What Should You Do If A Cheque Bounces?

A cheque bounce is among the common financial offences which can land the issuer into legal trouble and damage his or her credit rating. In India, the number of pending court cases relating to cheque bounce offences is huge. A cheque is bounced if the issuer writes a bad cheque – due to technical reasons like mismatch of signature or overwriting, or also when there are insufficient funds in the account as result of it is not processed by the bank. The cheque is then returned unpaid or dishonoured.

Repeat offences can have serious repercussions. The offender may be slapped with a huge bounced-cheque fee or even a prison term. The bank may stop the cheque book facility or even close your account. Although the Reserve Bank of India states that such action can be taken only if cheques, valued Rs 1 crore or above, have bounced more than four times.

MakaaniQ tells you more about dishonour of cheques and the legal recourse in such cases:

Penalty by the bank

In case a cheque is bounced, both the defaulter and the payee are charged by their respective banks. If the bounced cheque is against the repayment of a loan, you would have to additionally incur late payment charges along with the penalty fee charges by the bank.

Some customers make use of their overdraft account wherein the banks would cover cheques which would otherwise bounce. The customer will pay interest on the outstanding balance of an overdraft loan.

Negative impact on credit score

When availing a home loan, it is important to check if your account has sufficient money. If the processing fee cheque gets bounced, the bank might reject the sanctioned loan immediately. Thus, ensure you always maintain the minimum average balance and avoid any irregular or unusual bank transactions. Recurring cheque bounces can affect your financial credit history which can make it difficult for you to avail loans in future.

Facing criminal charges

If a cheque is bounced citing insufficient funds in bank account, it is a criminal offence and the payee – the person or the bank – can file a complaint under Section 138 of the Negotiable Instruments Act. The bank immediately issues a ‘Cheque Return Memo’ stating the reason for non-payment, when a cheque bounces for the first time. The holder is given a chance to resubmit the cheque to the bank within a period of three months of the date mentioned on it.

The aggrieved party can also legally prosecute the defaulter by sending a legal notice within 30 days of receiving the cheque return memo. Mentioning all important facts pertaining to the case in the notice is vital. This includes nature of the transaction, amount, date of depositing the cheque and when it was dishonoured by the bank. If the cheque issuer or drawer fails to make a fresh payment within a month of receiving the notice, the holder has the right to file a criminal complaint against him.

However, if the aggrieved party fails to file the complaint within 30 days, the court will not entertain the suit unless the delay is justified with a valid reason. If the drawer is found guilty as a wilful defaulter, he will be charged with a jail term of two years or a fine which is twice the cheque amount, or both. The defaulter is also given a chance to appeal to the sessions court within a month of the date of judgment of the lower court.

Facing civil suit

Usually, a separate civil suit for recovery of money, including the cost is borne and the lost interest, is filed in a cheque bounce case as filing a criminal case does not help in recovering the pending dues. However, the aggrieved party may file a cheating case under Section 420 of the Indian Penal Code. But, under the notified Negotiable Instruments (Amendment) Act, the complainant can file a complaint in the city where he is based or where the cheque was deposited. This makes it easier for the victim to take a legal recourse.

Things to remember

It is to be noted that these remedies are possible only if the pending debt or liability can be established. For instance, the holder cannot sue the defaulter if a bounced cheque was issued as a gift or donation.  

It is wise to keep track of available balance and maintain extra cash in your account as a buffer. In case, you find out there is insufficient money in your account, you can inform the payee in writing and issue stop payment/cancellation at your bank or pump in funds into your account before the date of the cheque.

How Does DDA’s Draw Of Lots Work?

The Delhi Development Authority (DDA), on January 2, 2021, launched its housing scheme for this year, with 1,354 flats on offer. The DDA plans to conduct the entire process online – from application to refund. This will help reduce the rigour involved in the process, for the common man.

Every year, thousands of buyers diligently fill the forms of the DDA for allotment of residential units across the national capital. And then they submit those forms after waiting in serpentine queues. All this wait and diligence, they think, will be worth it if they are lucky enough to make it in the draw of lots that the DDA conducts to choose the allottees of its housing units. Luck, as a matter of fact, decides whether an applicant would get a DDA flat in his name or not. 

The result of the draw is uploaded on the DDA’s website immediately after the draw and also published in all the leading newspapers the next day.

While most of us know that the DDA uses the draw-of-lots system to allot — on highly subsidised rates — the houses that it builds, many of us may not be aware how the process actually works.

DDA’s draw of lots

The DDA uses a computerised random number indicated technique for flat allotments and then processes it in three stages: randomisation of applicants and flats; picking up of lucky numbers; and the mapping of applicants and flats.

Let’s take a look at each of the three stages unfolds.

Randomisation of applicants and flats

After randomising the application records and flats by appending random numbers to each one of them, the two records are sorted and printed. While the first record is called cross-reference of applicants, the other one is called the cross-reference of flats. Once it is ensured that all the papers are properly reshuffled, the judges of the draw of lots put their initials on these records.

Picking up of the lucky number

Now, the judges have to pick a lucky number for the applications and a lucky number for the flats. This is done by picking coins numbered 0 to nine kept in boxes. The number of boxes to be used for the purpose depends on the number of applications and flats. For instance, if there are 600,000 applications submitted, the number of boxes to pick up lucky applicants will be six. And, if the number of flats on sale are 4,000, four boxes will be required to pick the lucky number for flats. To decide the lucky number for applicants and the flats, one coin from the two categories is picked. The number formed by the two coins — if one coin says 2 and another says 5, the number thus formed would be 25 — is taken as a lucky number to start the mapping process. 

Mapping of applications, flats

The lucky numbers thus arrived at are now fed into a computer, which starts the mapping of applicants and flats, starting from the positions corresponding to the lucky numbers. While doing so, the system is mindful of the choices made by the applicants in their submissions.

A few important things to know are:

  • The allotment of houses is first made to the differently abled applicants. 
  • Reservations for each category — differently abled, scheduled caste, scheduled tribe, ex-servicemen, war widows — is made locality-wise. 
  • In case of SC/ST applicants, the reservation is swappable. This means that if the number of ST applicants is less than the number of flats reserved for them, the remaining flats will be transferred to the SC quota. The same rule would apply in case of a reverse situation.

In Focus: Green Glades By Godrej Properties

Godrej Properties has become synonymous with superlative residential projects. The company works on the principles of innovation, sustainability and excellence and that is reflected in each and every masterpiece they create. Green Glades is an ultra-luxurious eco-friendly housing complex launched by Godrej Properties in the very popular area near Nirma University on SG Highway.

Green Glades – Complex and Apartments

The Godrej Green Glades complex is spread over an area of 4.20 acres offering seven magnificent towers each with 22 floors and housing a total number of 772 coveted abodes.

Comfortable and spacious apartments with 1, 2, 3, and 4 BHK configurations are available in the housing. Carpet area for 2BHK and 2T apartments is 624 sq ft, for 2BHK and 2T and study room the area is 833 sq ft and for 3BHK and 3T apartments, it is 1,048 sq ft.

Residents of Green Glades will experience fifteen percent cooler ambience than their envious neighbors owing to usage of non-heat absorbent bricks, low heat-absorbent paint on outer walls, shaded courtyards, water bodies, installation of low e-value glass, reflexology path, among others. The apartments and the complex will have better air circulation. This is achieved by creating a low-pollution zone and theme gardens in the complex with oxygen enhancing plants along with herbal & floral gardens. The enclave is surrounded by more than 13000 tree plantations making it a green and peaceful environment. It’s a medley of fresh breeze and abundant sunlight.

Green Glades – Amenities

Smart amenities at Green Glades make life joyous and comfortable. Residents get an exclusive right to the coveted Club House and other recreational options like gymnasium, library,  multipurpose room, swimming pool and badminton court, community hall,

Other facilities that cater to every need of the residents within the premises are car parking spaces, CCTV cameras, lifts, children’s play area, closed car parking, power backup, intercom, sewage treatment plant, ATM, fire fighting system, solid waste management and disposal and others.

Green Glades – Specifications     

The buildings have a solid RCC structure with concrete walls. European tiles or equivalent quality tiles flooring with multiple design combinations to accentuate the beauty of every room. Plumbing and sanitary wares are of Kohler or equivalent quality, water-efficient CP sanitary fixtures and fittings are used in the apartments.

Safety and security of residents is of utmost importance. IP based surveillance cameras can be connected for central monitoring over the FTTH network.

Green Glades – Location

An important feature to keep in mind while buying a property is infrastructure and connectivity enjoyed in the area. As the project is located near the SG highway or The Sarkhej – Gandhinagar Highway, connectivity of this area to other prominent localities in Ahmedabad is good. The area near Nirma University on SG Highway has robust civic infrastructure with many reputed schools, educational institutes, and hospitals established here. Some popular schools and institutes in the area include Nirma Vidhya Vihar, Hiramani School, Maniben Hiralal Amin Educational Complex, Shree Swaminarayan Gurukul Vishwavidya Pratishthanam, Institute of Pharmacy Nirma University, Ahmedabad, Dharmajivanam, Dhaval Zalavadiya, Nirma University Road, SGVP International School, Chharodi Primary School, Tragad primary school, and others.

Some popular hospitals providing medical facility in the area are Arihant Hospital, Santokba Maternity Hospital & Sonography Centre, Chitra Hospital, Divya Children`s Hospital, Vakil Dispensary, Devarshi Super Speciality Hospital, Jain Trust Hospital, Yash Medical Stores, Hospital Dr.Ketal Shah, Shiv Rudrashram Dental Hospital, and others.

Ahmedabad One, Himalaya Mall, restaurants, banks, and other utility shops are also located in the vicinity for the convenience of residents.

Green Glades Developer

Godrej Properties has received over 200 awards and recognitions for its various projects. The most striking aspect of the project is that the residents will have the luxury of experiencing a pleasant environment all year round thanks to the eco-friendly measures like tree grove, central park, urban farming within the complex.

Green Glades – Possession and Completion

A total number of 772 prestigious apartments are launched in Green Glades and it will be ready by November 2022 for possession. It is a RERA approved project. Buyers can also avail the Pradhan Mantri Awas Yogna while purchasing an apartment.

In Focus: Finsbury Park Hyde By Prestige Group

Prestige Group has a legacy of developing projects that are beyond the imagination of home buyers. Finsbury Park Hyde is one such distinctive residential project from the house of Prestige Group. The project is located in the comfortable residential area of Bengaluru near Yelahanka. Spread over a vast area, the complex offers the best of amenities and enviable apartments.

Finsbury Park Hyde – Complex and Apartments

Finsbury Park Hyde is sprawled over a total area of 15 acres and is offering well-designed and gorgeous 1 BHK and 2 BHK apartments. The carpet area of 1 BHK apartments is 416 sq ft. and for 2 BHK apartments, it is 614 sq ft. The paradisal complex offers irresistible amenities and apartments set amidst beautifully landscaped gardens.

Finsbury Park Hyde – Amenities

Finsbury Park Hyde offers high-end amenities that take care of the health and fitness of residents and also provide comfort and convenience of living. Gymnasium, swimming pool, children’s play area, landscaped gardens, lifts, amphitheater, basketball court, cafeteria, health facilities, library, spa/sauna/steam, tennis court, power back-up, rainwater harvesting, waste management and all other facilities are available in the premises.

Finsbury Park Hyde – Specifications

Specifications included in the apartments make them more attractive and comfortable to live. The living room, master bedroom and, other bedrooms all have vitrified tiles flooring. Ceramic tiles flooring is done in bathrooms.

Finsbury Park Hyde – Location

Bengaluru near Yelahanka is a prime location in Bangalore. Several reputed schools, educational institutes, and hospitals are established here. Some popular schools and institutes in the locality are CMR University, United International School, Aditya Institutions, Government Lower Primary School Kb Hosahalli, Sri Maruthi Education Society, Katherine Public School, Delhi Public School, and others.

Some of the renowned hospitals providing the medical facility in the area are Spandana Health Care, N R V Hospital, Om Shakthi Hospital, Saranalaya Hospital Multispeciality, Sri Maruthi Hospital, Ashwini Hospitals, Government Hospital, Jeevan Hospital, Maruthi Hospital, NDR Multi Speciality Hospital, and others.

RMZ Galleria Mall, Garuda Mall, Yelahanka Mall, restaurants, banks, and other utility shops are also located in the vicinity for the convenience of residents.

As Yelahanka is located nearby and is a prominent area all its social infrastructure and facilities are available for residents in Bengaluru also.

Finsbury Park Hyde – Developer

Prestige Group is an eminent real estate developer and has been developing large townships, affordable apartments, luxury residences, and villas. The developer has its premium projects in the cities of Kochi, Hyderabad, Chennai, and Bangalore. Each project is an ultimate refection of meticulous planning and innovation that goes into crafting a legendry project.

Finsbury Park Hyde – Possession and Completion

Finsbury Park Hyde will be ready by June 2023 for possession. A total number of 554 apartments are launched. Special prices and offers are being given to the interested buyers. Either you are buying an apartment to make it your dream home or for investment purpose, this is the right time to own a place in Finsbury Park Hyde.

NBCC To Sell Over 5,000 Units In Various Amrapali Projects

With an aim to generate funds to complete the pending homes of the embattled Amrapali Group, state-run National Building Construction Company (NBCC), is likely to announce the sale of over 5,000 units of the now-defunct builder.

The government company was directed by the Supreme Court, in 2019, to take over the pending projects of the NCR-based builder amid large-scale delays and deliver a total of 38,159 units by 2023. The sale may fetch nearly Rs 45 crore for NBCC.

Projects where these units are located include Sapphire, Silicon City, Princely Estate, Crystal Homes, Heart Beat City, Platinum, Titanium, Zodiac, Castle, Leisure Valley Villas, Golf Homes, Kingswood, Centurian Park-O2Valley, Terrace Homes, Tropical Garden, Dream Valley-Villa, etc.



ED Gets Custody Of Amrapali CFO

The Enforcement Directorate (ED) has started questioning Amrapali Group’s chief finance officer Chandra Wadhwa, on December 19, 2020, to probe the multi-crore fraud, after getting his custody from a special court on the same day.

The central agency had earlier arrested Wadhwa from Delhi, over his involvement in the scam, involving diversion of funds of up to Rs 6,000 crores, collected by the company from over 42,000 homebuyers.

This is the third big arrest in the case, after the ED arrested the company’s directors, Anil Sharma and Shiv Priya, in January 2020.

On December 15, 2020, the Lucknow bench of the Allahabad High Court had, in fact, rejected the bail plea of Sharma, stating that the offences by the company bosses were committed with cool calculation.


Proceed With Sale Of Under-Construction Amrapali Projects: SC To NBCC

November 2, 2020: As agencies involved in the process devise various ways to generate enough funds to complete the housing projects of the now-defunct Amrapali Group, the Supreme Court has directed the builder responsible for the task, to continue with the sale of under-construction housing inventory of the embattled group.

Through the proposed sale, state-run NBCC, which has been appointed by the top court to complete the stuck housing projects of Amrapali, is likely to generate over Rs 2,000 crores.

The court-appointed receiver has also informed the SC that MSTC, which has been roped in by the apex court to auction the assets of the insolvent real estate developers, is also likely to generate another Rs 400 crores, by auctioning six assets of Amrapali.

Another Rs 625 crores could be received from the government’s 25,000-crore alternative stress fund. once the process to establish a non-profit company is completed by the court receiver.



SC Seeks RBI’s Participation For Stuck Amrapali Projects

October 13, 2020: The Supreme Court (SC) has asked the Reserve Bank of India (RBI) to take ‘active participation’ in the process of ensuring credit for completing stuck housing projects of the beleaguered Amrapali Group and to urge banks to lend, for completion of the Group’s pending projects.

During a hearing on October 13, 2020, the top court told the banking regulator that it should appoint an officer that might act as a facilitator between the SC-appointed receiver and the members of the Indian Banks Association, so that financial support could be arranged for the stuck projects in the fastest manner possible.

Even though the apex court has sought the RBI’s assistance to arrange funds for Amrapali’s projects though banks, lenders in the country have not been forthcoming in extending credit.



NBCC To Start Work On 19 Amrapali Projects By Oct 2020

October 5, 2020: Public builder National Building Construction Company (NBCC) plans to deliver 19 projects of the now-defunct Amrapali Group in a matter of 36 months. In various stages of construction, these projects would provide homes to over 43,000 buyers who have been waiting for their units for a long time, for over a decade in some instances. With that deadline in mind, NBCC has doubled its workforce from 6,000 to 12,000.

As banks continue to show caution while offering credit for the completion of stalled project of the beleaguered Amrapali Group, the Supreme Court, on September 21, 2020, asked the RBI to clarify if financial institutions breached any regulatory norms by doing so. Even after signing MoUs with state-run NBCC, at least five lenders have not been forthcoming in releasing the funds, citing legal limitations. So far, no money has also been released from the centre’s SWAMIH Investment Fund, which was to allocate loans to the tune of Rs 625 crores.

The SC-appointed NBCC will require an estimated Rs 8,500 crores, to complete 26 housing projects of the cash-starved Group. To ensure that the NBCC has access to liquidity to complete the stuck project within stipulated timelines, the SC had also directed home buyers to pay all dues by October 31, 2020.


Amrapali forensic audit

Forensic audits of Amrapali Group done following the directive of the Supreme Court (SC) allegedly show that the now-defunct real estate builder signed illegal agreements with New York-based JP Morgan and New Delhi-based sports management company Rhiti, to siphon off money collected from buyers of its under-construction projects.

The forensic audit has revealed that the US-based company bought Amrapali shares worth Rs 85 crore in 2010 to earn profit in the range of 75:25 ratio. These shares were later bought back by two fraud entities for Rs 140 crore operated under the names of office boys of the Noida-based builder. The company also paid Rs 38 crore of homebuyers’ money to its former brand ambassador Mahendra Singh Dhoni’s public relations manager Rhiti after signing sham deals, the forensic auditors had informed the SC.

Following the revelation, the top court on January 13, 2020, directed the Enforcement Directorate (ED) to interrogate Amrapali top brass, who are already in police custody, and attach India-owned properties of JP Morgan.

Forensic audits indicate Amrapali floated scores of shell companies in the name of office boys, peons and drivers, which worked as fronts to divert homebuyers’ money. Benami transactions were widely carried out by selling premium flats for Re 1, Rs 5 and Rs 11 per sq ft in the name of over 500 people, the audits pointed out.

Earlier, the SC had cancelled the registration of all Amrapali Group companies and lease of all its properties, after it was established that the Noida-based builder duped thousands of homebuyers and committed financial frauds running into millions. Private estimates show that 42,000 homebuyers are currently waiting for the delivery of their homes which they booked in various Amrapali projects. The Group also has a standing liability of Rs 1,000 crores to about 10 banks. Additionally, the Group owes about Rs 3,000 crores to Noida and Greater Noida authorities, the two areas where the Group has the highest number of residential projects.

The top court has entrusted state-led National Building Construction Company (NBCC) with completing all pending projects of the Group while directing the ED to probe the financial fraud committed by the developer, who was once seen as the poster-boy of affordable realty in the Noida property market. The ED had earlier filed a criminal case against the company after it received 16 complaints of financial misconduct by the company and its bosses, Anil Sharma, Shiv Priya and Ajay Kumar. 

Bank of Baroda had in 2017 dragged the builder to the National Company Law Tribunal (NCLT) over non-payment, following which several homebuyers moved the SC seeking justice.

Also read: Your Developer Is Going Insolvent? You Can Claim Your Money Back

Over 5,000 Units In Various Amrapali Projects Up For Sale

The government’s construction arm, National Building Construction Company (NBCC), will soon announce the dates for the sale of over 5,000 units at various Amrapali housing projects, spread across the Noida and Greater Noida markets. The NBCC’s move is aimed at garnering funds for completion of the pending projects of the now-defunct builder. In 2019, NBCC was tasked by the SC to take over the pending projects of Amrapali and deliver 38,159 units by 2023.

 “The construction of all Amrapali projects is in progress and we are working simultaneously at many sites. At this stage, we are planning to sell the unsold flats to infuse funds,” an NBCC official said.

The sale may help NBCC generate funds to the tune of Rs 45 crore.


ED To Question Amrapali CFO Over Multi-Crore Scam

The Enforcement Directorate (ED), on December 19, 2020, stated questioning Amrapali Group’s chief finance officer (CFO) Chandra Wadhwa, to unearth the multi-crore scam, after a special court granted it the custody of Wadhwa.

The Lucknow branch of the ED, on December 18, 2020, had arrested Wadhwa from Delhi, in connection with his involvement in the fraud, where the company collected advances from over 42,000 homebuyers and diverted the funds to make personal gains.

The central agency will cross-question Wadhwa, to find out about the companies in which the builder diverted the funds collected from homebuyers, while also probing the involvement of government officials in the scam.

The ED had, earlier in 2020, arrested Amrapali’s directors Anil Sharma and Shiva Priya, to probe the Rs 6,000-crore scam.



NBCC Told To Sell Units At Amrapali’s Under-Construction Projects

November 2, 2020: The Supreme Court, on October 29, 2020, directed the NBCC to sell housing units in Amrapali projects, irrespective of the status of their completion status. The SC’s directive came, after the court-appointed receiver told it that work on the projects could be completed in one year, considering the current pace of construction work.

The top court has been devising various ways in which funds could be accumulated, to complete the stuck projects of the now-defunct Amrapali Group. While the proposed sale of the projects by government’s construction company NBCC is likely to fetch over Rs 2,000 crores, a process is also underway to get Rs 625 crores from the centre’s stress fund, the SWAMIH Fund.



RBI’s Participation Needed, To Get Funds For Stuck Amrapali Projects, Says SC

October 13, 2020: India’s top court, on October 13, 2020, said that the Reserve Bank of India (RBI) should urge financial institutions in the country to make available funds, for completing incomplete housing projects of the now-defunct Amrapali Group.

Even though the top court in India has ruled that state-run NBCC must complete the stuck housing projects of the embattled Amrapali Group as soon as possible, the agency is finding it hard to do so, in the absence of smooth funding.  According to the SC-appointed receiver and senior advocate R Venkataramani, banks are not forthcoming in extending financial help, even though the top court has already asked the RBI to help with the process.

The SC-appointed receiver has so far signed MoUs with Union Bank and UCO Bank to facilitate approval of loans for over 3,000 buyers. He is also in touch with Housing and Urban Development Corporation (HUDCO) and private lender HDFC Bank to get financial assistance for pending Amrapali projects.

After being told by the counsel appearing on behalf of the central bank that it may not be fair on the part of the banking regulator to interfere in the commercial matters of lenders, the SC said an ‘active participation’ by the RBI would expedite the exercise, without leading to any meddling in the affairs of the banks. The SC asked the RBI to appoint an officer that should assist the SC receiver, to meet members of the Indian Banks Association and seek financial support for the stuck projects.



Will Deliver 19 Amrapali Projects In 36 Months: NBCC

October 5, 2020: With an aim to fast-track the construction work on stuck Amrapali Group projects, state-run constructor NBCC has doubled its workforce. In a statement issued on October 4, 2020, National Building Construction Company (NBCC) said it had now expanded its workforce from the prior 6,000 people to 12,000 now, in order to deliver over 43,500 housing units in 36 months. According to NBCC, it would start construction work on as many as 19 Amrapali projects before Diwali this year, to meet the estimated deadline.

While stating that the company has started offering possession of completed units since July 2020, NBCC said it would not wait for the entire project to be completed, to hand over individual units. Possession would be offered to buyers as soon as work on their homes was complete, irrespective of the work completion state at the project level, NBCC said.

With a cash crunch looming large over the fate of Amrapali projects, India’s top court, on September 21, 2020, asked the country’s banking regulator to clarify the legal framework over lending to the insolvent builder. The Supreme Court asked the RBI to submit an affidavit in this matter, after it was brought to the notice of the court that the banks, which had signed MoUs to lend to various stalled projects of the group, were shying away from releasing the credit, citing regulatory limitations.

The SC was also informed during the hearing that no funds had been released from the central government’s SWAMIH Investment Fund, which was expected to offer credit of Rs 625 crores.

Based on the assumption that cash flow will remain smooth, NBCC, the agency selected by the top court to complete a total of 26 housing projects of Amrapali, earlier in 2020, said that over 10,000 housing units could be delivered by June 2021.


SC Asks State-Run MSTC To Auction Amrapali Properties

To ensure speedy disposal of attached properties of now defunct Amrapali Group of Companies and its directors, the Supreme Court, on October 15, 2019, roped in state-run Metal Scrap Trade Corporation (MSTC). The top court said that the funds collected through the auction, would help in speedy completion of stalled projects.

Earlier, the SC on August 13, 2019, directed top officials in Noida and Greater Noida to comply with its earlier order and provide the completion certificate to those Amrapali projects, where residents have already moved in; or face jail. The top court had earlier reprimanded the two authorities for colluding with the embattled company to help it siphon off homebuyers’ hard-earned money.

About two years after the country’s top court took over the high-profile case pertaining to one of the biggest real estate developers in the Noida property market, the SC on July 23, 2019, had passed a decisive verdict in the Amrapali case. While cancelling the registration of all Amrapali group projects registered with the Uttar Pradesh Real Estate Regulatory Authority (UPRERA), the apex court directed public builder National Building Construction Company (NBCC) to take over all pending projects of the embattled builder. The crisis-hit real estate giant has as many as 43 real estate projects in various stages of construction.

It also directed the Enforcement Directorate (ED) to probe the money laundering carried out by senior company officials, including its owners.  Incidentally, the ED had also filed a criminal case against the trouble-hit realtor earlier this month under the Prevention of Money Laundering Act (PMLA), after at least 16 FIRs were registered against the group by the Noida Police.

Over 42,000 homebuyers are waiting for delivery of their homes which they booked years ago. In some cases, bookings were done over a decade ago. While appointing senior advocate R Venkataramani as the court receiver, the SC  vested rights of all the Amrapali properties with him.  The court receiver will be responsible for auctioning these properties and channel the money towards completing projects. The court has also directed that completion certificates be granted in cases where homebuyers have taken possession of units without the builder completing this legal formality.

The Delhi Police arrested Amrapali bosses, CMD Anil Sharma, and directors, Shiv Priya and Ajay Kumar, in February this year. These three are still behind bars.

How did things come to such a pass?

When the National Company Law Tribunal (NCLT) in 2017 initiated insolvency proceedings and appointed an interim resolution professional to manage the affairs of embattled Amrapali Group, thousands of flat owners, primarily in Noida, found themselves extremely jittery. Their jitters are not unfounded.  Under the earlier Insolvency and Bankruptcy Code (IBC), consumers were placed right at the end of the queue, when it came to distribution of assets, if a company were to be liquidated. (This has changed now.)

Also read: Buyers May Get A Say In Insolvency Proceedings Against Builders

Since insolvency proceedings would have impacted buyers’ interests, several pleas were filed in the SC, including one by the Amrapali Silicon City Flat Owners Welfare Society, against the NCLT order.

In Focus: Serene By Vaishnavi Group

Well-known real estate developer Vaishnavi Group has proposed its magnificent residential project Serene in the verdant surrounding of the beautiful Yelahanka of North Bangalore, adjacent to the CPRF Campus. The mega township will be spread over a total area of 10 acres. It is the first of its kind township that is developed in Bangalore using revolutionary off-site European precast technology that assures a faster construction pace. Serene will be your lush green haven amidst the vibrant city of Yelahanka. Its tree-lined avenues, beautifully landscaped gardens, wide courtyards, and skillfully planned apartments provide the blissful living you are looking for.

Serene – Complex and Apartments

Sprawled over a vast area of 10 acres, the Vaishnavi Serene will feature elegantly designed vaastu compliant 896 compact luxury homes of which 512 units are 3 BHK apartments, 300 units are 2 BHK apartments, and 84 units are of 1 BHK apartments. The buildings will be ground plus 4 storey towers tall and will be nestled in the beautiful and eco-friendly complex of Serene. Apartments are designed to provide natural ventilation with the eye-pleasing outdoor view through their high windows and spacious balconies.

The three-bedroom apartments are east and west facing with the super built-up area in the range of 1060 sq ft. to 1118 sq ft,

The 2BHK apartments are east and west facing with the super built-up area between the range of 900 sq ft to 950 sq ft.

The 1BHK apartments are east facing with the super built-up area in the range of 635 sq ft. to 640 sq ft.

Serene – Specifications

Apartments will be thoughtfully planned to optimize space utilization and will be provided with the best of specifications, fittings, and features.

All elements of the structure will be designed for earthquake resistance compliant to seismic zone-II.

Al internal walls and ceiling will be finished with emulsion paint.

All external walls will be finished with exterior emulsion paint.

The main door is made of an engineered wooden door frame and has polished skin shutters.

All internal doors are engineered wooden door frame with laminated shutter.

Toilet doors are engineered wooden door frame with laminated shutter.

Windows are 2.5 track UPVC sliding glazed shutters on two tracks and have provision for mosquito mesh shutter.

Vitrified tile flooring will be done in the living room, dining area, all bedrooms, kitchen, and passages leading to the bedrooms. Anti-skid ceramic tile flooring will be done in the utility area, toilets, and balconies.

Master bedroom toilet and common toilet will have EWC of Hindware or equivalent quality. CP fittings are of Jaguar or equivalent quality.

The kitchen has a single bowl stainless steel kitchen sink with granite platform and ceramic tile up to 2′ height above the kitchen platform. The switch plates will be of Anchor or Roma or equivalent standard.

Serene – Amenities

Serene is an ecologically responsive community.

The complex boasts of special oxygen enhancing zones that help in promoting a healthier lifestyle.

The clubhouse is an inviting space spread over a total area of 20,000 square feet. The ground level of the clubhouse will house a banquet hall overlooking the party lawn with water fountains. The first level hosts the indoor gymnasium with a view of an infinite swimming pool, the level also features a yoga and aerobic deck. The second level hosts indoor sports facilities like badminton courts and table tennis counters. The third level includes 2 pool tables and has a dedicated space for children’s indoor activities and games.

The outdoor amenities augment the luxurious lifestyle of the residents and increase the camaraderie among them, these include tree-lined avenues, outdoor gaming arenas like tennis courts, half basketball court, beach volleyball & netted cricket practice pitch; outdoor gymnasium amidst green zone, tree plaza with seating courts, amphitheater, parks with flourishing gardens, senior citizen zone with foot reflexology areas, pet parks, barbeque zones, children play area, rain pavilions, provision for weekend farmer’s market, walking and jogging paths and cycling tracks.

The security facilities include hi-end apparatus and CCTVs for round the clock monitoring and surveillance.

The premise offers landscaped open spaces that include large green areas comprising of native tree species that help its habitats to connect with nature seamlessly. The premise includes beautiful gardens and open recreational spaces with a children’s play area and community zones for friends & family to gather and share the joy of togetherness. Water fountains add to the charm and the beauty of the complex.

Vaishnavi Serene is the first residential project of Bangalore to be built using off-site European Precast technology which makes use of modular construction techniques to deliver best quality projects and for faster completion of projects.

Serene – Developer

Vaishnavi real estate development group is a prominent developer known for its exceptional residential and commercial projects. Vaishnavi Groups is well-known for developing skillfully crafted homes that elevate the luxurious lifestyle, they use the best in class construction technologies and meticulous planning for perfect designing.

The Vaishnavi Group is passionate about developing signature designer residences, their commitment to delivering a world-class customer experience reflects in its cutting-edge project delivery and customer relationship processes. They guarantee you unparalleled construction experience, unflinching commitment to their customers, and the warmth of their organizational culture

Serene – Location

Vaishnavi Serene is located in the peaceful surroundings of Yelahanka, it lies adjacent to the CRPF Campus. Yelahanka is a well-planned locality in the north of Bangalore. Serene is located just 14 kms away from The Manyata Tech Park.

The infrastructure of the area is good with many reputed schools, educational institutes, and hospitals established here. Some notable schools and institutes in the area are Mallya Aditi International School, Canadian International School, VIBGYOR High, Kendriya Vidyalaya, Chrysalis High, Presidency School, Air Force School, Ocean College of Nursing, Indian Institute of Management, National Law School, Christ University, Institute of Hotel Management, and others.

Some prominent hospitals and medical centers in and around the locality are CRPF Hospital, Neha Prakash Hospital, Prasad Hospital, Sri Lakshmi Venkateshwara Hospital, Apple Hospital, Nava Chethana Hospital, Omega Hospital, Deeksha Hospital, Lakshmi Eye Hospital, Prasad Hospital, and others.

RMZ Galleria, Orion Mall, Elements Mall, Mantri Square, Esteem Mall, restaurants, banks, and other utility shops are also located in the vicinity for the convenience of residents. It is a comfortable area to own a residential place.

Serene – Possession and Completion

Serene is at the pre-launch stage and will be ready by December 2021 for possession. The comfortable and bustling complex offers apartments that are spacious and luxurious. As the project will be built using off-site European Precast technology that makes use of modular construction techniques, the quality and on-time delivery of the project is ensured. It is RERA approved housing so customers get more information about the project and reduce the risk associated with the purchase.

Yelahanka being a prime residential area in North Bengaluru, it is ideal for those looking to buy their dream home and also for those trying to investing in a lucrative property.     

Making Money In Real Estate? These Transaction Are Tax-Free

Volumes and volumes have been written about Indians’ love for real estate and their insatiable desire to possess as much immovable property as they can. This investment is then used to generate further income. If some changes were seen in this consumer behaviour in the past few years, the coronavirus pandemic has given a giant push to the new-age investors towards acknowledging the value of property ownership. Understandably, those making money in real estate also have to pay a great deal of money as taxes. However, there are certain real estate incomes that go tax-free. We list here six of them.

Farmers do not have to pay taxes on their agricultural income

Are you a farmer earning a handsome income through agriculture? Sweet are the uses of all the adversities you face in the process because the government is not going to tax your income.

Do note here that all taxpayers in India have to pay taxes, depending on their slab. While those earning up to Rs 2.5 lakh are exempt, those earning an income between Rs 2.5 lakh and Rs 5 lakh have to pay five per cent tax on their taxable income. For instance, if you are earning Rs 3 lakh as your annual income, Rs 50,000 is your taxable income. Additionally, three per cent of the income tax amount has to be paid towards education cess.  While annual income of between Rs 5-10 lakh is taxed at the rate of 20 per cent, plus education cess, annual income over Rs 10 lakh is taxed at 30 per cent, apart from the standard education cess.

Now, Section 10(1) of the Income Tax (I-T) Act sets you free from this burden of agricultural income. To claim the exemption, you have to prove that the profit has been made using the land for agricultural purposes. This includes processing of agricultural produce. Money earned through farmhouses is also agricultural income, subject to certain conditions specified in Section 2(1A) of the Act.

 Did govt acquire your farmland? No need to pay capital gains tax

As government steps up the work on infrastructural development, many farmers have to let go of their agricultural land to give way for newer developments. Typically, one has to pay capital gains tax on sale of their landed property. However, in this case, the amount the farmer receives as compensation from the government is kept exempt from tax under Section 10(37) of the I-T Act. There are, however, two conditions that should be fulfilled to claim the benefit:

  • The land should have been used for agricultural purpose for the two years, preceding the date of transfer.
  • The compensation should have been received on or after April 1, 2004.

Those earning money through family estate do not have to pay tax

You may have your share in your ancestral property, but are you liable to pay taxes on the income that is being generated through the family estate? The answer is no. For a Hindu Undivided Family (HUF), the income arising out of undivided property is exempt under Section 10(2).

Borrowers do not have to pay tax on reverse mortgage

Many of us buy property in our youth to guard ourselves in our old age. Going for reverse mortgage is one way to do that. In such a system, you mortgage your property to earn a monthly income. Such borrowers, says Section 47(XVI) of the I-T Act, do not have to pay tax on the amount they receive as loan.

Own a palace? You do not have to pay tax for the first property

Royals still enjoy certain benefits in India. For instance, the annual value of one palace in the occupation of a former ruler is exempt from tax under Section 10(19A). However, if a ruler owns more than one place, he will have to pay taxes for the second property onwards.

Real estate investment trusts are exempt, too

While they have yet to become popular in India, real estate investment trusts (REIT) do enjoy tax waivers. The income they generate through renting or leasing properties owned by them is exempt from paying taxes under Section 10(23FCA).

All You Need To Know About Section 24 of IT Act for Homebuyers

A property is perceived to have potential to generate income for its owner and thus the government imposes a tax on this ‘potential’, irrespective of the landlord generating a rental income from it or not.  For the calculation of tax liabilities on account of such properties, authorities decide its annual value. This income also attracts deductions under Section 24 of the Income Tax Act, 1961.


Understanding Section 24 of the Income Tax Act

The application: Section 24 offers a flat 30 per cent deduction on net annual value of a property. This is ‘nil’ in the case of self-occupied properties as per the IT Act, irrespective of the payment of municipal tax or not. So, if a buyer purchases a property entirely using his own resources i.e without the assistance of housing finance and is generating income by renting it, he could claim Rs 30 as deduction from every Rs 100 earned. However, if the same property is self-occupied, the owner cannot avail of any deductions under Section 24.

For clarity sake, it is worth mentioning here that  income from house property is taxed on the basis of its net annual value and not on the gross annual value. Net annual value of the property is arrived at by deduction of the tax amount incurred towards paying the municipal body.This section also applies in cases where buyers have used housing finance from a lender to acquire, construct, repair, renew or reconstruct a property.

In such cases, there could be two possible scenarios.

  1. If the property is not generating income,(self-acquired or a vacant property), the borrower can claim a deduction of up to Rs 2 lakhs on the home loan interest paid in a financial year under Section 24.
  2. In case the property is generating income for the borrower, by means of rental income, the entire home loan interest component is allowed as deduction. This provision is put in place to encourage property owners to let out vacant properties. Government estimates show vacant homes formed 12 per cent of the housing stock in India’s urban markets in 2011.


Conditions apply

Several conditions have to be fulfilled to claim benefits under this section. In case the loan money is used in construction or purchase of a new property, the borrower can claim Rs 2 lakh as deduction on pre-construction interest in a year in five equal installments at the start of the year, in which the property is constructed or purchased.

There are three basic conditions based on which a borrower can claim deductions under Section 24.

  1. They must have taken the loan after April 1, 1999.
  2. They should have a certificate from the lenders about the interest calculation.
  3. Work must be completed within five years of taking the loan.

For instance, if you are expecting completion of the construction work by FY20, you can claim deduction for the pre-interest you have paid till March 2019 while filing your Income Tax returns in June this year.

“Where the property has been acquired or constructed with borrowed capital, the interest shall be deducted in equal installments for the said previous year and for each of the four immediately succeeding previous years,” reads Section 24. This option is not available if the loan money is used in repairs and improvement. In the latter case, deductions can only be claimed after the repair work has been completed.

The deduction gets restricted to Rs 30,000 in case the house is not constructed within five years of taking the loan. This period starts from the end of the financial year in which the loan was taken.

In case the borrower has paid more than Rs 2 lakhs as interest, they have the option to carry their additional expense forward for another three years to set off the losses. This option is, however, open to only those who are generating income from the house property. 

Under Section 80C, tax deduction on the principal component of housing loans is offered on a payment basis. The same is not true of Section 24, under which deductions are offered on accrual basis. This means, interest would be calculated for each year separately and deductions can be claimed even if no actual payment has been made.

5 New Year Resolutions For Investors

As is true of property markets across the world, 2020 was an eventful year for India’s real estate sector. The lacklustre performance of the sector in the after of the coronavirus pandemic was only expected. While remarkable policy changes have been implemented in the past to bring transparency and make the property more affordable in the recent times, home sales showed some improvement in the last quarter of the calendar year 2020, showing a 68% year-on-year spike. However, the way thigs are shaping up, it is certain that real estate investors should brace themselves for surprises.

If you plan to park your money in real estate in the year 2021, you must also keep certain things in mind for your investment to turn fruitful.

Keep it all clean

All stakeholders in the real estate sector now have to follow a rulebook i.e. the provisions of the Real Estate (Regulation & Development), 2016. Under the provisions of the law, any kind of goof-ups may land you in trouble. It would be the best to keep all property-related transactions clean and go by the book. 

Expect only the due

Gone are the days when investing in a property was considered the safest bet to multiply your money in no time. According to PropTiger DataLabs figures, property prices across major cities of the country have seen no appreciation in the past couple of years. If you are investing in property expecting windfalls in the short term, you will face disappointment.

Focus towards emerging markets

With work from home becoming the mainstay, Tier-II and Tier-III cities are becoming the hotbeds of investment activity. So, if you are looking to make money in the real estate sector, you will have to learn to shift your focus towards these emerging markets.

Learn to be ready for changes

Several policy changes in the past years have affected India’s real estate sector remarkably. The Narendra Modi government’s decision to demonetise currency notes of higher denominations, for instance, impacted the manner in which property transactions were done in India. As the Prime Minister gears up to rid the sector of all its ills, more changes might be on their way. So, buckle up for some surprises.

Wait and watch

Real estate investment is a long-term commitment.  Getting jittery about day-to-day changes and their impact on real estate might not be a good idea. Those who lost their sleep over the demonetisation drive, for instance, did not really have a reason to do so. Land happens to be one of the safest asset class, and its benefits are to be reaped in the long-term.