The Real Estate (Regulation and Development) Act, 2016 (“Act”) is a beneficial legislation enacted to balance the interest of all the stakeholders in the real estate sector. Under the Act, state governments have been mandated to frame rules for their respective states to regulate the real estate sector. A number of underlying complications with regard to the implementation of the Act have been identified since its inception. One of such ambiguity is the implications of section 15 of the Real Estate (Regulation and Development) Act, 2016.
Section 15 (1) of the said Act states as follows:
“The promoter shall not transfer or assign his majority rights and liabilities in respect of a real estate project to a third party without obtaining prior written consent from two-third allottees, except the promoter, and without the prior written approval of the Authority”
This provision raised an ambiguity as to whether change in internal shareholding, merger and acquisition of the promoter’s organization, enforcement of security by financial lender would amount to transfer or assignment of majority rights and liabilities of the promoter in respect of the real estate project thereby requiring the promoter to obtain 2/3rd consent of the allottees and consent of the Regulatory Authority. In this regard, the Maharashtra government has recently provided much needed clarity on the implication of section 15 of the Act under its Circulate No. 11/2017 (“Circular”).
Under the Circular, the Regulatory Authority has, to the satisfaction of all the stakeholders, clarified the following:
It would be interesting to see how do other States react to this Circular and whether they would also follow the same or similar provisions as envisaged in the Circular.
It has been reported that the Data Security Council of India (DSCI) will be introducing a ‘data protection seal’ (DPS) for organizationsView More
The Reserve Bank of India (“RBI”) on January 15, 2024, released a draft framework (“Framework”) that outlines the broad responsibilities, functions, governance as well as the eligibility criteria for the purpose of setting up a self-regulatory organization in fintech companies (“SRO-FT”)View More
The Enforcement Directorate (“ED”) after registering a case under Prevention of Money Laundering Act, 2002 (“PMLA”) back in February 2022 and duly conducting the primary investigation alleged in July 2023 that INR 62,476 Crore was illegally transferred by VivoView More
Delhi (Head Office)
Plot No. 66, LGF, #TheHub, Okhla Phase III, Okhla Industrial Estate, New Delhi 110020, India.