06 - 05 - 2020

CREDAI Bengal Daily News Update | 06.05.20

SARFAESI Act applicable to co-operative banks: SC

A constitution bench of Justices Arun Mishra, Indira Banerjee, Vineet Saran, M.R. Shah

and Aniruddha Bose said, "The provisions of Section 2(1)(c) of SARFAESI Act, 2002 is

not ultra vires."

The Supreme Court on Tuesday held that cooperative banks come under the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security Act 2002 (SARFAESI Act)

A constitution bench of Justices Arun Mishra, Indira Banerjee, Vineet Saran, M.R. Shah and

Aniruddha Bose said, "The provisions of Section 2(1)(c) of SARFAESI Act, 2002 is not ultra

vires."

The top court observed that the recovery is an essential part of banking; as per the recovery

procedure prescribed under Section 13 of the SARFAESI Act, legislation relatable to Entry 45

of List I of the Seventh Schedule to the Constitution is applicable.

"We find that the SARFAESI Act qualifies the test of legislative competence, as well as the

definition, cannot be said to be a colourable piece or over inclusive or beyond the competence

of the Parliament," said the court.

The SARFAESI Act was introduced in 2002, and it defined bank and multi-state co-operative

banks. Through a notification issued by the Centre in 2003, cooperative banks were allowed to

proceed under the SARFAESI Act.

The top court noted that cooperative banks registered under the state legislation and multi-state

level cooperative societies registered under the MSCS Act, 2002, with respect to 'banking' are

governed by the legislation relatable to Entry 45 of List I of the Seventh Schedule of the

Constitution.

The top court also upheld the 2003 notification under the Banking Regulation Act, where

cooperative banks were brought within the class of banks entitled to seek recourse to the

provisions of the SARFAESI Act.

The top court held that cooperative banks involved in the activities related to banking are

covered within the meaning of 'Banking Company' defined under Section 5(c) read with Section

56(a) of the Banking Regulation Act, 1949, which is a legislation relatable to Entry 45 of List I.

Newspaper/Online ET Realty (Online)

Date May 06, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/sarfaesi-act-

applicable-to-co-operative-banks-sc/75567920

It governs the aspect of 'banking' of cooperative banks run by the cooperative societies.

"The cooperative banks cannot carry on any activity without compliance of the provisions of the

Banking Regulation Act, 1949 and any other legislation applicable to such banks relatable to

'Banking' in Entry 45 of List I and the RBI Act," said the court.

The Banking and Regulation Act was made applicable to cooperative banks in 1965, which led

to the beginning of a regime of dual control, as these banks were also controlled by laws, which

were state specific. In 2013, "multi-state cooperative banks" were included in the definition.

In the backdrop of several conflicting decisions of the courts on this issue, a three-judge bench

of the apex court headed by Justice Mishra had referred the matter to a larger bench.

________________________________________________________________

Cement price up by Rs 100 per bag, associations seek government

intervention

Hardware retailers dealing with cement in the city said leading brands have hiked the

price of 53 grade cement bags, each weighing 50kg and containing have Portland

Pozzolana cement (PPC), by Rs 60 a bag.

In another setback to the construction sector, which is reeling under the effect of the

lockdown, cement manufactures hiked prices in the retail market by up to Rs 100 per bag on

Tuesday.

The move has reignited support for the long pending demand for a government-led authority to

regulate cement rates.

Hardware retailers dealing with cement in the city said leading brands have hiked the price of

53 grade cement bags, each weighing 50kg and containing have Portland Pozzolana cement

(PPC), by Rs 60 a bag. Regular brands have increased prices by Rs 100. The rate of Ordinary

Portland Cement (OPC) of regular brands jumped to Rs 60. The current price for premium

brand PPC ranges from Rs 365 to Rs 395, while OPC is sold for Rs 375 to Rs 410 a bag.

Damodaran, a cement dealer at Vinayagapuram near Retteri, is unsure of how to proceed after

such a steep increase of the key construction material.

“A customer placed an order for 20 bags of cement with the old rates before the lockdown

period and has made the payment. Now, I cannot sell him cement with previous rates because I

will incur losses,” he said.

Dealers said the sudden hike, which came as a surprise, was notified on May 1.

Cement prices were revised in February last year, when rates for bulk purchasers was also

revised by Rs 70. Confederation of Real Estate Developers’ Associations of India

(CREDAI) Tamil Nadu chapter president elect Suresh Krishn said the cartelisation of cement is

a blow for the sector.

“This will increase the cost of construction. Increasing the rates by Rs 100 per bag at a time

when the construction sector is in doldrums was unacceptable and we want the government's

intervention to rollback the prices,” he said.

Small developers and those building independent houses would be worst hit. Builders

Newspaper/Online ET Realty (Online)

Date May 06, 2020

Link https://realty.economictimes.indiatimes.com/news/allied-industries/cement-price-

up-by-rs-100-per-bag-associations-seek-government-intervention/75567859

Association of India state treasurer S Ramaprabhu said a regulatory body on the lines of TRAI

was the only solution to maintain cement prices.

When contacted sources in the cement industry said producers have not revised the price.

“At the trade level, cement prices may have seen some increase due to greater demand now

compared to reduced supply in Chennai and other Tamil Nadu markets. Prices are expected to

stabilize once the supply from plants in Tamil Nadu and Andhra Pradesh increases,” a source

said.

________________________________________________________________

MahaRERA to hear only urgent cases during lockdown

This will be done with all staff working digitally during this period. The working of

MahaRERA from May 18, will be decided only after further review and subject to further

directions from state and central government, the regulator said in a statement.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has decided to hear only

urgent cases filed by homebuyers during the extended lockdown until May 17. The regulator

will continue its operations and online delivery of all services including project registrations,

project extensions and most importantly filing of complaints.

This will be done with all staff working digitally during this period. The working of

MahaRERA from May 18, will be decided only after further review and subject to further

directions from state and central government, the regulator said in a statement.

Only cases that require immediate attention will be listed following an application from either

related parties and urgency of the matter will be decided by the full bench of the authority.

The regulator had earlier announced that registered projects where completion date expired on

or after March 15, 2020, the period of validity for registration of such projects will stand

extended by three months.

In March, the authority had initiated Suo Moto action against 85 realty projects and the last

order was signed by the regulator on March 18, when it decided to shut its offices partially due

to Covid19.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date May 05, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/maharera-to-hear-

only-urgent-cases-during-lockdown/75550954

DDA to resume inspection of properties in illegal colonies

According to DDA, total 2.57 lakh registrations had been completed on the DDA portal

created for PM-UDAY and GIS mapping of 70,000 properties had been done.

The Delhi Development Authority (DDA) is gearing up to resume inspection of properties in

1,731 unauthorised colonies by surveyors after the lockdown for conferring ownership rights to

residents of these colonies under the Pradhan Mantri Unauthorised Colonies in Delhi Awas

Adhikar Yojana (PM-UDAY).

“The work of physically surveying the properties cannot be carried out during the lockdown as

surveyors wouldn’t be able to get the geo-coordinates of the properties. However, survey work

would be resumed immediately after the lockdown with due precautions and keeping safety of

both residents and surveyors in mind,” a DDA official said.

“The authority, however, was working on war footing to complete all backend and online work

during the lockdown,” he said. “We were providing complete online service under the scheme

for granting ownership rights and all processing work was going on at full pace,” he said.

According to DDA, total 2.57 lakh registrations had been completed on the DDA portal created

for PM-UDAY and GIS mapping of 70,000 properties had been done. DDA had received 4,900

completed applications. During the lockdown, DDA’s four processing centres at Dwarka,

Pitampura, Hauz Khas and Laxmi Nagar had been operational.

Apart from resuming inspections of properties by surveyors, DDA would also carry out the

execution of authorisation slip or conveyance deed of properties for which all due process had

been completed. The Centre had in October 2019 approved the proposal to grant ownership

rights to residents of the 1,731 unauthorised colonies in the city.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date May 06, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/dda-to-resume-

inspection-of-properties-in-illegal-colonies/75567889

Mumbai luxury residential prices to dip 5% in 2020: Report

“The impact of COVID- 19 is far reaching for most global markets. India’s key markets

will also be faced with the uncertainty mostly due to a significant erosion of confidence

amongst buyers across spectrum,” said Shishir Baijal of Knight Frank India.

Luxury residential market of Mumbai is likely to see a price decline of 5% in the year 2020

owing to the impact of Covid-19 on luxury residential property markets around the world. For

the year 2021, Mumbai’s prime residential prices are expected to witness an additional decline

of 3%, showed data from Knight Frank India.

Mumbai’s luxury housing market ranked 33rd with 0.1% rise during the 12-month period

ending March. The city registered 0.1% price decline sequentially in the first quarter of 2020.

Delhi prime residential market ranked 32nd with 0.4% annual price change for the 12-month

period.

Bengaluru’s market performed better than Mumbai and Delhi. Globally, the city ranked 27th

with 1.4% annual price change for the period; also witnessing 0.1% sequential price change.

“The impact of COVID- 19 is far reaching for most global markets which is reflected in the

outlook for the prime residential segments. India’s key markets will also be faced with the

uncertainty mostly due to a significant erosion of confidence amongst buyers across spectrum,”

said Shishir Baijal, Chairman and Managing Director at Knight Frank India.

However, he believes this also presents an opportunity for serious buyers with adequate

liquidity to enter the real estate segment in India and across the world as values would be

attractive.

According to the Knight Frank report, Lisbon, Monaco, Vienna and Shanghai are the only four

global prime residential markets set to see price growth throughout the remainder of 2020.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date May 06, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/mumbai-luxury-

residential-prices-to-dip-5-in-2020-report/75567786

Problems surface on resumption of construction work in Tamil

Nadu

Builders Association of India state treasurer S Ramaprabhu said that availability of

construction materials including cement and brick was a major challenge to resume

operations.

Notwithstanding government opening up construction activity from Monday, there was hardly

any work on site as material shortage, both concrete and sand, grounded the day’s operations. A

chunk of builders also faced problems over accessing e-passes for their engineers to reach

construction sites to commence works.

Builders Association of India state treasurer S Ramaprabhu said that availability of construction

materials including cement and brick was a major challenge to resume operations. According to

him, cement must be utilised within 3 months of the commodity being sent out of (cement)

factories. “Otherwise, it may lose its strength. While we cannot consume the stocked cement

bags manufactured before February, fresh cement was also not available in the market,” he said.

The state government allowed construction activities in urban areas, where construction

labourers were staying within their site from Monday. However, these workers need to be

supervised by a team of engineers, who need to obtain e-passes of commuting. “We were

unable to get e-passes for many because of the surge in demand online. Not many wanted to get

into trouble by stepping out without the passes as the lockdown was still in place. Moreover,

guest workers are desperate to return home and retaining them is going to be a real challenge,”

Ramaprabhu added.

In places where cement dealers opened their outlets, violations of social distancing norms

resulted in police ordering immediate closure, manufacturers said. Many construction sites saw

some migrant workers wait for directions to commence work. “We heard that there was severe

crowding in some of the cement shops forcing police to shut it down. We have instructed our

dealers that they must follow social distancing norms,” said A V Dharmakrishnan, Managing

Director, Ramco Cements.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date May 06, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/problems-surface-on-

resumption-of-construction-work-in-tamil-nadu/75567832

Tough to restart work if labourers leave, says Ghaziabad

development body

According to a Ghaziabad Development Authority (GDA) official, there are 70

construction sites in the district, including private sites.

While construction activities have finally been allowed in Ghaziabad, officials are not sure if

work can be started given the absence of a full workforce.

According to a Ghaziabad Development Authority (GDA) official, there are 70 construction

sites in the district, including private sites. “As per our database, there are 4,800 construction

labourers who are camping at various construction site. As per the administration’s directions,

only those workers will be used who are currently in the district,” said Kanchan Verma, vice

chairperson, GDA.

Verma added, “We have learnt that of the 4,800 labourers, many are willing to go back to their

home states, making it very difficult for work to start at construction sites.”

The GDA has already issued SOP for everyone at construction sites, facilitating resumption of

work under the guidelines issued. “We will be issued photo identity cards and workers and

contractors will have to follow it,” said Verma.

“There are do’s and don’ts — spitting at construction sites have been prohibited, thermal

screening will be conducted of all workers and there will be a doctor present at the sites to

monitor the health of workers,” said the official. “The sites will be sanitised and random tests of

the at least five workers will be done by the doctors on a daily basis,” added Verma.

“In the case of private builders, contractors and private builders will have to seek prior

permission from the GDA to restart work and they will have to appoint Covid marshals, who

will be selected by the GDA,” added the official.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date May 06, 2020

Link https://realty.economictimes.indiatimes.com/news/infrastructure/tough-to-restart-

work-if-labourers-leave-says-ghaziabad-development-body/75567805

Hyderabad civic body property tax collection set to dip

Under EBS 2020-21, GHMC received Rs 137.93 crore property tax from 2.95 lakh

households in April. In May, the collection stood at Rs 6.20 crore (till May 3).

The Telangana government’s decision to roll back 5% discount for commercial property owners

has resulted in a major dip in city’s property tax collection. Before 2020, under Early Bird

Scheme (EBS), all property tax owners (residential and commercial) used to get 5% rebate on

property tax.

Under EBS 2020-21, GHMC received Rs 137.93 crore property tax from 2.95 lakh households

in April. In May, the collection stood at Rs 6.20 crore (till May 3). Under the same scheme,

GHMC was able to collect Rs 535 crore tax in April in 2019-20 from 4.92 lakh households.

“Rolling back the discount offer for commercial establishments is the primary reason and

coronavirus is also one of the reasons for dip in the tax collection,” said a GHMC official.

Before 2020, the scheme was open only in April.

However, due to coronavirus, the civic body has extended EBS till May 31 this year. “As per

our estimates, we cannot cross Rs 500 crore mark this year,” he said.

Under EBS , residents of GHMC Khairatabad zone covering Banjara Hills, Jubilee Hills and

central parts of the city were the highest property tax payers (Rs 34.87 crore) followed by

Serilingampally zone (Rs 31.15 crore) covering the city’s IT corridor.

While all the residential property owners got 5% tax rebate, residential property owners in LB

Nagar constituency got 7.5% tax rebate and commercial property tax owners got 15% tax

rebate.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date May 05, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/hyderabad-civic-

body-property-tax-collection-set-to-dip/75546671

Hyderabad: Developers worried of worker exodus, dangle bonus

offers

The fear is much the same among all developers, said Ramakrishna Rao, president of

Credai-Hyderabad. “We are trying to motivate the workers to hold on till the festival

season; but it is up to them,” he said.

Less than 24 hours after the city’s realty sector started to pick up pace, with migrant labourers

slowly returning to work, a call from the police, on Tuesday morning, put brakes on the activity

once again.

Speaking to TOI, developers said that the cops asked them to draw up a list of labourers,

employed at their sites, willing to go home. They will, subsequently, be accommodated on

trains being arranged by the state . "We have started the process. By the end of the week we’ll

know how many people are set to leave,” said R Suresh Kumar, senior vice-president (business

operations), Prestige Group (Hyderabad), fearing that a sizeable group of workers – almost up

to 50% -- will sign up for the journey back home, especially with 40 trains scheduled every day.

On Tuesday, the two under-construction Prestige sites had only 800 and 150 workers

respectively.

The fear is much the same among all developers, said Ramakrishna Rao, president of Credai-

Hyderabad. “We are trying to motivate the workers to hold on till the festival season; but it is up

to them,” he said.

Fearing a mass exodus, many developers are doling out incentives to labourers willing to stay

back. On offer are bonuses to promises of a Diwali bonanza. “We have decided to offer 20%

extra to workers who stay back,” said Tapas Patel, CEO of Om Sree Builders and Developers.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date May 05, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/hyderabad-developers-

worried-of-worker-exodus-dangle-bonus-offers/75567757

Gujarat HC delivers split verdict on urban land ceiling case

After the split verdict, the matter has now been referred to a third judge for adjudication.

The issue is pending in the high court for 28 years.

The Gujarat high court delivered a split verdict in an urban land ceiling case, for a plot on

the SG Highway in Sola village, on which a cooperative housing society staked claim and a

commercial complex has been put up despite an HC stay order.

In this case, while one judge accepted the claims of the cooperative housing society that it could

use the land, the other judge not only rejected the claims but also imposed fine of Rs 50,000 on

all persons including the society who had challenged the single-judge order. The single judge

had in 2007 rejected the society’s claims and imposed costs of Rs 10,000 on it.

After the split verdict, the matter has now been referred to a third judge for adjudication. The

issue is pending in the high court for 28 years.

In this case, two persons bought 12,141 square-metres of land from a farmer in 1975. The

Urban Land (Ceiling & Regulation) Act came into effect in 1976. When the authority claimed

the land, both landowners claimed that the land was bought because they wanted to promote a

housing society. The authority spared 1,000 square metres for each of the owners and declared

10,141 square metres as excess vacant land. The owners formed Dip Coopeative Housing

Society in 1980 and the dispute about the excess vacant land lasted before the concerned

tribunal till 1991. The authority granted relaxation for the cooperative society.

The issue came before the HC in 1992, which ordered that the status quo be maintained.

However, a commercial complex was erected on part of the land. To the authorities’ objection,

the society defended itself by stating that the commercial construction was not on the land in

question. The society continued to assert its claim on the land excess.

While dealing with the appeal, Justice J B Pardiwala considered the society’s claims as proper

while Justice A C Rao concurred with the single-judge’s 2007 judgment. Justice Rao found that

the society suppressed material facts and the ULC land is meant for dwellings of the poor and

not for the cooperative society.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date May 05, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/gujarat-hc-delivers-

split-verdict-on-urban-land-ceiling-case/75546652