Monthly Archives: June 2014

Devaluation of Interest of Coparcenary Property under Section 6 of Hindu Succession Act (Amendment) 2005

Section 6 of Hindu Succession Act (Amendment) 2005 which explain the Devolution of Interest in Coparcenary Property in a Joint Hindu family governed by the Mitakshara law, the daughter of a coparcener shall,—

(a) By birth become a coparcener in her own right in the same manner as the son;

(b) Have the Same Rights in the Coparcenary Property as she would have had if she had been a son;

(c) Be subject to the same liabilities in respect of the said coparcenary property as that of a son,

and any reference to a Hindu Mitakshara coparcener shall be deemed to include a reference to a daughter of a coparcener:

Provided that nothing contained in this sub-section shall affect or invalidate any disposition or alienation including any partition or testamentary disposition of property which had taken place before the 20th day of December, 2004.

(2) Any property to which a female Hindu becomes entitled by virtue of sub­-section (1) shall be held by her with the incidents of coparcenary ownership and shall be regarded, notwithstanding anything contained in this Act or any other law for the time being in force in, as property capable of being disposed of by her by testamentary disposition.

(3) Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005*, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and,—

(a) the daughter is allotted the same share as is allotted to a son;

(b) the share of the pre-deceased son or a pre-deceased daughter, as they would have got had they been alive at the time of partition, shall be allotted to the surviving child of such pre-deceased son or of such pre-deceased daughter; and

(c) the share of the pre-deceased child of a pre-deceased son or of a pre­-deceased daughter, as such child would have got had he or she been alive at the time of the partition, shall be allotted to the child of such pre-deceased child of the pre-deceased son or a pre-deceased daughter, as the case may be.

Explanation. —For the purposes of this sub-section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.

(4) After the commencement of the Hindu Succession (Amendment) Act, 2005, no court shall recognise any right to proceed against a son, grandson or great­-grandson for the recovery of any debt due from his father, grandfather or great-grandfather solely on the ground of the pious obligation under the Hindu law, of such son, grandson or great-grandson to discharge any such debt:

Provided that in the case of any debt contracted before the commencement of the Hindu Succession (Amendment) Act, 2005*, nothing contained in this sub-section shall affect—

(a) the right of any creditor to proceed against the son, grandson or great-grandson, as the case may be; or

(b) any alienation made in respect of or in satisfaction of, any such debt, and any such right or alienation shall be enforceable under the rule of pious obligation in the same manner and to the same extent as it would have been enforceable as if the Hindu Succession (Amendment) Act, 2005 had not been enacted.

Explanation. —For the purposes of clause (a), the expression “son”, “grandson” or “great-grandson” shall be deemed to refer to the son, grandson or great-grandson, as the case may be, who was born or adopted prior to the commencement of the Hindu Succession (Amendment) Act, 2005*.

(5) Nothing contained in this section shall apply to a partition, which has been effected before the 20th day of December, 2004.

Explanation. —For the purposes of this section “partition” means any partition made by execution of a deed of partition duly registered under the Registration Act, 1908 (16 of 1908) or partition effected by a decree of a court.]

Statement of Objects and Reasons [The Hindu Succession (Amendment) Act, 2005]

Section 6 of the Act deals with devolution of interest of a male Hindu in coparcenary property and recognises the rule of devolution by survivorship among the members of the coparcenary. The retention of the Mitakshara coparcenary property without including the females in it means that the females cannot inherit in ancestral property as their male counterparts do. The law by excluding the daughter from participating in the coparcenary ownership not only contributes to her discrimination on the ground of gender but also has led to oppression and negation of her fundamental right of equality guaranteed by the Constitution having regard to the need to render social justice to women, the States of Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra have made necessary changes in the law giving equal right to daughters in Hindu Mitakshara coparcenary property. The Kerala Legislature has enacted the Kerala Joint Hindu Family System (Abolition) Act, 1975.

It is proposed to remove the discrimination as contained in section 6 of the Hindu Succession Act, 1956 by giving equal rights to daughters in the Hindu Mitakshara coparcenary property as the sons have.

State Amendment

Sections 6A to 6C

Karnataka:

After section 6 the following sections shall be inserted, namely:

Section 6A. Equal rights to daugher in co-parcenary property.

Notwithstanding anything contained in Section 6 of this Act—

(a) in a joint Hindu family governed by Mitakshara law, the daughter of a co-parcener shall by birth become a co-parcener in her own right in the same manner as the son and have the same rights in the co-parcenary property as she would have had if she had been a son inclusive of the right to claim by survivorship and shall be subject to the same liabilities and disabilities in respect thereto as the son;

(b) at a partition in such a joint Hindu family the co-parcenary property shall be so divided as to allot to a daughter the same share as is allot able to a son:

Provided that the share which a predeceased son or a predeceased daughter would have got at the partition if he or she had been alive at the time of the partition, shall be allotted to the surviving child of such predeceased son or of such predeceased daughter:

Provided further that the share allot able to the predeceased child of a predeceased son or of a predeceased daughter, if such child had been alive at the time of the partition, shall be allotted to the child of such predeceased child of the predeceased son or of such predeceased daughter, as the case may be;

(c) any property to which a female Hindu becomes entitled by virtue of the provisions of clause (a) shall be held by her with the incidents of co-parcenary ownership and shall be regarded, notwithstanding anything contained in this Act or any other law for the time being in force, as property capable of being disposed of by her by will or other testamentary disposition;

(d) nothing in clause (b) shall apply to a daughter married prior to or to a partition which had been effected before the commencement of Hindu Succession (Karnataka Amendment) Act, 1990.

6B. Interest to devolve by survivorship on death.— When a female Hindu dies after the commencement of the Hindu Succession (Karnataka Amendment) Act, 1990, having at the time of her death an interest in a Mitakshara coparcenary property, her interest in the property shall devolve by survivorship upon the surviving members of the co-parcenary and not in accordance with this Act:

Provided that if the deceased had left any child or child of a pre-deceased child, the interest of the deceased in the Mitakshara co-parcenary property shall devolve by testamentary or intestate succession as the case may be under this Act and not by survivorship.

Explanations.— (1) For the purposes of this section the interest of female Hindu Mitakshara coparcenary shall be deemed to be the share in the property that would have been allotted to her if a partition of the property had taken place immediately before her death, irrespective of whether she was entitled to claim partition or not.

(2) Nothing contained in the proviso to this section shall be construed as enabling a person who, before the death of the deceased had separated himself or herself from the co-parcenary, or any of his or her heirs to claim on intestacy a share in the interest referred to therein.

6C. Preferential right to acquire property in certain cases.— (1) Where, after the commencement of Hindu Succession (Karnataka Amendment) Act, 1990 an interest in any immovable property of an intestate or in any business carried by him or her, whether solely or in conjunction with others devolves under sections 6A or 6B upon two or more heirs and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.

(2) The consideration for which any interest in the property of the deceased may be transferred under sub-section (1) shall in the absence of any agreement between the parties, be determined by the court, on application, being made to it in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incidental to the application.

(3) If there are two or more heirs proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred.

Explanation.— In this section ‘court’ means the court within the limits of whose jurisdiction the immovable property is situate or the business is carried on, and includes any other court which the State Government may by notification in the Official Gazette specify in this behalf.

In light of the above, it seems clear that the newly introduced Section 6 would be applicable to all daughters, whether married or unmarried prior to the said commencement date.

The Amendment Act therefore goes a long way towards the establishment of gender equality and abolition of the patrilineal system of inheritance prevailing among Hindus. 

Foreign Direct Investment In Real Estate Government Press Note

Foreign Direct Investment In Real Estate Government Press Note

Guidelines issued by the Department of Industrial policy & promotion SIA (FC Division)

Press Note 2 (2005)

Foreign Direct Investment (FDI) in township, housing build-up infrastructure and construction development project

Foreign Direct Investment in Real Estate in India

The decision to liberalise the FDI norms in the construction sector is perhaps the most significant economic policy decision taken by the Government of India. Until now, only Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) were permitted to invest in the Housing and the Real Estate Sectors. Foreign Investors, other than NRIs, were allowed to invest only in Development of Integrated Townships and Settlements, either through a Wholly Owned Subsidiary or through a Joint Venture Company in India, along with a local partner. However, the guidelines prescribed via Press Note 2 (2005) series, issued by Ministry of Commerce & Industry, have further opened out FDI in Townships, Housing, Built-up Infrastructure and Construction-Development Projects. Major corporations are taking initiative and are wooing international players soliciting investments for major project.

The Department of Industrial Policy and Promotion (DIPP), vide Press Note No. 2 (2005), has permitted FDI up to 100% under automatic route in Townships, Housing, Built-up Infrastructure and Construction Development Projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure facilities, such as roads and bridges, transit systems etc.), subject to the following guidelines:

1. The minimum area to be developed under each project would be as follows:

a) In case of Development of Serviced Housing Plots, a Minimum Land area of 10 Hectares.

b) In case of Construction Development Projects, a minimum built-up area of 50,000 sq.mts.

c) In case of a combination of the above two projects, any one of the above two conditions would suffice.

2. The minimum capitalization norm shall be US$ 10 million for a wholly owned subsidiary and US$ 5 million for joint ventures with Indian partner/s. The funds would have to be brought in within six months of commencement of business of the company.

3. Original investment cannot be repatriated before a period of three years from completion of minimum capitalization. However, the investor may be permitted to exit earlier with prior approval of the Government through the Foreign Investment Promotion Board (FIPB).

4. Development of at least 50% of the integrated project has to be completed within a period of five years from the date of obtaining all statutory clearances. The investor would not be permitted to sell underdeveloped plots (underdeveloped connotes, where roads, water supply, street lighting, drainage, sewerage and other conveniences as applicable under prescribed regulations, have not been made available). The investor must provide this infrastructure and obtain the Completion Certificate from the concerned local body/service agency before being allowed to dispose of the serviced housing plots.

5. The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities as laid down in the applicable building control regulations, by-laws, rules and other regulations of the State Government / Municipal / Local Body concerned.

6. The investor shall be responsible for obtaining all necessary approvals, including those of the building / layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements, as prescribed under applicable rules/bye-laws/regulations of the State Government / Municipal Body / Local Body concerned.

7. The State Government / Municipal / Local Body concerned, which approves the building / development plans, will monitor the developer’s compliance to the above conditions.

Functions of Notary and Validity of Notary Public in India

Notary is person appointed by the Central Government or state Government under Notaries Act, 1952.

Functions of Notary :-

1. To verify, authenticate, certify or attest the execution of any instrument. The word instrument is defined in the Act as every document by which any right or liability is or purports to be, created, transferred, modified, limited, extended, suspended, extinguished or recorded. So every document is not an instrument, unless it confers a right or records a liability. Each word namely verify, authenticate, certify and attest has a different meaning. ‘Verify’ means checking with the facts and proof/evidence produced. ‘Authenticate’ means, the notary has assured himself of the identity of the person who has signed the instrument as well as to the fact of execution. ‘Certify’ means to confirm through a formal statement that the instrument executed possesses certain qualifications or meeting the accepted minimum standards relevant to the contents of the same. Notary is bound to make entry of the notarial act of certifying the copy of the document as a true copy of its original. ‘Attest’ means to affirm to be correct, true or genuine.

2. To administer oath to or take an affidavit from any person.

3. To translate and verify the translation, of any document from one language into another.

4. To act as commissioner, to record evidence in any civil or criminal trial if so directed by the court or authority.

5. To act as arbitrator, mediator, or conciliator if so required.

6. To do any other act which may be prescribed.

Every notarial act has to be done under his signature and notary seal with registered number and date.

The Section 139 of Code of Civil Procedure 1908 has an express provision, in this regard, where any affidavit verified by notary is admissible as evidence. Likewise, Section 297 of Code of Criminal Procedure provides for admission of affidavits verified by the notary.

The Notarial Rules 1956, has prescribed the fee for each category of act. The rule No.10 refers to the fee to be collected by the notary. He should display rates of fee charged in conspicuous space both inside and outside his chamber or office. In addition to the fee, notary may also charge the travelling allowance by train or road at Rs.5 per kilometre.

Amendment of Section 203 and Section 469 of Companies Act, 2013

Amendment of Section 203 and Section 469 of Companies Act, 2013

Kindly check the given attachment which states that Ministry of Corporate Affairs has under Gazette Notification vide GSR No.390(E) dated 9th June, 2014 issued the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2014 which provide that a company other than a company covered under Rule 8 which has a paid up share capital of Rs. 5 crores or more shall have a whole time Company Secretary.