18ARC84 – PROFESSIONAL PRACTICE

Module-5
 General overview of the Industry
The economic sector comprising all companies involved in construction

• At a broad level, some people refer to the industry as the Construction Industry, Building Industry,
Architecture / Engineering / Construction (AEC) Industry, or even the Architecture / Engineering /
Construction / Operation (AECO) Industry.

• These terms are used interchangeably.

• The industry typically focuses on all the employees and tasks required to plan, design, construct, operate,
and manage the delivery and operations of the built environment.

2
 General overview of the Industry
The industry can be separated into different categories.

One common breakdown is by the type of owner, and in particular,

if the owner is a private entity (an individual or company) vs. a public (or government) entity.

Another is to separate the industry by the type of facilities that are constructed. In this
manner, we can separate the industry into four broad areas:

▪ Commercial Buildings;
▪ Infrastructure;
▪ Industrial; and
▪ Residential.

3
 General overview of the Industry
Commercial Buildings: Buildings and enclosures that contain a
structure with enclosed space with an enclosure system with a non-
industrial purpose.

They may be fully enclosed, such are apartments or office buildings,

or they may be partially open such as stadiums or monuments.

Examples of buildings include office buildings, hospitals, rail

stations, stadiums, arenas, and many more. Commercial buildings
are typically designed by an architect. There may be many different
types of owners.
Infrastructure: Infrastructure facilities serve as core
facilities that serve the public, which are not buildings.

This category is sometimes referred to as ‘heavy’

construction.

Examples include roads, bridges, dams, locks, and

tunnels. These facilities are typically funded by the
government. The design is typically led by an engineer
such as a civil engineer.

New infrastructure projects typically require a long

4
planning and design phase.
 General overview of the Industry
Industrial: Industrial facilities house core industrial processes,
and the design of the facility is focused on the industrial
process.

Examples include refineries, power plants, chemical plants,

manufacturing facilities. The design of these facilities is heavily
dependent on the process that they support, so they are
frequently designed by specialty engineers in collaboration with
civil engineers. Many of these projects are schedule-driven in
order to start the process as soon as possible.

Residential/ Housing: The housing sector includes

residential buildings with the accompanying capital
equipment; and the construction, repair, production, supply,
transport, and other systems that serve housing resources
and are included in the system of housing management as
its material-technical base.

5
Various participants and dimensions of building industry

Stake Holders and Dimensions

Government: Involved in policy making, legislation and promoting industry and
financial guideline towards industry.
Controlling prices of basic materials like steel, cement etc.

Industry:
• MATERIAL MANUFACTURERS: Cement, steel, admixtures, chemical products, bricks,
Pre Fab elements, semi finished and fully finished building materials.

• QUARRYING ACTIVITIES: Stone, sand and others like forestry, commercial

plantations etc.

• MACHINERY AND TOOLS, CONSTRUCTION EQUIPMENT: JCB, Concrete mixers, trucks,

cranes etc.

Hence industry is involved in primary and secondary sector as a provider and in

tertiary sector as a service provider.
Various participants and dimensions of building industry

Stake Holders and Dimensions

Finance:
• Large Scale Industries like cement. Steel etc may receive government funding.
• Small and medium scale manufacturing is given concessions and access to loans-
both from banks and private financiers.
• Housing loans available for individuals from both public and private finance
institutes.
• Institutes like NHB, HUDCO, HDFC are specifically aimed at housing projects.

Labour:
• Highly Skilled, Semi Skilled and Unskilled labour are part of the industry.
• Professionals: Architects, engineers, PMC firms
• Training and research institutes.
Various participants and dimensions of building industry

Stake Holders and Dimensions

Statutory Controls

Various bodies, like government, local bodies. different boards control and enforce
various measures to guide industry.

• Government policies and legislation: For example. Minimum Wages Act. Workman
Compensation Act, Industry Act, Labour Acts-women and children employment-all labour
related. Others Acts relate to control of pollution-air. water, noise. Environment impact
assessment Act relates to especially large housing projects and housing projects close to
water bodies etc.

• Construction procedures: Normally guidelines are provided by NBC, CPWD. State PWDs, and
BIS. Also many PSUs and private organisations follow their own procedures. However, the
industry still lacks standardisation, especially relating to products hence giving rise to
spurious and substandard products leading to loss and deaths.
Various participants and dimensions of building industry

Stake Holders and Dimensions

Statutory Controls

Various bodies, like government, local bodies. different boards control and enforce various
measures to guide industry.

• Enforcement issues: enforcement issues related to building. Industry relate to: products and
standards by BIS,by CPWD and PWDS regarding construction processes and execution. Further,
third-party evaluation during execution apart from quality control cells in all organisations help
in effective execution.

• Organisations like local bodies, for example, BDA/(developmental authorities), corporations,

municipalities, and gram panchayats through their own bye laws control quality of
construction at different les-pollution related, location of industry, etc.
Role of Architect
Till Now, the architect's role has been limited to designing buildings in general However, today opportunities have
increased for an architect's participation in diverse fields where he can contribute substantially through his skills.

At Government level in terms of policy making, he can contribute through his association, i.e., IIA (Indian Institute
of Architects) at national and local level to formulate opinions leading to policy changes or through NGO s for
public issues. example, housing, earthquake rehabilitation schemes/disaster mitigation etc. housing policy,
changes in rules and regulations to the current legislation can build up public opinion through articles/meetings
of NGOs.

1
0
Role of Architect

Industry:

• An architect has opportunities to become an entrepreneur beyond his profession separately. He

can innovate in products and processes and details, patent them and either ask industry to
manufacture or can take up himself (here he can combine both design and productions finish to
high level standards). He can suggest newer products needed improve building design and
efficiency to the industry to take up manufacture them eg appropriate technology.

• He can join government/private organizations to contribute design wise as well as to regulate

the design process and execution. For example, CBRI or NBO, building council, energy related
organisations, etc.

• Adopt innovative products in design where energy/green building ideas are consciously present
in design, where efficiency of use is enhanced over the lifetime of the building or cost-
effectiveness of the design is increased
Role of Architect

Finance:

• An architect is directly involved in reduction of costs in design not only in the choice of
materials but also methods of construction and Labour friendly measures and appropriate use
of machinery.

• Reduction in cost at planning, designing, execution and post execution maintenance through
design measures are essential.

• To advise individuals, organisations and government to effectively control cost not only in design
but suggest/recommend also through tax reliefs, incentives, etc., so that both industry and
users gets benefited from it.Example Life cycle cost measurers.

• Advise banks as a valuer to adopt good cost-effective practices

Role of Architect

Labour:

• An architect can at different stages of design plan to use labour -skilled

and semi-skilled appropriately to save cost and for efficient work production.

• In Indian scenario where labour is available, he can use more labour than machinery.
However, a good balance of labour and machinery needs to be planned in Indian
case.

• His contribution does not confine only to designing but also in training labour in cost
saving/material saving techniques- raising their skills also.

• This can be done through institutions or through practice.

Role of Architect

Statutory Controls:

• An architect can contribute substantially in areas like environment conservation, by not only
adopting them,but by also increasing their efficiency.

• Bring/draw attention of enforcement agencies like CPWD, PWD or local bodies to more
efficient practices in design and execution, relaxation and fine tuning of wind/solar energy,
recycling of water at residential/ neighbourhood level, to be made part of enforcement.
Types of insurance necessary during contract

Insurance
7

• Itis defined as a contract ( in writing under which one party (called insurer) agrees in return for
a consideration (called premium) to indemnify the other party (called insured) against loss or
damage suffered on account of an uncertain future event or contingency or to pay a specified
sum on the happening of a specified event

• Insurance value is the value for which the building is insured normally the building
is insured for the super structure only excluding the cost of foundation and the site
Types of insurance necessary during contract

Insurance

• Insurance is a mechanism for protection against losses due to events assets are insured as are
likely to be destroyed or made non functional by any accident of any event, viz fire, floods,
cyclone, lightning, earthquake, breakdown, etc these events are termed as perils.

• There is uncertainty about the risk occurrence, insurance is care against such
Contingencies

• There are two types of values considered at the time of insurance:

• Reinstatement value which represent present day replacement cost

• Market value is arrived by deducting depreciation from reinstatement value itis
realisable value or actual worth of any property at given point of time
Types of insurance necessary during contract

Principles of insurance law conditions to be satisfied for claiming insurance

Basic principle of law of insurance are:

• Utmost good faith

• Insurable interest
• Indemnity (and its corollaries “subrogation and contribution)
• Proximate clause.

Subrogation and Contribution

Subrogation: Transfer of rights and remedies of insured to the insurer. Recovering

loss from third party.

Contribution: In case of multiple insurances on same subject matter, insurer will be jointly
indemnified by all insurers on pro rata basis.
Types of insurance necessary during contract
Principles of insurance law conditions to be satisfied for claiming insurance
UTMOST GOOD FAITH:

• In insurance contracts good faith is required to be observed in a more onerous way. The
proposer has a legal duty to disclose all material information about the subject matter of
insurance to the insurers.

• Material information is that information which enables the insurers to decide whether
to accept the risk and if itis acceptable, what should be the premium.

• The duty applies not only to material facts which the proposer knows, but also extends to
material facts which he ought to know.

• In respect of fire insurance for a building the material facts are:

• Construction of a building and its specification
• Occupancy (office, residence, godown, factory etc.)
• Nature of goods stored/ handled (non hazardous, hazardous extra hazardous)
• Age of the building. Proposal forms are designed to obtain all material facts.
Types of insurance necessary during contract

Principles of insurance law conditions to be satisfied for claiming insurance

INSURABLE INTEREST

• The owner of the property has a right to effect insurance on the property if he is likely to suffer
financially when, the property is lost or damaged. This legal right to insure is called insurable
interest. In fire insurance, insurable interest must be present both at the time of taking the policy
and at the time of loss.

• Under fire insurance, the following persons have insurable interest.

• Owner, Pawnee, Pawn Broker, Mortgagee, Official Receiver in the insolvency case,
Warehouse Keeper, Common Carrier, Assignees- ifthe insurance policy stipulates so.
Types of insurance necessary during contract

Principles of insurance law conditions to be satisfied for claiming insurance

INDEMNITY

• Indemnity the principle of indemnity arises under common law and requires that an
insurance contract should be a contract of indemnity and nothing more.

• The object of the principle is to place the insured after a loss in the same financial
position as far as possible, as he occupied immediately before loss.

• This principal prevents the insured from making a profit.

• The measure of indemnity as applied to buildings is the cost of reinstating the

building or repairing the damaged portion minus depreciation
Types of insurance necessary during contract

Principles of insurance law conditions to be satisfied for claiming insurance

PROXIMATE CLAUSE

• Proximate clause insurance provides financial protection for losses caused by insured perils ifthe
loss is due to two or more causes acting simultaneously or one after another, then itis essential to
identify the most important, the most effective, and the most powerful cause responsible for the
loss

• This clause is termed as “Proximate Clause” and all other clauses are considered as
“ Remote”
Types of insurance necessary during contract

Types of insurances in a construction contract

There are many different types of insurance designed to protect property owners,
developers, and contractors through the various phases of a construction project.

1.BUILDERS RISK (COURSE OF CONSTRUCTION) INSURANCE

Builders risk insurance, also known as course of construction (COC) insurance, or

sometimes construction all risk insurance, is insurance coverage for buildings and other
structures while they are under construction. Builders risk policies will usually have
options to cover the following types of property:

• Building materials
• Foundations
• Temporary structures such as scaffolding
• Paving, fencing, outdoor fixtures
• Lawns, trees and plants installed by the builder
Types of insurance necessary during contract
Types of insurances in a construction contract

There are many different types of insurance designed to protect property owners,
developers, and contractors through the various phases of a construction project.

2. COMMERCIAL AND CONTRACTOR GENERAL LIABILITY INSURANCE

• General liability insurance, sometimes called commercial general liability (CGL) insurance
or contractor general liability insurance, is a class of insurance that provides liability
protection to businesses in the case of bodily harm or property damage during the
course of business.
• Insurance providers create various versions of these policies available to professionals in
construction and for construction projects. Whether you are the property owner, a
construction company, or a contractor, liability insurance policies are available to protect
policyholders from unnecessary risk.
• General liability insurance policies will usually cover a broad range of damages,
including:
• Faulty workmanship
• Job-related injury
• Advertising injury / defamation
Types of insurance necessary during contract

Types of insurances in a construction contract

There are many different types of insurance designed to protect property owners,
developers, and contractors through the various phases of a construction project.

3. WORKERS’ COMPENSATION INSURANCE

• Workers’ compensation insurance, also known as workman’s compensation, is

insurance coverage designed to protect businesses and contractors when their
employees are injured while on the job. It does this by covering the following costs
after a covered incident:

• Medical expenses
• Missed wages
• Ongoing recovery costs related to an injury
• Legal fees when an injured person sues the policyholder
• Funeral costs and death benefits
Types of insurance necessary during contract
Types of insurances in a construction contract

There are many different types of insurance designed to protect property owners,
developers, and contractors through the various phases of a construction project.

4.PROFESSIONAL INDEMNITY INSURANCE

This insures contractors with design responsibility (i.e. under design and build contracts) against
liability arising out of professional negligence and will respond if, for example, designs do not
comply with the requirements of the underlying construction contract.

5. PUBLIC LIABILITY INSURANCE

This provides cover for liability arising out of death or personal injury to third parties (but not the
contractor’s employees, who should be covered by worker’s compensation insurance) or damage
to property belonging to third parties (but not the works, which is covered by the all risks
insurance) prior to the works being taken over.
Fire insurance

Fire Insurance

• Fire insurance is a contract of indemnity and the insured cannot claim anything more than
the amount of actual loss

• Fire insurance is a Contract under which one party (the insurer) in return for a consideration
(called premium) agrees to indemnify the other party (the insured) For the financial loss which the
later may suffer due to damage to the property insured by fire during specified period of time
and up to an Agreed amount.
Fire insurance

Fire insurance in construction contracts & its implications:

LOSSES OR DAMAGES BY FIRE:

• Loss or damages caused by efforts to extinguish fire.

• Damage caused by water used to extinguish fire.
• Pulling down of adjacent buildings to prevent spread of flame.
• Breakage of goods in the process of their removal (e.g. Furniture).
• Wages paid to workmen extinguishing fire.
Fire insurance
Types Of Insurance Policies
STANDARD FIRE AND SPECIAL PERILS POLICY:

• Fire lightning explosion/implosion, aircraft damage riot, strike, malicious and terrorism damage
(RSMTD), Storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation. Subsidence
and landslide, including rock slide bursting and/over flowing of water tanks, apparatus and
pipes & bush fire.

• General exclusions: the policy does not cover loss or damages of 5 % of each and
every claim resulting from operation of:

• Lightning/subsidence and landslide including rock slide

• War
• Nuclear peril
• Pollution, or contamination excluding specified one (e) precious stones, curios, works of
art ,manuscripts, plans, drawings,
• Securities, documents, paper money, cheques, books of accounts, computer systems
and explosive
• Stocks of cold storage
Fire insurance
Types Of Insurance Policies
VALUED / INSURED POLICY:

• Valued policy is issued for properties whose market value cannot be ascertained,
e.g. Curios, works of art, manuscripts, obsolete machinery and the like. In such cases, valuation
certificate must be acceptable to the insurer.

REINSTATEMENT VALUE POLICY:

• For buildings, machinery, furniture, fixtures and fitting shall be the cost of replacing or in
reinstating the property subject to certain requirements being under taken by the policyholder.

FLOATING POLICY:

• This is usually taken for those goods that are frequently changing in a warehouse. This policy
can be taken on those goods that are lying in different localities or godowns. Since the
quantity of the goods in different locations will be varying, it becomes difficult for the owner to
take up a specific policy.
Fire insurance
Types Of Insurance Policies
VALUED / INSURED POLICY:

• Valued policy is issued for properties whose market value cannot be ascertained,
e.g. Curios, works of art, manuscripts, obsolete machinery and the like. In such cases, valuation
certificate must be acceptable to the insurer.

REINSTATEMENT VALUE POLICY:

• For buildings, machinery, furniture, fixtures and fitting shall be the cost of replacing or in
reinstating the property subject to certain requirements being under taken by the policyholder.

FLOATING POLICY:

• This is usually taken for those goods that are frequently changing in a warehouse. This policy
can be taken on those goods that are lying in different localities or godowns. Since the
quantity of the goods in different locations will be varying, it becomes difficult for the owner to
take up a specific policy.
Fire insurance
Conditions to be satisfied for claims:

• Notice of loss or damage should be given to the insurer forthwith.

• Claim statement (giving details of item wise amount of loss excluding profit of any kind) should
be submitted within 15 days or further time as allowed by the insurance company. Suitable
deduction should be made for depreciation under insurance and for salvage value.
• Particulars of other insurers should be given.
• The insurer is not liable for any loss after the expiry of 12 months from the date of loss unless
the claim is the subject of pending action or arbitration. If the liability is disclaimed by the
insurer and the insured has not filed a suit in court of law within 12 months from the date of
disclaimer, the claim is deemed to have been abandoned by the insured. It is not
recoverable thereafter.
• Expenses incurred on architects, surveyors and consulting engineers beyond 3% is excluded.
• Expenditure on removal debris beyond 1% is excluded.
• The proximate cause of loss should be fire.
• Fire must be accidental and not intentional.
• The ignition must be either goods or of the premises where goods are kept.
• The loss or damage must relate to subject matter of policy.
Fire insurance
Process of preparation of a fire insurance report
• The individual/corporate should inform the insurer as early as possible, no later
than 24 hours

• All relevant documents pertaining to the claim should be given to the

surveyor/appointed representative of the insurer

• The fire insurance report should have

• Copy of claim intimation given to company together with xerox of policy
premium receipt
• Survey report
• Duly filled claim form
• Police panchnama/first information report/final police report (forensic deptt)
• Fire brigade report
• Photographs of damaged property showing extent of damage &/or video film of loss
• Meteorological report in case of flood, cyclone claims
• Detailed claim bills with necessary vouchers
• Copy of enquiry committee report on the cause of loss if enquiry is ordered by insured

• To substantiate quantum of loss, value of damaged insured property just prior to loss, value of salvage to
be made available to Surveyors/investigators fixed asset register, original bills/
invoice,repairs/replacement bills/invoices and stock register.
Fire insurance
Architect’s role in preparation of the fire insurance report
• The architect should ensure as project architects for the client’s interest before and
after the fire
• He/she should make fire safety an essential consideration in site organisation, checking material
specification and compliance to Standards
• Consult with fire preservation professionals, fire departments or fire service within his locality and discuss
the project at the onset
• About the safest procedures for performing the necessary works
• Explain the safest expectations to the contractor during the day of site possession
• Check if there is need to install temporary fire fighting systems such as fire extinguishers, fire
alarms etc
• Ensure that contractor’s workers are properly trained and supervised in safety
practices
• Ensure that the contractors are familiar with the location of phones and calls boxes, fire extinguishers
and the nearest water source
• Report all acts of carelessness to the contractor immediately they are observed
• Ensure that an electrician inspects all temporary wiring prior to the start of construction
• Ensure that all old wires that are brittle or frayed should be replaced or
disconnected before replacement
Fire insurance
Architect’s role in preparation of the fire insurance report
• Ensure that all welding and cutting of metal materials are as much as possible be
performed off site or a far distance from the main buildings
• Ensure that the contractors and his operators follow safety procedures for handling
hazardous devices and materials
• Carefully supervise all open flame and electric coil works on site
• Ensure that all flammable liquids are stored at a far distance from the main
buildings or off site
• Ensure that all areas where chemical solvents are used are properly ventilated to prevent
the accumulation of fumes that can cause explosion
• Ensure that all rags, papers, and construction debris are disposed off site or stored in an air
tight container
• Ensure that smoking of all kinds is prohibited on construction site
• Before signing off completion certificate for the building, the architect must check that all the
above mentioned rules and regulations pertaining to the fire department are done thoroughly
and checked that they are in place
• In the event of fire, architect must ensure that report filled for fire
Easements
Easement as defined under section 4 of the Indian easement act 1882, is a right which the owner or
occupier of certain land possesses as such, for the beneficial enjoyment of that land, to do and
continue to do something or to prevent and continue to prevent;

• Something being done, in or upon or in respect of, certain other land not his own.
• The land for the beneficial enjoyment of which the right exists is called the DOMINANT HERITAGE and the
owner or occupier thereof The dominant owner the land on which the liability is imposed is called the
SERVIENT HERITAGE and the owner or occupier is called the servient owner

PlotA Dominant Heritage

Owner 01

Plot B
Owner 02 Servient Heritage

Road

3
5
Easements
Disturbance of Easement Rights

Any type of interference for peaceful enjoyment of the easement rights acquired by the
owner of dominant tenement is called DISTURBANCE.
This interference may be in the form of obstruction or threat of obstruction in such a case
court should be approached for an injunction to restrain the person causing disturbance

3
6
Easements
Easement Rights

NATURAL RIGHTS
• To receive light which falls vertically on the land.
• Right of support to land in its natural condition.
• Right to drain water from a land at a higher level to land at a lower level.
• No right to pollute air.
• No right to receive light through adjacent plot.

CUSTOMARY RIGHTS
Customary rights are claimed for a large number of persons of a Common Easement Rights
particular locality. These are public rights annexed to the Place in are:
general. • Easement Of Light
These are not allowed if they are not reasonable.Examples of • Easement Of A Right To Free
customary rights are: Passage Of Light
• Rights to bury the dead at a particular place. • Easements Regarding Pollution
Of Air
• Right to use a particular property by fisherman.
• Easements Of Access To Air
• Right of way in favor of large and fluctuating body of persons. • Easements Relating To Water
•Rights to use a public place/ground for religious purposes by a
community on certain occasions

3
7
Easements
1. Easement of Light

• The right to have access of light to the property owned by the owner is a natural right, and such a right may
be either a natural right or an easement
• This right can be acquired in case of buildings and such a right is a species of a negative easement.
• The owner of the dominant tenements is entitled to the uninterrupted access through his ancient windows of
a quantity of light required for inhabitancy or for his business.

2. Easement of a right to Free Passage

• Dominant owner should prove that Light has been curtailed

• Consequently, dominant tenement has become inhabitable
• Disturbance has affected dominant owner
• In case disturbance is not substantial, court at its discretion may award monetary compensation as
damages.
3. Easements regarding Pollution of air

Unreasonable pollution causing injury to property or health and also creating personal discomfort cannot be
justified normally

3
8
Easements
4. Easements of access to Air

• This is concerned with the volume of air which may be available through an opening.
• The right to have air also is a natural right and a person has a right to receive all the air that passes to his
land
• Every owner has got the right to open apertures in his own wall and unless by doing so he invades the
privacy of any other pre-existing and well-established right vested in his neighbor, the latter cannot force him
to close the apertures and the remedy for the neighbor is to build on his own land or otherwise obstruct the
apertures.
5. Easements of access to Water

• If there is a defined channel and the water can get through that channel, it must not be allowed to sprawl on
the adjoining land.
• If there is no defined channel from which the water can flow, then the land at a lower level has to take the
burden of the flow of that water
• The right to flow of water or the right to discharge water by means of artificial water courses is not a natural
right, but may be acquired by contract, prescription, grant or even arrangement and the rights of such nature
too are to be established like other easementary rights

3
9
Easements
Easement of Support

• Easements of support may arise in cases of the support of buildings by land or the support of buildings by
buildings or easements to let down the surface as in the case of mining operations, etc. The real nature of
this right is not that the adjacent soil should not be disturbed, but such disturbance should not be injurious to
the dominant easement.
• If an adjoining building is endangered due to pile driving, that owner has a right for compensation
• Partition wall between two buildings is another type of support. While laying of fresh foundation the existing
foundation of the neighboring building should be adequately supported, i e dominant heritage.

Modes of Acquiring Easement

• BY GRANT: An easement may be imposed by any one in the circumstances and to the extent in and to
which he may transfer his interest in the heritage on which the liability is to be imposed.

• BY NECESSITY: When a property is divided into two parts either by sale, mortgages, partition, etc and they
are so situated that one cannot be enjoyed without exercising a particular privilege in or upon the other.

• BY PRESCRIPTION: It is acquisition of a right or title by constant use or possession for 20 years. If it is

claimed against government, it is 60 years. Mode of acquiring easement by this method is detailed in the
easement act, 1882, a person should have enjoyed the right of way, right to air, right to light and right of
support continuously for a period of 20 years without interruption. It is necessary to obtain a declaratory
order from the court that dominant owner is entitled to the prescriptive easement rights the suit should be
filed within two years after the expiry of 20 years 9
Easements
Architect’s role in protecting easement rights

• CASE I: TO PREVENT THE NEIGHBOUR FROM ACQUIRING EASEMENT RIGHTS BY PRESCRIPTION

• SITUATION 1: there are two adjacent plots client has kept his plot vacant ( his neighbor has built ground
floor And first floor. he is receiving light and air from clients plot also through windows on his building. if the
client does not take action to prevent his neighbor from acquiring easement rights, there will be difficulty in
developing his plot in future.

• SITUATION 2: Both have developed their plots to equal height the neighbour is attempting to raise another
floor. Clients should be advised to proceed as described to draw an agreement with the neighbour stating
that:
• No easement rights are claimed by his neighbor against him when he develops his land or builds another
floor as the case may be. Neighbor as a licensee is allowed to enjoy light and air from clients plot on
payment of normal fee
• If the neighbor does not agree for such an agreement, client should erect a screen of sheets to block air and
light through neighbor’s windows this has to be done well before expiry of 20 years.

41
Easements
Architect’s role in protecting easement rights

• CASE I: To prevent the neighbour from acquiring easement rights by prescription

• SITUATION 1: there are two adjacent plots client has kept his plot vacant ( his neighbor has built ground
floor And first floor. he is receiving light and air from clients plot also through windows on his building. if the
client does not take action to prevent his neighbor from acquiring easement rights, there will be difficulty in
developing his plot in future.

• SITUATION 2: Both have developed their plots to equal height the neighbour is attempting to raise another
floor. Clients should be advised to proceed as described to draw an agreement with the neighbour stating
that:
• No easement rights are claimed by his neighbor against him when he develops his land or builds another
floor as the case may be. Neighbor as a licensee is allowed to enjoy light and air from clients plot on
payment of normal fee
• If the neighbor does not agree for such an agreement, client should erect a screen of sheets to block air and
light through neighbor’s windows this has to be done well before expiry of 20 years.

• CASE II: Preservation of preservative rights of easement

• When the dominant tenement is demolished, for construction of a new building, if the position and size of
windows are same as before, there may not be any problem. If they are altered, it is to be proved that no
additional burden is imposed on servient owner
42
Easements
Architect’s role in protecting easement rights

• CASE III : Hurrying construction when injunction is anticipated:

• When a party’s legal rights are interfered, he approaches the court to grant injunction to safeguard against
future injuries and to maintain existing state of affairs. Injunction may be interim for a specified period or
permanent or mandatory.
• Mandatory warning is granted when it is not possible to assess damages or when easement rights are
interfered. In spite of this, if the work is completed and if the court cannot assess damages the court may
order mandatory injunction whereby the person is required to pull down and restore the building to its
original condition

43
Easements
Laws related to Property and Land: Land tenure, types of land holdings.

• Land is a valuable asset, and every piece of land is unique. Especially developed land, as it needs
investment and infrastructure. Hence, the value of developed land always appreciates. Especially that of
freehold land without encumbrances (government policies, change of land use, etc can affect land value)
• The land and building have two types of tenures FREEHOLD TENURE and LEASEHOLD TENURE

FREEHOLD TENURE LEASEHOLD TENURE

• The best form of ownership is • A lease of immovable property is a transfer of rights to enjoy
freehold ownership such property, made for a certain time, expressed or implied or
• In freehold ownership, the in perpetuity as consideration of price paid or promised or of
ownership is absolute. value, to be rendered periodically or on specified occasions to
• The owner enjoys a such terms
continuous possession of his • This is a common form of restricted ownership
property • A property is a bundle of rights and lease is a division of bundle
• The owner can sell, develop of rights .
and create mortgage. • It is the outcome of rightful separation of ownership and
• The owner may use, rent or possession
grant lease. • Lease agreement is drawn for a specific period for a
• After the expiry of lease consideration
period, owner gets back the • Lease hold properties are valued for the unexpired portion of
physical possession of the lease period Normal duration of lease period is 21, 50 or 99
land/property years 44
Easements

Laws related to Property and Land: Land tenure, types of land holdings.

• TENURE: Tenure indicates terms and conditions under which a property consisting of land or land and
building can be owned
• LESSOR AND LESSEE: The one who transfers his right to enjoy the property is called lessor and the one to
whom the right is given is called lessee.
• REVERSION: It indicates the right to repossess the property at the end of lease period
• PREMIUM: It is the lumpsum consideration paid for transfer of rights in a property
• LIFE LEASE: If the lease of the property is up to lifetime of an individual, it is known as life lease; on the
death of the lessee the property reverts to lessor
• COVENANT: It has been defined as clauses which define responsibilities obligations and rights inclusive of
yielding and paying in the lease deed between lessor and lessee
• OCCUPATION LEASE: Whole property including land and building is given on lease with consideration of
periodic payment called “rack rent”. Duration of lease is short 5, 7, 14, 21,99 years.
• BUILDING LEASE: Open plot of land is leased on a consideration of periodic payment known as ground
rent. The lessee will improve the land at his own cost by putting up the construction at a time. Minimum cost
of building is specified in the lease deed to ensure that rent is secured. 14
Easements
Types of Land Holdings

The types of land ownerships are determined by various factors like the cultural, social, political and economic
factors. These systems are not stagnant & instead they continue to change with the change in time
a.State ownership of land:
• This system enables the state to be the owner of the land. The land which the state owns comes under its
supervision through various methods.
• Annexation of land during battles, purchasing of land by someone, giving land as a gift to someone, the
seizure of land by the government due to certain reasons are the various ways by which a piece of land
comes under the ownership of the state.
• The advantage of the state ownership of land is that it minimizes the discrepancy in the distribution of land
as private ownership of land leads to the uneven distribution of land.
• Even the land which is of no use to the people can be transferred to the government's stock.
• The state owned banks are sometimes leased out to the tenants and in other times the state government
indulges in farming the land.

Land grants:
• This system where land is awarded as a grant by the government to a religious or social institute.
• Ex: Land belonging to the Waqf.
• Usually the government of that country bears all the costs regarding the land and the beneficiary receives
an irrevocable piece of land. The profit is obtained by the institution that is established on the land.

15
Easements
Types of Land Holdings

b. Communal and collective ownership:

• This kind of ownership empowers a community or a political group to utilize the land.
• Private ownership results in the loss of property on the part of the poor people hence, in the countries
which had adopted the socialist doctrine, collectivization of land was in trend.

Private ownership of land:

• In many democratic countries, this method of land ownership is followed.
• The right of land disposition is in private hands.
• Private ownership has two classifications according to the amount of land available to people. They are:
Small land holding is usually the plot of land which belongs to a particular family and it practices farming on
that land and produces the amount which is required to sustain themselves.
Large land holding is usually a plot of land which is rented out by the owner to several farmers who till the
land and produce crops. Those farmers pay rent to the owners.
• Farm tenancy is yet another method which is commonly practiced in the name of land ownership. A person
who has enough land to be cultivated lends it to other people for a given period of time.
There are five kinds of Land Holdings in India, depending on various sizes as follows:
• Marginal holdings: Size - 1 hectare or less
• Small holdings: Size - 1 to 2 hectares
• Semi medium holdings : Size - 2 to 4 hectares
• Medium holdings: Size - 4 to 10 hectares
• Large holdings: Size - above 10 hectare
Maximum number of operational land holdings in India is marginal holdings. 16
Easements
Land Registration

If the value of the land or the property exceeds INR 100, it needs to to undergo land registration. Section 17 of
the Registration Act, 1908 governs property and land registration in India. Typically, specific stamp duty needs
to be paid, and 1% registration charges need to be paid.

Documents required for land registration

• When you go to the sub-registrar's office, you would need to submit the following documents for property
registration:
• Sale deed on non-judicial stamp worth the deal value.
• Proof of Identities such as Passport, Aadhar Card, Voter ID Card, PAN Card, or Driving License.
• E-stamp paper, E-Registration fee receipt, and proof of payment to the seller.
• Copy of the latest property register card.
• Copy of the municipal tax bill.
• Copy of No Objection Certificate (NOC), if required.

48
Easements
Covenant

With leasehold covenants, a covenant regulates the use of land in some way. Freehold covenants refer to an
obligation on an owner of the land to do something, or take some ‘positive’ action. A basic way of
understanding a covenant is that it is a contract between landowners to do or not to do something on the land.
There are four key distinctions to consider when attempting to determine whether a covenant is binding on a
new owner of land:
1. The ‘running’ of the burden. The ‘burden’ of a covenant refers to the land which has the obligation to do, or
not to do in the case of restrictive covenants, something.

2. The ‘running’ of the benefit There are four clear requirements:

• The covenant must ‘touch and concern’ the land
• The covenantee must hold a legal estate in the land on the date of the covenant
• The buyer of the land must derive their title from the original covenantee
• The benefit must have been intended to run with the land at the date of the covenant

3. The rules of the common law

4. The rules of equity

49
Easements
Trespass & Nuisance
Trespass is a direct, unreasonable physical interference into another’s possession of land/ property/goods,
though maybe unintentional. While nuisance is an injury to some right accessory to possession but no
possession itself .
For example: a right of way or light is an incorporeal right over property not amounting to possession of it, and
hence disturbance of it is a nuisance and not trespass
If person x enters the house of person y, without his permission and his knowledgeeven though there was no
wrong intention on his Part, person x can be held liable for trespass

Trespass can be both civil and criminal depending on the nature of the act being done like where a person
negligently enters the premises of other can be liable for civil trespass, but where the person enters the
premises of other with the wrongful intention of committing theft then he can be held liable for criminal
trespass.

Trespass is actionable per se, while nuisance is actionable only on proof of actual
damage it means trespass and nuisance are mutually exclusive. Simple entry on another’s property without
causing him any other injury would be trespass; in nuisance, injury to the property of another or interference
with his personal comfort or enjoyment of property is necessary
They may overlap when the injury is to possessory as well as to some right necessary to possession e g
trespass of cattle discharge of noxious matter into a stream and ultimately on another’s land.
If interference is direct, the wrong is trespass, if it is consequential, it amounts to nuisance e g planting a tree
on another’s land is trespass, whereas when one plants a tree over his own land and the roots or branches
project into or over the land of another person, act is nuisance. 19
Easements
Essentials of Nuisance
• Wrongful acts
• Damage or loss or inconvenience or annoyance caused to another
• Nuisance can be of two types

1.Public nuisance- This means to commit nuisance or cause discomfort to the public/ the community along
with jeopardizing their health, Safety and convenience e g carrying on trades that create offensive smells,
intolerable noises, keeping inflammable substances in large quantities like gunpowder

2.Private nuisance- Private nuisance is the using or authorizing the use of one’s property, or of anything
under one’s control, so as to injuriously affect an owner or occupier of property by physically injuring his
property or affecting its enjoyment by interfering materially with his health, comfort or convenience.

51
General Law
What is Law?
Law is a system of rules that a society or Government develops in order to deal with crime, business
agreements and social relationships.
In the Constitution of India, every citizen has been given several rights and since rights are provided, there will
be infringement of those rights as well. Our legislature has introduced various laws to enforce and protect such
rights, in order to civilize the society and maintain peace and harmony among the individuals.

“Law” includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in
the territory of India the force of law. Law in itself has a very broad It may be in the form of an act,
ordinance, order, by-laws, rule , regulation etc.,
Article 13 of the Indian Constitution
TYPESAND SOURCES OF LAW

Statutory law Written or codified law such as legislative acts,declaring,commanding, or prohibiting something

Common or case law The body of law made up by judicial opinions and precedents

Civil law (private law) Deals with noncriminal suits brought to protect or preserve a civil right or manner (ex: contracts, marriages, wills,
etc.)
Criminal law Regulation and enforcement of rights setting the acceptable limits of conduct in society

Equity law Remedial or preventative law like a restraining order -for cases not covered by common law

Administrative law Includes rules or laws established by agencies such as the IRS, social security or branches of the military
52
General Law
What is Criminal Law?
• Criminal law is enforced by the police. Instances like homicide, rape, assault, theft are dealt under criminal
law.

• Offences that are dedicated towards any particular person and seen as being harmful towards all people,
though it doesn’t come under the criminal law. For example, if the house is burgled then the theft is towards
the person, however, it threatens all house owners as a result of they may have burgled their homes. As a
result of the view is taken that everyone is threatened by the crime.

• This law is handled by the public services and not by private investigators.

What is Civil Law?

• The civil law is a law that looks at actions that aren’t the crime. It’s a part of the law dealing with disputes
between organizations and people.
• It covers totally different areas like defamation, custody of youngsters, divorce, commerce union
membership, property disputes, possession points, copy proper, insurance coverage claims and many
others.
• For instance, An individual by pressure takes over another person’s property with out his/her permission or
does not vacate it.
• One firm suing another over a trade dispute
• Car crash victims claims from the driver for loss or injury sustained in an accident.
53
General Law
What is Common Law?
• The Common Law also referred to as case law or Judicial precedent or judge-made law is a section of the
law which is derived from the judicial determination of courts and comparable tribunals.
• Because the identity suggests it’s common to all.
• Lower courts may choose to overturn the precedent; however, this not often happens.

What is Statutory Law?

• Statute or Statutory Law is a law established by an act of the legislature that’s signed by the executive or
legislative body. For state law, the acts are handled by the state legislature and signed by the state
governor. In rare circumstances, the chief (President or governor) could refuse to signal the invoice or
reject it, which is named a “veto.”
• A legislature is a type of deliberative assembly with the power to pass, amend, and repeal laws. It
originated while setting up of democratic government.
• The reason for its development in a certain kind of government is because its application is possible in the
presence of a governing body.
• Legislations are also known as statutory laws and they can be set down by the national, state legislature or
local municipalities.
• The legislation is considered as a primary source of law in India, legislation has a wide ambit and it is used
to regulate, authorize, to enable, to provide funds, to prescribe, to sanction, grant, declare or to restrict. The
legislature is framed by the parliament in the form of new acts, new laws, repeal and amendment of
old laws. The procedure for this is prescribed in the Constitution of India
54
General Law
Bill ACT
1. A 'bill ' can be considered as initial stage of Once the Bill has been passed by the legislature, it is sent
an act. Bill is a proposal to make a new to the President or the Governor, as the case may be for
law. Usually, bill is in the form of a the approval. By receiving his/her assent, it becomes an
document that summaries what is the Act. An Act is a law which is made by the legislature like
policy behind the proposed law and what is Parliament or State Legislative Assembly.
to be the proposed law.
2. A Bill can be introduced by government Ordinance
itself or proposed by a member of the • An ordinance is also a “Law” but without being subject
Parliament to the discussion and deliberation in both the houses of
3. The Bill is placed in the lower house of the the Parliament. The President can in consultation with
parliament and after discussions once it the Cabinet, pass a law in the form of Ordinance.
has been passed, the Bill goes to the • They enable the Indian government to take immediate
Upper house for approval. Once the bill legislative action. Ordinances cease to operate either if
gets passed by the upper House it is sent Parliament does not approve of them within six weeks
to the President for his assent. of reassembly, or if disapproving resolutions are passed
4. In some cases it has to be ratified by the by both Houses. It is also compulsory for a session of
half of the State legislatures before it Parliament to be held within six months.
receives the Presidential assent. • The fundamental reason for bestowing the executive
5. Finally, a bill becomes a law (Act) of the with the power to issue ordinance is to deal with
land once it has been passed by the situations where an emergency in the country
parliament and also got assent from the necessitates urgent action.
President
55
General Law
Bye Law
• Bye law is any rule or law made by any authority for its proper functioning or its regulation. Bye laws can be
made by some higher authority for the lower authority. Local authorities also can make bye laws.
• Parliament gives the authority to make laws for their regulation to the local authorities. These laws or rules
are called bye laws.
• When an Act passed by the Legislative or Parliament provides for framing of rules by a particular authority
in order the further the provisions of an Act, the rules made by such authority under delegated powers are
called by law.
Rules Regulation

The rules are the standard set of instructions made for Regulations can be defined as the rules which are
people, which explains that how things are to be done. authorized by the Government and approved by
the public.
The rules should be followed by the public as they are They are made after taking into consideration the
made for the welfare of them. Under the Constitution of whole public at large, and so they must be followed
India, there exists Law, which includes many Acts, after that by them
comes regulations and finally rules. Non-compliance of any
rule can cause a little effect.
Rules tell us what to do and what not to do. It can be set Violation of any regulation may cause severe
up for home, hospital, institution, college, office, school, etc penalty or punishment or both.

In the parliament, when both the houses pass a bill

it becomes an Act, and on the basis of the Act,
regulations come into force 56
General Law
Bye Law

Basis of Rules Regulation

Differentiation

Meaning The rules are the set of Regulations are the rules which are
instruction which tells us authorized by the legislation.
the way things are to be
done.
Nature Flexible Rigid

Made as per Conditions and ACT

Circumstances
Set by Individual and Organization Government

57
General Law
Equity Law
• Equity itself is derived from a Latin word which means Justice and egalitarianism
• As a branch of the legal system Equity refers to the essence or rules arising from the administration
process of justice specifically in those cases where the areas are not adequately covered by statute. Equity
besides supplements the law with quintessence of liberty and goodwill

General Principles of Equity Law

He who seeks equity must do equity:
• This maxim clearly shows a directive on the applicant of equity. Here the maxim mainly put its main source
on the rectitude of the court.
• Equity follows the Law: This maxim means that the equity does not violate the law. It follows the
appropriate form of law.
• Equity will not be a wrong to be with or without a remedy: This maxim states that it is developed as
common law which basically doesn’t lay down any new remedies but it has only nominal damages.
• Equality is equity: This maxim means that when two or more parties have their common interest but due
to some specific reason their interest has not been qualified, then the equity as a source may divide their
interest equally.

58
General Law
Equitable Remedies
There are some remedies available by the court of law mainly for the plaintiff just to compensate for the
damages he has suffered from. Some of them are:
1. INJUNCTIONS: It is a type of remedy in which the court provides the certain law and order which the
parties are pressured to do or abstain from doing a certain specific task.
2. SPECIFIC PERFORMANCE: In this type of remedy, the court passes a statement to the parties in order to
fulfil certain tasks which are interlinked or already a part of a contract.
3. RECESSION: This remedy alternatively takes back the parties to their normal position as they were in
before entering the contract.
4. RECTIFICATION: In this type of remedy court orders to rectify or make certain changes in the written
document so that to reflect what is actually said on the first page.

59
General Law
Role of Court

60
General Law
REAL ESTATE REGULATORY AUTHORITY (RERA)

RERA stands for Real Estate Regulatory Authority came into existence as per the Real Estate
(Regulation and Development) Act, 2016 which aims to protect the home purchasers and also boosts the
real estate investments. The bill of this Parliament of India Act was passed on 10 March 2016 by the
Upper House (Rajya Sabha). The RERA Act was effective on and from 1 May 2016. At that time, out of
92 sections only 52 were notified. All the other provisions were effective on and from 1 May 2017

• The Real Estate (Regulation and Development) Act, 2016 under Section 84 envisions that within a
period of six months from its commencement date, State Governments will set the rules to carry out
the provisions associated with the Act.
• On 31 October 2016, the centre, through HUPA (Housing & Urban Poverty Alleviation) Ministry,
released the general rules of the Real Estate (Regulation and Development) Act, 2016.
• All these rules are applicable to the Union Territories like Chandigarh, Lakshadweep, Daman & Diu,
Dadra & Nagar Haveli and Andaman & Nicobar Islands

61
General Law
REAL ESTATE REGULATORY AUTHORITY (RERA)

SOME POINTS UNDER REAL ESTATE REGULATION AND DEVELOPMENT (RERA)

1. Security: Under the RERA act, a minimum of 70% of the buyers’ and investors’ money will be kept in a
separate account. This money will then be allotted to the builders only for construction and land related
costs. Developers and builders cannot ask for more than 10% of the property’s cost as an advance
payment before the sale agreement is signed

2. Fairness: RERA has now instructed developers to sell properties based on carpet area and not super
built up area. In the event that the project has been delayed, buyers are entitled to get back the entire
money invested or they can choose to be invested and receive monthly investment on their money.

3. Transparency: Builders are supposed to submit the original documents for all projects they undertake.
Builders are not supposed to make any changes to the plans without the consent of the buyer.

4. Quality: The builder must rectify any issue faced by the buyer within 5 years of purchase. This issue must
be rectified within 30 days of the complaint

5. Authorization: A regulator cannot advertise, sell, build, invest, or book a plot without registering with the
regulator. After registration, all the advertisement for investments should bear a unique project wise registration
number provided by RERA

62
General Law
Features of RERA
Was established to enhance accountability and transparency with respect to housing transactions and real
estate.
•Establishment of Real Estate Regulatory Authority in every Indian state in order to monitor as well as
adjudicate and arbitrate any disputes with respect to real estate projects in the concerned state
• Establishment of a fast-track mechanism for settlement of disputes. This will be done via an appellate
tribunal and dedicated adjudicating officers.
•All real estate projects must be registered with RERA so that the authority will have jurisdiction over the
projects. The registration of a particular project can be rejected by the authority if guidelines have not been
adhered to.
•In case a promoter wishes to transfer or assign a majority of the rights and liabilities in a real estate project to
a third party, written consent from two-thirds of the allottees will be needed in addition of the written approval of
RERA.
If there is any default from the side of the buyer or promoter, both will be liable to pay an equal rate of interest.
• If the promoter causes any losses to the buyer due to other people laying claim to property (defective title of
land) which is under construction or has been constructed, the promoter will have to compensate the buyer.
There is no limitation provided by any law currently with respect to the compensation amount.
• If a person has any problems regarding violation of the provisions or rules of this Act by a promoter, buyer, or
an agent, they can file a complaint with RERA.
• While an enquiry is taking place, RERA can stop an agent, promoter, or buyer from continuing any activity
against which a complaint has been raised
• If any of RERA’s decisions regarding a complaint is not satisfactory, the aggrieved party can submit an
appeal before the Appellate Tribunal.
If the promoter fails to follow RERA’s orders, they will have to pay a penalty. This amount could be up to 5% of the evaluated
33
cost of the property
General Law
Features of RERA
If the Appellate Tribunal’s orders are not complied with, a penalty will have to be paid. This can either be
imprisonment for up to 3 years or a fine (up to 10% of the approximate cost of the project), or both
•If a company commits an offence under this ACT, any person who was in charge of the business at the time
of the offence being committed and the company will be held guilty and will be punished.
•No civil court will have any jurisdiction with respect to any matter that comes under RERA or the Appellate
Tribunal’s jurisdiction. As such, no court can grant an injunction with regards to any action taken by RERA or
the Tribunal.
Benefits of RERA
RERA has a number of benefits for the buyer, the promoter, and the real estate agent. These include:
1. Standardization of carpet area: Before RERA the manner by which a builder calculated the price of a
project wasn’t defined. However, with RERA there is now a standard formula that is used to calculate carpet
area. This way, promoters cannot provide inflated carpet areas to increase prices.
2. Reducing the risk of insolvency of the builder: Most promoters and developers tend to have multiple
projects being developed at the same time. Earlier, developers were allowed to move funds raised from one
project to that of another. This is not possible with RERA since 70% of the funds raised need to be
deposited in a separate bank account. These funds can be withdrawn only after certification by an engineer,
a chartered accountant, and an architect.
3. Advance payment: As per the rules, a builder cannot take more than 10% of the cost of the project from
the buyer as advance or application fees. This saves the buyer from having to source funds fast and having
to pay a large amount
4. Rights to the buyer in case of any defects: Within 5 years of possession, if there is any structural defects
or problems in quality, the builder has to rectify these damages within 30 days at no cost to the buyer 34
General Law
Benefits of RERA
5. Interest to be paid in case of default: Prior to RERA, if the promoter delayed possession of the property,
the interest paid to the buyer was much lower than if the buyer delayed payments to the promoter. This has
changed with RERA and both parties have to pay the same amount of interest.
6. Buyer’s rights in case of false promises: If there is a mismatch in terms of what was promised by the
builder and what has been delivered, the buyer is entitled to a full refund of the amount that was paid as
advance. At times, the builder may have to provide interest on the amount as well.
7. If defect in title: If at the time of possession, the buyer discovers that there is a defect in the title of the
property, the buyer can claim compensation from the promotor. There is no limit to this amount.
8. Right to information: The buyer has the right to know all the information about the project. This includes
plans related to layout, execution, and completion status.
9. Grievance Redressal: If the buyer, the promoter, or the agent has any complaints with respect to the
project, they can file a complaint with RERA. If they aren’t pleased with RERA’s decision, a complaint can
also be filed with the Appellate Tribunal.
Carpet Area defined under RERA
The Real Estate (Regulation and Development) Act, 2016 has mandated the developers on how to sell their
apartments depending on the carpet area.
• According to the Act, carpet area is the total area of the floor that can be used within the walls of the
apartment. This does not include areas like open terrace, shafts, balconies, etc.
•This normalization of the carpet area definition will ensure that buyers are not mislead by the unlawful
promoters.
•Using the standard for carpet area will ensure that there is a certainty on the usable area. This also helps in
the analysis of cost per square feet. Comparison between the different projects also becomes easier. 65
General Law
HOW TO ENSURE THAT THE PROPERTY IS RERA COMPLIANT?
Things that must be considered to understand if a property is RERA compliant are:
• If the area of the property is more than 500 square meters, the builders should register it under RERAAct
before launching or advertising a project on that particular property.
• Builders must provide proof that 70% of the total payment has been deposited by them into a discrete
account instead of using it for some other investment.
• Builders must get all the necessary consents before advertising a new project.

For Builder Offence Penalty

Non-compliance with RERA Daily penalty up to 5 % of the approximate cost of the project
Non-compliance with the Imprisonment up to 1 year or 10% of the approximate cost of
Appellate Tribunal the project, or both
For Promoters Non-registration 10% of the project’s estimated cost
Giving false information 5 % of the project’s estimated cost.
Violation of laws Up to 3 years’ imprisonment or a fine of 10% of the estimated
cost of the property, or both
For Agents Non-registration Rs.10,000 per day up to 5 % of the approximate cost of the
project
Non-compliance with RERA Daily penalty up to 5 % of the project’s estimated value

Non-compliance with the Imprisonment up to 1 year or 10% of the project’s estimated

Appellate Tribunal cost, or both 66
General Law
DOCUMENTS REQUIRED TO REGISTER A PROJECT UNDER RERA
• Income tax returns of the promoter for the last 3 years.
• Audited balance sheet, profit and loss account, and auditor report of the promoter.
• Promoter’s PAN Card and a copy of their Aadhaar Card. If there is more than one promoter, then PAN Card and Aadhar Card
copies of all the promoters must be provided.
• Passport size photograph of the promoter. If the promoter is a firm or a company, then photos of all the members including the
director and chairman need to be attached.
• The legal title deed and any other relevant document which has been authenticated. These documents should reflect all legal
rights that the promoter has over the land. If this is not available, the promoter should provide a non-encumbrance certificate.
This needs to be procured from a revenue authority who is not below the rank of a Tehsildar.
• If the promoter is not the owner of the land on which the project is being developed, a copy of the collaboration agreement
along with the consent of the owner needs to be provided.
• The layout plan and sanctioned plan of the project which has been approved.
• A plan of all the facilities to be provided. This includes drinking water facilities, fire-fighting facilities, usage of renewable
energy, and evacuation facilities.
• All location details regarding the project. This should include boundaries of the proposed project down to the latitude and the
longitude.
• An estimated invoice with details which include the sale agreement and conveyance deed proposed.
• The carpet area, number of apartments, open terrace area, and balcony area, if any.
• Details of the number of garages for sale and open parking areas available.
• Names and addresses of real estate agents (if any).
• Names and addresses of structural engineers, architects, contractors, and any other person involved with the development of
the project.
• Declaration under Form B. This declaration states that the promoter or anyone authorized by the promoter cannot
discriminate during allotment of the project.
• Any other document required by the state in which you are registering the project
67
 General Law
This Act was enacted by the British with the definite objective of building infrastructure like railways, post
and telegraph lines, roads, bridges, canals, communication network and means to transfer their army and
weaponry to different parts of the country.
LAND ACQUISITION, REHABILITATION

• Their basic intention was to extend, control and further consolidate their rule throughout the country.
Hence, land belonging to rural landowners was acquired under the Act.
• The ownership and control of the infrastructure and communication network built after land acquisition
AND RESETTLEMENT ACT 2013

remained completely with the Government for utilization in public purpose

After independence, the process of acquisition of land from farmers for building steel plants, fertilizer
plants, defence related plants and dams (number of villages were submerged to create dams) continued,
all for public purposes
Thereafter, the government entered into housing, urban development and industrial sector and resorted to
acquisition of land from farmers for developing housing colonies, laying electricity poles, and industries. All
these activities were for public purposes
The process of land acquisition by the central or state government of India for various
infrastructure and economic growth initiatives
Public Purpose MEANS
Strategic purposes
Industry & Infrastructure
Land acquired for R&R purposes
Planned development - residential purpose for poor, educational & health schemes
Land for private companies for public purpose
Needs that arise from natural calamity 68
 General Law

Drawbacks of Land Acquisition ACT 1894

• Urgency clause
• No provision for Rehabilitation and Resettlement
LAND ACQUISITION, REHABILITATION

• Low Rates of Compensation

• Forced Acquisition
AND RESETTLEMENT ACT 2013

THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION

& RESETTLEMENTACT 2013

69
 General Law
THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION
& RESETTLEMENTACT 2013
Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act,
2013 is also called land acquisition act 2013 and was brought to replace Land Acquisition Act of 1894,
LAND ACQUISITION, REHABILITATION

enacted during British era.

However, the act was mired into controversies mainly because of lack of specific definition of public
purpose, thereby, extending even it to the extent of establishment of business-cum-leisure tourism
AND RESETTLEMENT ACT 2013

infrastructure center like villas, golf course, hotels and banquet halls.
The new act seeks to establish a cohesive national law that dealt with the compensation, rehabilitation and
resettlement issues arising out of process of land acquisition. The aims and objectives of the act are:
• The acquisition process is carried out in consultation with local selfgovernment and gram sabhas,
thereby; ensuring least disturbance is caused to the owners of the land and other affected families.
• To ensure that fair compensation is provided to the affected families.
• Make adequate provisions for the rehabilitation and resettlement.
• In case of compulsory acquisition, endeavour should be made that the affected persons are made
partners in development to ensure a smooth rehabilitation process for them post acquisition.
The Act is applicable when:
• Government acquires land for its own use, hold and control, including land for Public sector
undertakings.
• Government acquires land with the ultimate purpose to transfer it for the use of private
companies for stated public purpose.
• Government acquires land for immediate and declared use by private companies for public purpose
40
 General Law
Consent Clause Emergency acquisition Compensation Social Impact Assessment
• When • Under this the land acquisition • It will be four times the • Before the acquisition process
government can be expedited if it relates market value of land in rural starts the government has to
LAND ACQUISITION, REHABILITATION

acquires the land to national defence, security areas and twice in urban carry out a social impact
directly for „public and rehabilitation of affected areas. study along with
purpose‟ consent people from natural disasters or • The market value of the land consultation involving local
of the land owner emergencies will be set as higher of: authorities viz. Gram Sabha,
AND RESETTLEMENT ACT 2013

is not required. minimum land value, if Municipality.

• However, when Limits on acquisition any,specified in the Indian • The purpose of the study is to
the government • The act does not allow Stamp Act, 1899 or average of make public the intended
acquires the land acquisition of land under the sale price for similar type „public purpose‟, the people
for private multi cropped area. of land being acquired,. . affected, extent of acquisition
companies, the • The act also mandates that in etc.
consent of at case of acquisition of multi • The report is submitted to an
least 80% of the cropped area under exceptional
Provision for SC/ST expert committee who can
project affected circumstances, an equivalent • Their land will be acquired after due consideration can
families shall be area of cultivable wasteland only under exceptional also disapprove the project. But
obtained through shall be developed by the circumstances and that too the government can override
a prior informed state for agricultural with the prior consent of Gram the disapproval of the
process. purposes. Sabha or Autonomous District committee.
• In case of • In case of acquisition of other Councils in fifth schedule.
acquisition of agricultural land, total • Moreover, development plan
land for public- acquisition should not exceed have to be launched within
private project the limit as specified by an 5 years to ensure their
then the appropriate authority. livelihood is not affected.
consent of at • These limits shall not apply to • Also, one-third
least 70% of the linear projects which include compensation will be
affected families projects for railways, highways, provided before acquisition
should be taken major district roads, power and rest after the process is
lines, and irrigation canals completed. 41
 General Law

Land Left Unused After Acquisition

• Land acquired for one purpose cannot be used for another purpose under section 99.
LAND ACQUISITION, REHABILITATION

• However, if the land is rendered useless for the originally notified purpose, the appropriate
government may use it for another purpose.
• If the land acquired is not utilized within a period of five years from the date of five
years from the date of taking possession, it shall be redelivered to the original owner.
AND RESETTLEMENT ACT 2013

Criticism Of Law
• Complex procedure for acquisition
• High cost of acquisition
• Consent of affected families
• Exemption to 13 acts. .

42
 General Law

• The Consumer Protection Act, implemented in 1986, gives easy and fast compensation to consumer
grievances. It safeguards and encourages consumers to speak against insufficiency and flaws in goods and
services. If traders and manufacturers practice any illegal trade, this act protects their rights as a consumer.
The primary motivation of this forum is to bestow aid to both the parties and eliminate lengthy lawsuits.
• This Protection Act covers all goods and services of all public, private, or cooperative sectors, except those
exempted by the central government. The act provides a platform for a consumer where they can file their
complaint, and the forum acts against the concerned supplier and compensation is granted to the consumer
CONSUMER PROTECTION ACT

for the hassle he/she has encountered.

Consumer Rights
1. RIGHT TO SAFETY- Before buying, a consumer can insist on the quality and guarantee of the goods.
They should ideally purchase a certified product like ISI or AGMARK.
2. RIGHT TO CHOOSE- Consumer should have the right to choose from a variety of goods and in a
competitive price.
3. RIGHT TO BE INFORMED- The buyers should be informed with all the necessary details of the
product, make her/him act wise, and change the buying decision.
4. RIGHT TO CONSUMER EDUCATION Consumer should be aware of his/her rights and avoid
exploitation. Ignorance can cost them more.
5. RIGHT TO BE HEARD- This means the consumer will get due attention to express their grievances at
a suitable forum.
6. RIGHT TO SEEK COMPENSATION- The defines that the consumer has the right to seek redress
against unfair and inhumane practices or exploitation of the consumer. 43
 General Law
Consumer Responsibilities

• RESPONSIBILITY TO BE AWARE – A consumer must be mindful of the safety and quality of products
and services before purchasing.
• RESPONSIBILITY TO THINK INDEPENDENTLY–Consumer should be well concerned about
• what they want and need and therefore make independent choices.
• RESPONSIBILITY TO SPEAK OUT- Buyer should be fearless to speak out their grievances and tell
traders what they exactly want
• RESPONSIBILITY TO COMPLAIN- It is the consumer’s responsibility to express and file a complaint
CONSUMER PROTECTION ACT

about their dissatisfaction with goods or services in a sincere and fair manner
• RESPONSIBILITY TO BE AN ETHICAL CONSUMER- They should be fair and not engage themselves
with any deceptive practice.

44
 General Law
ESTABLISHMENT OF CENTRAL CONSUMER PROTECTION AUTHORITY

Under the Act of 2019, a Central Consumer Protection Authority (CCPA) was established with a view to regulate
matters involving violation of consumer rights, misleading or false advertisements, unfair trade practices and
enforcement of consumer rights. The Central Government will appoint the members of the CCPA. The authority
will consist of a Chief Commissioner along with other such prescribed members.

The 2019 Act specifies the functions of the CCPA and who will appoint its members. However, there is
CONSUMER PROTECTION ACT

ambiguity as to how the CCPA will perform its functions and what methods will it adopt to achieve its functions.
There is also no specification of qualification for the recruitment of the members of the CCPA. Further, the
appointment of members of the CCPA by the Central Government will affect the independence of the authority.
The consumer may be at a disadvantage in a dispute where the government has provided deficient services.

PENALTIES FOR MISLEADING ADVERTISEMENT

Misleading and false advertisements is one of the many aspects that were introduced by the 2019 Act. The
repealed Act did not deal with the concept of misleading and false advertisements. Misleading advertisement is
defined under Section 2(28) of the Act and includes any advertisement, which gives false description of a
product or service, gives false guarantee misleading the consumers, conveys express representation
constituting unfair trade practice and deliberately not revealing essential information about the product.
Under Section 21(4) of the Act, any person who publishes false and misleading advertisements may be
punished with imprisonment or a penalty that may extend up to ten lakh rupees. Further, Section 21 (3)
states that the CCPA can prevent the endorser of any such misleading and false advertisements from
endorsing any other products or services for a period of one year. The issuer of any misleading advertisements
shall also be liable to neutralize the effect of such advertisements. 45
 General Law
Product Liability

• Product Liability is one of the remarkable and significant steps incorporated in the 2019 Act. An entire
chapter under the Act is dedicated to deal with this concept. A complainant can bring a product liability action
against any product manufacturer or service provider or a seller in case any harm is suffered by him due to a
defective product or service.
• A product manufacturer will be held liable under Section 84 of the Act in case the product has a
manufacturing defect, defective in design, does not follow the manufacturing specifications, does not
conform to implied warranty and does not contain adequate instructions for proper usage of the product.
CONSUMER PROTECTION ACT

• Section 85 of the Act discusses the liability of the service provider in a product liability action. To be liable
under this section, the service provided shall be deficient, faulty, inadequate or imperfect, an act or
negligence withholding any information responsible for the harm caused, without adequate warnings and
instructions and without conformation to express warranty or contractual terms.
• A product seller will be liable in a product liability action if there is exercise of substantial control over
manufacturing, testing, designing, labelling or packaging of the product. There was substantial alteration or
modification responsible for the harm caused. The product seller made express warranty that does not
conform to the warranty made by the manufacturer. The product seller failed to take reasonable care in
maintaining, assembling or inspecting the product.

46
 General Law
EXCEPTIONS
• There are certain exceptions to product liability action as well. These exceptions are discussed in Section 87 of the
2019 Act.
• Any consumer who himself misuses, alters or modifies the product and suffers harm as a result, cannot file a product
liability claim.
• A consumer cannot bring product liability action in case the product manufacturer has given adequate warnings for
use of the product, the product purchased was used as a part of another product and the end use caused damage.
•
CONSUMER PROTECTION ACT

The product was supposed to be used under an expert's supervision or the product was used under alcohol
influence.
• A product manufacturer will not be liable for not warning about any danger that is commonly known or obvious.
• CONSUMER DISPUTE REDRESSAL FORUMS Jurisdiction
• TERRITORIAL JURISDICTION: A complainant can now file a complaint where he resides or works. The
repealed act only allowed the complainant to file a complaint where the opposite party carries out business or
resides. This caused a lot of difficulties to the complainants.
• PECUNIARY JURISDICTION: the pecuniary jurisdiction will now be determined based on the consideration
paid for the value of goods purchased and services availed, rather than the compensation claimed as per the
repealed act of 1986. The pecuniary jurisdiction limit has also been increased for the various commissions
under the 2019 act. The district commission will now deal with cases of up to Rs. 1 crore, up from Rs. 20
lakhs as per the repealed act. The state commission's pecuniary jurisdiction limit has been fixed between Rs.
1 crore to Rs. 10 crores and the national commission will deal with cases with pecuniary limit of Rs. 10 crores
or more.
47
 General Law
Alternate Dispute Resolution

• If it appears to the Consumer Dispute Redressal Forum that the consumer dispute can be settled by way of
mediation, it may refer the parties to mediation with their consent.
• For the purpose of mediation, the State Government shall establish a consumer mediation cell for each
District Commission and State Commission.
• The Central Government shall establish a consumer mediation cell attached to the National Commission.
• The consumer mediation cell will be responsible for maintaining a list of empaneled mediators, cases
CONSUMER PROTECTION ACT

handled by the cell, record of proceeding and other information by specified regulations.
• The cell also must submit a quarterly report to the commission it is attached to.

E-COMPLAINTS
Section 17 of the Act provides that a complaint regarding unfair trade practice, violation of consumer rights
or misleading and false advertisements can be filed in electronic mode also to the District Collector, the
Regional Office Commissioner or the Central Authority

78
 General Law
Foreign direct investment (FDI)

is an investment made by a company or an individual in one country into business interests located in
another country. FDI is an important driver of economic growth.
Generally, FDI is when a foreign entity acquires ownership or controls and has stake in the shares of a
FDI –FOREIGN DIRECT INVESTMENT

company in one country, or establishes businesses there.

It is different from foreign portfolio investment where the foreign entity merely buys equity shares of a
company.
In FDI, the foreign entity has a say in the day-to-day operations of the company. FDI is not just the inflow
of money, but also the inflow of technology, knowledge, skills and expertise/know-how. It is a major
source of non-debt financial resources for the economic development of a country.
• FDI generally takes place in an economy which has the prospect of growth and also a skilled workforce.
• FDI has developed radically as a major form of international capital transfer since the last many years.
• The advantages of FDI are not evenly distributed. It depends on the host country’s systems and
infrastructure.
The determinants of FDI in host countries are:
1. Policy framework
2. Rules with respect to entry and operations/functioning (mergers/acquisitions and competition)
3. Political, economic and social stability
4. Treatment standards of foreign affiliates
5. International agreements
6. Trade policy (tariff and non-tariff barriers)
7. Privatisation policy 79
 General Law
Automatic Route FDI
In the automatic route, the foreign entity does not require the prior approval of the government or the RBI.
Examples:
• Medical devices: up to 100%
• Thermal power: up to 100%
• Services under Civil Aviation Services such as Maintenance & Repair Organizations
• Insurance: up to 49%
• Infrastructure company in the securities market: up to 49%
• Ports and shipping
• Railway infrastructure
• Pension: up to 49%
• Power exchanges: up to 49%
• Petroleum Refining (By PSUs): up to 49%

Government Route FDI

Under the government route, the foreign entity should compulsorily take the approval of the government. It should file
an application through the Foreign Investment Facilitation Portal, which facilitates single-window clearance. This application
is then forwarded to the respective ministry or department, which then approves or rejects the application after consultation
FDI IN REAL ESTATE

with the DPIIT. (Department for Promotion of Industry and Internal Trade)
Examples:
• Broadcasting Content Services: 49%
• Banking & Public sector: 20%
• Food Products Retail Trading: 100%
• Core Investment Company: 100%
• Multi-Brand Retail Trading: 51%
• Mining & Minerals separations of titanium bearing minerals and ores: 100%
• Print Media (publications/printing of scientific and technical magazines/speciality journals/periodicals and a facsimile edition of foreign
newspapers): 100%
• Satellite (Establishment and operations): 100%
• Print Media (publishing of newspaper, periodicals and Indian editions of foreign magazines dealing with news & current affairs): 26%
• Sectors where FDI is prohibited 50
 General Law
There are some sectors where any FDI is completely prohibited. They are:
• Agricultural or Plantation Activities (although there are many exceptions like horticulture, fisheries, tea plantations, Pisciculture, animal husbandry,
etc.)
• Atomic Energy Generation
• Nidhi Company
• Lotteries (online, private, government, etc.)
• Investment in Chit Funds
• Trading in TDR’s
• Any Gambling or Betting businesses
• Cigars, Cigarettes, or any related tobacco industry
• Housing and Real Estate (except townships, commercial projects, etc.).

Benefits of FDI.
• Brings in financial resources for economic development.
• Brings in new technologies, skills, knowledge, etc.
• Generates more employment opportunities for the people.
• Brings in a more competitive business environment in the country.
FDI IN REAL ESTATE

• Improves the quality of products and services in sectors.

Disadvantages of FDI
However, there are also some disadvantages associated with foreign direct investment. Some of them are:
It can affect domestic investment, and domestic companies adversely.
• Small companies in a country may not be able to withstand the onslaught of MNCs in their sector. There is the
risk of many domestic firms shutting shop as a result of increased FDI.
• FDI may also adversely affect the exchange rates of a country..

81
 General Law
Government Measures to increase FDI in India

Government schemes like production-linked incentive (PLI) scheme in 2020 for electronics manufacturing,
have been notified to attract foreign investments.
In 2019, the amendment of FDI Policy 2017 by the government, to permit 100% FDI under automatic route
in coal mining activities enhanced FDI inflow.
Further, the government permitted 26% FDI in digital sectors. The sector has particularly high return
capabilities in India as favourable demographics, substantial mobile and internet penetration, massive
consumption along technology uptake provides great market opportunity for a foreign investor.

FDI inflow is further expected to increase –

as foreign investors have shown interest in the government’s moves to allow private train operations and
bid out airports.
FDI IN REAL ESTATE

82
 General Law
Goods and Services Tax

It is a tax levied when a consumer buys a good or service. It is meant to be a single, comprehensive
tax that will subsume all the other smaller indirect taxes on consumption like service tax, etc.
TAXES APPLICABLE IN ARCHITECTURE

It is a single tax on the supply of goods and services, right from the manufacturer to the end consumer
• This is how it is done in most developed countries. More than 160 countries have implemented this
system of taxation.
• GST does not tax or get into specific commodities.
AND CONSTRUCTION INDUSTRY

Salient features of the GST Bill:

No differentiation between good and services tax. One rate for both goods and services
Simultaneous power upon Parliament and the State Legislatures to make laws governing
goods and services tax;
Tax will be levied on every supply of goods and services.
Subsumes most of the Indirect taxes at state and central level (barring few exceptions listed
below)
Keeping in mind the federal structure of India, there will be two major components of GST –
Central GST (CGST) and State GST (SGST). Both Centre and States will simultaneously levy
GST across the value chain.

83
 General Law
What kind of taxes are paid by architects/construction industry

Under GST, 18% GST would be applicable on all architectural and engineering services rendered in
India. Hence, architects and engineers would have to obtain GST registration and file GST returns.
TAXES APPLICABLE IN ARCHITECTURE
AND CONSTRUCTION INDUSTRY

Surcharge The amount of income-tax shall be increased by a

surcharge at the rate of 7% of such tax, where the total
income exceeds 1 crore rupees but not exceeding 10 crore
rupees and at the
rate of 12% of such tax, where the total income exceeds
10 crore rupees. 89