture, agro based industries where it will not exceed 20 units.

However, these exemptions are subject to provisions of Karnataka Town and Country planning Act, 1961 and rules as may be prescribed by the State Government.

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The Purchaser should thoroughly examine various other aspects and avail the services of an Advocate well versed in property matters particularly agricultural land, before purchasing agricultural land.If the purchase is not an agriculturist, it is advisable to insist on conversion of land to non-agricultural purpose, before purchase.

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CALCULATION OF STAMP DUTY

CALCULATION OF STAMP DUTY

For Registration of a Flat

The Government of Karnataka collects the stamp duty on the FIRST purchase of flats/apartments from Owners, Promoters, Developers etc. and the stamp duty is calculated as follows, based on the value of the flat being purchased:

1	If the value does not exceed Rs.3.00 lakhs	2% of the value (Rs.6,000/- for Rs.3.00 lakhs)
2	If it exceeds Rs.3.00 lakhs but does not exceed Rs.5.00 lakhs.	Rs.6,000/- plus 3% on the amount exceeding Rs.3.00 lakhs (Rs.12,000/- for Rs.5.00 lakhs)
3	If it exceeds Rs.5.00 lakhs but does not exceed Rs.10.00 lakhs	Rs.12,000/- plus 6% on the amount exceedingRs.5.00 lakhs (Rs.42,000/- for Rs.10.00 lakhs)
4	If it exceeds Rs.10.00 lakhs.	Rs.42,000/- plus 8% on the amount exceeding Rs.10.00 lakhs (Rs.1,06,000/- for Rs.18 lakhs)

Infrastructural development stamp duty of 5% on the above stamp duty is also charged. In addition to the above if the property is located in city corporation or city municipal council 2% extra stamp duty on the value of the flat/apartment is also charged.

Example: Value of the flat is say Rs.5.00 lakhs.

1	Stamp duty  Rs.6,000/- plus 3% on the amount exceeding Rs.3.00 lakhs (Rs.5,00,000–Rs.3,00,000/-=Rs.2,00,000/-) at 3% = Rs.6,000/-	Rs.12,000/-
2	Infrastructural stamp duty @ 5% of the above	Rs.600/-
3	Additional stamp duty in case of properties in corporation/city municipal areas 2% of the value of the property	Rs.10,000/-
	TOTAL STAMP DUTY	Rs.22,600/-

In case of properties located outside Bangalore regional development authority stamp duty on properties exceeding Rs.10,00,000/- is calculated as follows:

1	Rs.42,000/- plus 7% on the amount exceeding Rs.10,00,000/-
2	Infrastructural stamp duty @ 5% on the above stamp duty
3	Additional stamp duty  of 2% in case of a property located in corporation / city municipal areas.

Registration charges:

Registration charges is payable at 2% of the value of the flat/ apartment purchased.

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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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