Saturday, May 30, 2015


The absolute owner has absolute rights over the property. He might use the property as he likes. However these are sure compulsions, that prohibit his rights to use the perform as he likes. The restrictions are obligatory below varied levels, largely in common interest of public in massive. When any individual becomes owner of property, one among his/her necessary right is true to use and luxuriate in the property in any lawful purpose and peaceful manner. The Transfer of property Act provides sure as shooting exceptions. This is often mirrored in Sec eleven of transfer of property Act – 1882, that provides as follows:

Sec 11 Restriction offensive to interest created — “Where on a transfer of property, an interest there in is made completely in favor of any individual, however the terms of the transfer direct that such interest shall be applied or enjoyed by him during a explicit manner, he shall be entitled to receive and lose such interest as if there no such direction”.

Sec 11 directs that there is no restriction on the enjoyment of property that has been transferred completely.E.g., wherever the property has passed completely to the customer, any direction contained within the sale deed that is contrary to absolutely the enjoyment is void and not enforceable.

But, Section 11 provides for an exception. Section stipulates that if any restrictions are obligatory on a chunk of immobile property for the aim of securing the useful enjoyment of another piece of such property such directions/restrictions shall prevail over. This example arises largely just in case, wherever a little of proportion is transferred and also the portion is maintained by the owner.

The owner might place some restrictions on the employment of the property sold for the advantage of portion of land maintained by the owner. But such restrictions aren't binding on third parties who aren't a celebration to the contract.

Section 40 of the Transfer of property Act additionally deals with restrictions on the employment of the property by its owner. within the section prescribes “Where, for a lot of useful enjoyment of his own immovable property, a 3rd person has severally of any interest within the immobile property of another person, or any easement there on, right to restrain the enjoyment during a particulars manner of later property. This is often right of a 3rd person. Who isn't a celebration to the contract?

This right is offered against transferees. However such rights are enforceable against a transferee with notice or against transferees got the property inconsiderately they're not enforceable against transferee without warning or against a transferee considerately or against the property.

There are clear variations between section eleven and forty. The restrictions below section 11 are positive or affirmative. These restrictions are enforceable solely against the parties to the contract. However restrictions below forty square measure negative in nature and are enforceable by the third parties, against transferees.

Another necessary section that restricts the employment of property is section seventeen. In step with this section, the transferer might direct the transferee to accumulate. The financial gain arising from the property. The direction might to accumulate the financial gain either fully or partially. But such directions to accumulate the financial gain can't be permanent. Such directions are also obligatory for a amount of eighteen years from the date of transfer or for the lifetime of transferer whichever is longer. Any direction for accumulation of financial gain arising from the property transfer for an amount longer, than the periods referred are void.

For example, the granter of the property might offer for enjoyment of the property by mister. “A' till mister. “B” attains eighteen years more matured also are direct mister. “A” to accumulate the financial gain from the property till “B” attains eighteen years more matured. However transferer will direct the transferee to accumulate the financial gain arising from such property for indefinite amount for the aim of
• Payment of the debts of the transferer
• The availability of parts of youngsters
• Remoter issue of the transferer
• For the preservation or maintenance of the property transferred

Section 95 of In state Land Revenue Act provides that, agricultural land can't be used for non-agricultural purpose while not the permission of the Deputy Commissioner and Section ninety seven provides that non-agricultural land can't be used for agricultural purpose once more while not permission of the Deputy Commissioner. This is often chiefly to regulate the conversion of agricultural land and to safeguard agriculturists.

The state Land Reforms Act, below Section 109, permits sure class of establishments from the restrictive provisions of owning agricultural land. Such establishments might use agricultural land for non-agricultural purpose, however cannot sale such agricultural lands permissible uses are industrial development, academic establishments, places of worship, housing comes, and gardening, horticulture and agro based mostly industries. These are restrictions on holding of the agricultural property a relying upon the character of the employment.

The state city and country coming up with Act, 1961 Sec 14 (1) provides that “On and from the date on that a declaration of intention to arrange a top level view is printed below Sub-Section (1) of Sec – ten each land use, amendment in land use and each development within the space coated by the arrange shall adjust to the provisions of this act the define Development arrange and also the rules as finally approved by the regime below section (3) of section thirteen.  Sec fourteen (2)  provides that such amendment in land use or development as is brought up in sub-sec(1) shall be created except with the written permission of the design Authority that shall be contained during a commencement certificate granted by the design authority within the type prescribed u/s 15(1)  Sec 15(4)  says that if any individual will any work on, or makes any use of any property in dispute of Sec 14(1), the design authority might direct such person by notice in writing, to prevent any such add progress or discontinue any such use, and will when creating an inquiry take away or pull down any such work and restore the land to its original condition or because the case is also take any live to prevent such use.

Also Sec three hundred of the state Municipal firms Act, 1976 provides that the development or reconstruction of a building shall not be begun unless and till the commissioner has granted permission for the execution of the work, Sec 304 provides that the commissioner shall not allow the development of any building of public recreation or any addition to that, if such building is:Within a radius of two hundred meters from any residential establishment connected to a recognized institution like, a school or highschool or Ladies College or Public Hospital with an oversized indoor patient ward or an orphanage containing 100 or a lot of inmates. Placed in any thickly inhabited community that is either completely residential or reserved or used usually for residential as distinguished from business functions Located in any space reserved for residential functions by any housing or coming up with theme or otherwise below any enactment. The design authorities and native bodies additionally impose restrictions on construction, use of the land largely to make sure orderly constructions with natural light-weight and air and additionally to produce peaceful and correct atmosphere and atmosphere to academic establishments, hospitals.


Friday, May 29, 2015


The Bangalore Development Authority and the Karnataka Housing Board are the only two government agencies dealing with the housing needs of the people of Bangalore, though, however, there are a large number of private property developers including housing cooperative societies in the field.

Ever since its formation in the year 1976, the. B.D.A. has formed 62 layouts and has allotted house sites/to about 2lakhs people. But the newly formed layouts such as Visveswaraiah Layout, Banashankari 6th stage, Anjanapura Layout, lack even the basic civic amenities such as good roads, water and sanitary facilities, public transport, schools and colleges, market centres, recreation clubs, parks, street lights even though several years have elapsed. The resultant effect is that many of the allottees of sites in these layouts have not come forward to put up construction.

When this is the plight of the allottees of the house sites in these layouts, there are a large number of people eagerly waiting for announcement of new layouts to try their luck. The population of Bangalore is estimated to be around 85lakhs and at least about 50% of them may be in need of house or house sites. Assuming that the K.H.B has allotted house and or house sites to about 1lakh people, in addition to the house sites allotted by the BOA, and further assuming that about 10% to 15% of the remainder have purchased properties from the private property developers, still there remains a large number of people who are yet to get their housing needs fulfilled.

Before initiating any steps for formation of new layouts, the B.D.A. and other connected agencies may take up on priority basis the work relating to the civic and other amenities in the already formed layouts to make them fit for human habitation so that the allotters of sites may construct their houses and move into them. Only thereupon, the 3.0.A may initiate action to develop fully fledged townships with all civic amenities and best road and rail connectivity. The present practice of simply forming layouts without providing civic amenities and making the allottees to wait for several years for these facilities may be discontinued. It is suggested that the procedure adopted in the case of private property developers permitting them to sell only 60% of the total sites in their layouts at the first stage and to sell the remaining 40% upon completion of the layout fully may be adopted in respect of the new layouts to be formed by the BDA so that the BDA may move faster.

Further, the role of the private property developers cannot be overlooked particularly for the reason that the BDA/KHB are not in a position to meet the housing needs of the people fully. It would be fair if the Government encourages the private property developers and introduce a single window clearance system for approval of layouts formed them to avoid unnecessary delay in granting approval and tossing the documents to several departments. While at the same time, stringent punishment may be inflicted on the property developers who violate building bye-laws and other statutory regulations and cheat the public.


Thursday, May 28, 2015


The term “Insolvent”, in common parlance is referred as Pauper or Bankrupt. An insolvent is not considered a legal person for the purpose of enforcement of any obligation committed by him either during the pendency of insolvency proceedings or after he is adjudged as insolvent.

Adjudication of an Insolvent
In India, jurisdiction of the courts to adjudicate a person as an insolvent has been conferred by two Acts, namely, the Presidency towns Insolvency Act, 1909, which is applicable in the Presidency towns in India and the Provincial Insolvency Act, 1920, applicable in the muffusil areas.

To adjudicate a person as an Insolvent, such a person has to be a “Debtor” and should have committed an act of insolvency. A debtor, under these Acts, includes only those who are subjected to Indian laws, either by birth or by domicile including a  temporary residence. Thus, a foreigner cannot be adjudged insolvent by a court in India unless the alleged act of insolvency was committed or suffered by that person during his personal residence in India.

Minor cannot be adjudged insolvent
Under Indian Laws, as a minor is not competent to enter into a contract he cannot be adjudged Insolvent even on his own petition.  In the case of a minor being a partner in a firm consisting of adult and minor partners and if adjudication order is sought against the firm, the same shall be binding on the firm/partners except the minor.

Property of an insolvent
The expression “Property of an Insolvent”, has been defined as only the property of the insolvent which is divisible amongst the creditors and not otherwise. It includes any property over which or over the profits of which any person has the  power of alienation which can be exercised for his own  benefit.

The word 'property' includes the right in the property or things of a person. However, to constitute the property, an insolvent should have an interest in praesenti to dispose of the same and not such an interest which may depend upon the fulfillment of certain conditions or contingencies.

Appointment of Official Assignee or Receiver
Under section 17 of the Presidency Town Insolvency Act or section 28(2) of Provincial Insolvency Act, 1920, after the order of adjudication, the property of an insolvent vests in the Official Assignee and becomes divisible amongst the creditors, irrespective of its situation.  However, when an order of adjudication has been passed under the Presidency Town Insolvency Act, 1909, any order of adjudication passed against the same insolvent by the District Court of another place, at a later date under Provincial Insolvency Act will not operate since the said property is already vested in the Official Assignee under the Presidency Town Insolvency Act.

Movable and Immovable property
The order of adjudication operates as a statutory transfer to the Official Assignee of all the property of the insolvent person in India, whether movable or immovable.  Similarly, the movable property of an insolvent situated in foreign country shall vest with the Official Assignee or Receiver.  But, the immovable property of an insolvent situated in a foreign country, shall be governed by the law of the country within whose jurisdiction such property is situated.

Divisible and indivisible Properties
The property which is divisible amongst the creditors of the insolvent can only vest with the Official Assignee or the Receiver, which may be:
  1. Property belonging to an insolvent at the time of commencement of insolvency proceedings.
  2. Property which may be acquired by or devolve on the insolvent after the order of adjudication and before his discharge.
  3. Goods in possession, or disposition of the insolvent.

The properties which are not divisible amongst the creditors of the insolvent falls into two classes
a)   Property held by the insolvent in trust for any other person and
b)   Tools of trade, apparel and other similar property.

Vesting of property in the Official Receiver or Assignee
Immediately upon an order of adjudication by the Court, the property of the insolvent wherever situated vests in the official assignee/receiver. Till an Official Receiver is appointed by the Court, all the rights and powers exercisable by the Receiver can be exercised by the Court itself.

Intervention of Official Assignee is must
The right and interest of an insolvent over the property do not automatically get transferred in favour of the Official Receiver upon passing of an adjudication order by the court unless the Official Assignee intervenes on behalf of the insolvent. Where the official assignee does not intervene and the insolvent transfers the said property to another person who takes it in good faith and for value, the transferee acquires a good title to the property.

Powers of the Official Receiver or Assignee
With the order of adjudication, the property of the insolvent vests in the Official Assignee or the receiver and it is the duty of the assignee to realize such properties of the insolvent expeditiously and to distribute dividends to the creditors entitled thereto. However, before exercising the power of realization of properties of an insolvent, abundant caution has to be exercised by the assignee to avoid unnecessary litigations.

Under the aforesaid Acts, certain powers have been vested with the assignee:
Power to sell: The Receiver is empowered to sell the insolvent's property without the consent of the Court. But the aforesaid Acts do not empower the receiver or the official assignee to sell anything more than the property of the insolvent which vests in him by reason of the adjudication.

Power in case of mortgaged property: Where a Receiver is appointed by consent of the parties after passing of a decree in a mortgage suit for sale of such mortgaged property and it is agreed that the receiver shall recover the rents of the property for a period of one year to hand over the same to the mortgagee, the mortgagee's right to receive the rents will not be affected by insolvency of the mortgagor at any time during this period and neither the official assignee nor other decree-holders will be entitled to a rate able distribution of such rents.

Bonafide Sale
Section 53 of the Provincial Insolvency Act provides that a transfer of property not being a transfer in favour of a purchaser in good faith and for valuable consideration shall, if the transferor is adjudged insolvent within two years after the date of transfer, be voidable as against the Receiver. Further, where the debtor transfers all or substantially all the properties in consideration of the past debts, such a transfer constitutes an act of insolvency since it has the effect of withdrawing all the property from the legal process, which his creditors have a right to enforce against the insolvent. 

Thus, an order of adjudication of insolvency will deprive the insolvent from dealing with his properties which shall be dealt with by the Official Assignee or Receiver when once such a person is appointed by the Court.