April-June 2017

IN THIS ISSUE

Key Highlights

Recent Development in the

Real Estate Sector

Seal the Deal – a Glimpse of

New Mandates

Notable Speakerships and

Making Headlines

Contact Us

Head Office

New Delhi

D -55, Defence Colony,

New Delhi-110 024.

Tel: +91 (11) 42410000

Email: contact@dhirassociates.com

Website: www.dhirassociates.com

Branches: Mumbai, Hyderabad and a

representative office in Toyohashi-shi,

Japan

Established in 1993, Dhir & Dhir Associates is a full service law firm with a pan India

presence in prime cities of New Delhi, Mumbai, Hyderabad and strategic alliance with

associate lawyers in more than 15 States. The firm also has an international presence

with a representative office in Japan. This network of alliances gives the benefit to the

clients of a single window service provider, to deal with all kinds of matters within the

country and cross-border transactions under one umbrella. With over 100

professionals including lawyers, some with dual qualifications of chartered

accountants, company secretaries, cost accountants, MBAs and engineers, the firm is

adept in handling complex legal and financial matters. The firm and its partners have

been recognized as the leaders in "Restructuring and Insolvency" and “Dispute

Resolution”, and have also been highly ranked for "Banking and Finance", "Projects,

Infrastructure& Energy", "Technology, Media and Telecommunication”, “Project

Finance”, “Corporate /M&A”, “Financial Service Regulatory” and "Private Equity" in

leading legal publications including Chamber and Partners, Legal 500, IBLJ, IFLR1000and Asia Law Profile.

About Us

1

THE HORIZON

Recent Development in the Real Estate Sector

The lack of transparency and inefficiencyin the real estate sector has created ademand for the proper vigilancemechanism. To address this concern, theGovernment of India brought a change inthe legislation as well as implementationof specialized regulator through theenactment of the Real Estate (Regulationand Development) Act, 2016 (“Act”) onMay 1, 2016 which has come into fullforce from May 1, 2017. The Act providesthat appropriate state government shallestablish Real Estate Regulatory Authorityto regulate and promote thestate’s/Union Territory’s real estatesector. RERA rules have so far beennotified by 18 states and UnionTerritories.

The Act focuses primarily on promotingthe timely completion of projects andmaintaining the consistency by regulatingthe sale in real estate sector. It furtherprovides for establishing an adjudicatingmechanism for speedy dispute redressalthrough Real Estate Appellate Tribunal(“REAT”) to hear appeals from thedecisions and orders from the Real EstateRegulatory Authority (“RERA”). Witheffect from May 1, 2016, the Act broughtinto force 69 of the 92 sections of the Actand now, with all the 92 Sections of theAct coming into force with effect fromMay 1, 2017, the builders/promoters willhave to ensure that all the ongoingprojects as well as new projects

registered with the RERA are givencompletion certificates by the end of July.

The Act has established RERA, REAT andthe Central Advisory Council (“CAC”) fordischarging its functions under the act andhas vested with the powers to regulate itsown procedure. The CAC will represent theinterests of real estate industry,consumers, real estate agents,construction labourers, academic andresearch bodies in the real estate sectorand will carry out the functions foradvising the recommending the CentralGovernment in matters related toimplementation of the Act, protection ofconsumer interest, foster the growth anddevelopment of the real estate sector andas any other matter as may be assigned toit by the Central Government. The Act hasfurther entrusted RERA and REAT with theregulatory and adjudicatory authoritieswith members specializing in the relatedfield by increasing the scope for greatercertainty to the matters under the Act. TheRERA will facilitate the growth andpromotion of transparent, efficient andcompetitive real estate sector through theprotection of the allotees’ interest,promoter and real estate agent, creationof single window system for ensuring timebound approvals and clearances of theprojects and the measures to encourageinvestment in the real estate sectorincluding measures to increase financialassistance to affordable housing segment.

By Ms. Namrta Sudan Rai, Associate Partner

Some of the key provisions of the Act are:

(a) Mandatory registration of real estateprojects by the Promoters with RERA.However, no registration of the real estateprojects will be required inter alia wherethe area of land does not exceed 500 (fivehundred) square meters or the number ofapartments does not exceed 8 (eight)inclusive of all phases.

(b) Mandatory registration of real estateagents.

(c) Provides functions and duties ofpromoters along with rights and duties ofallottes.

(c) Depositing 70% of the amounts realisedfrom the real estate projects from theallottees from time to time to be depositedin a separate bank account in a scheduledbank to cover the cost of construction andthe land cost, which will be used only forthat purpose. However, the withdrawalfrom the account can be made in theproportion to the percentage of completionof the project.

(d) In case any structural defect or any otherdefect in workmanship, quality or provision ofservices or any other obligations of thepromoter as per the agreement for salerelating to such development is brought tothe notice of the promoter within a period of5 years by the allottee from the date ofhanding over possession, the promoter willrectify such defects without further charge,within thirty (30) days, and in the event ofpromoter's failure to rectify such defectswithin such time, the aggrieved allottees shallbe entitled to receive appropriatecompensation in the manner as providedunder this Act.

(e) Both developers and buyers to pay thesame penal interest of SBI's Marginal Cost ofLending Rate plus 2% in case of delays.

(f) The proposed project is required to bedeveloped and completed by the Promoter asper the approved sanctioned plans, layoutplans and specifications. Any alterations oradditions in the sanctioned plans, layoutplans and specifications after the initiation ofthe project would require 2/3rd of theallottees.

The allottees’ interest has been protectedunder the Act such as allottees can getthe requisite information regardingapproved sanctioned plans, specificationsetc., claim refunds (along with interest) ofthe amount paid to the promoter in theevent promoter fails to complete or isunable to give possession of anapartment, plot or building: (a) inaccordance with the terms of theagreement for sale or, as the case may be,duly completed by the date specifiedtherein; or (b) due to discontinuance ofhis business as a developer on account ofsuspension or revocation of theregistration under this Act or for anyother reason, get compensation ifallottee (within five years of gettingpossession) brings to the notice ofpromoters any structural defect or anyother defect in workmanship, quality orprovision of services or any otherobligations of the promoter, allottees mayalso file a complaint with the RERA (orthe adjudicating officer) for any violationor contravention of the provisions of theAct. Further, any person aggrieved by thedecision or order of the RERA may file anappeal before the Appellate Tribunal ofthe relevant jurisdiction.

As regards builders/promoters, there is amixed reaction in the real estate industrywith the Act coming into full force. Therecent development has brought thebuilders/promoters into action for makingrequisite financial arrangement to complywith the provisions of the Act. Thebuilders/promoters are now restructuringtheir real estate projects to meet therequirements of the Act more effectivelyand proposing to treat their each buildingas a different phase for registrationprocess.

The mid-sized builders/promoters arealso proposing to realign their business,which may include seeking financialassistance to meet the 70% depositcriteria. It is also interesting to note thatsome of the builders/promoters are nowin a hurry to handover the possession tothe allottees for avoiding penalty underthe Act, which shows that the provisionsof the Act will play an effective role inensuring that the possession is handedover to allottees in a timely manner.

We are hopeful that this recentdevelopment will bring a much awaitedchange and constructive progress in thereal estate industry. A new transparent,regulated and disciplined real estatemarket may emerge. This may alsoencourage the builders/promoters torealign and revamp their business modelsto attract global capital flows in the Indianreal estate market.

Seal the Deal – a Glimpse of New Mandates

DHIR & DHIR ASSOCIATES ACT AS LEGAL ADVISORS TO THE MINISTRY OFCOMMUNICATIONS & INFORMATION TECHNOLOGYThe firm offers legal advisory TO THE Ministry of Electronics & Technology under theprovisions of Information Technology Act, 2000 and the Information Technology(Preservation and Retention of Information by Intermediaries providing Digital LockerFacilities) Rules, 2016.

DHIR & DHIR ASSOCIATES ACT AS LEGAL ADVISORS FOR NATIONAL ALUMINIUMCOMPANY LIMITED (NALCO)The Firm has advised National Aluminium Company Limited on acquisition/ setting up ofwind farm projects land parcel at different locations situated at Rajasthan, Tamil Naduand Andhra Pradesh. In the regard, the Firm was instructed to undertake due diligenceon the 8 project sites offered by the bidders having an aggregate project capacity of 200MW.

DHIR & DHIR ASSOCIATES APPOINTED AS THE LEGAL ADVISORS TO MUMBAI METRORAIL CORPORATION LIMITED (MMRC)Dhir & Dhir Associates provide legal consultancy services and assistance in Court matters,documentation and advice on matters of legal implications, matters pertaining to Landacquisition process and redevelopment of plots for project affected famililis.

DHIR & DHIR ASSOCIATES EMPANELLED AS LEGAL ADVISORS BY NATIONAL MINERALDEVELOPMENT CORPORATION (NMDC)The firm is empaneled to offer legal advisory services to NMDC, India's largest iron oreproducer and exporter for M&A activities.

NAYA RAIPUR DEVELOPMENT AUTHORITY (NRDA) EMPANELS DHIR & DHIRASSOCIATES AS LEGAL ADVISORSLegal Advisory Services to NRDA for Litigation Management, Arbitration & Conciliation,Company Law, PPP and Non PPP Contract Management and Taxation Laws.

DHIR & DHIR ASSOCIATES ARE LENDERS' LEGAL COUNSEL TO SREI INFRASTRUCTUREFINANCE LIMITEDThe firm acted as Lenders' Legal Counsel to SREI Infrastructure Finance Limited in relationto the financial assistance comprising of rupee term loan facility of INR 450 Million forrefinancing the existing outstanding debt availed by Orient Green Power (Maharashtra)Private Limited for its bagasse based power project.

Select Speakerships

Mr. Girish Rawat, Partner, speaking at the Lex Witness Banking & Finance Legal Summit

2017 on 23rd June, 2017 at JW Marriot, JuhuMumbai

Mr. Siva Gopinatham, Partner speaking at The Lex Witness fifth Annual IT Legal

Summit 2017 on 16th June, 2017, at Le Meridien, Bengaluru

Mr. KPS Kohli, Associate Partner, speaking at the Lex Witness Real Estate & Construction Legal Summit 2017 on 26th

May, 2017 at Le Meridian, Delhi

Mr. Girish Rawat, Partner, speaking atthe Lex Witness Real Estate &Construction Legal Summit 2017 on 26th

May, 2017 at Le Meridien, Delhi

Ms. Maneesha Dhir, Managing Partner,speaking at the launch of IWIRC India on 31st

May, 2017 at India Habitat Centre, New Delhi

Boom time for law firms in the age of insolvency

June 26, 2017-Leading names in corporatepractice such as Shardul AmarchandMangaldas & Co, Cyril AmarchandMangaldas, Khaitan & Co, AZB & Partners,Trilegal, Dhir & Dhir Associates, and KesarDass B & Associates have created separateverticals or business divisions and aredeploying over 100 top-notch lawyersbetween them to tap new opportunitiesthrown up in the stressed asset resolutionspace. Business Standard

Stressed Assets open Floodgates for Insolvency Professionals

June 19, 2017-Alok Dhir of Dhir & Dhir, BahramVakil and Dushyant Dave are among theregistered insolvency professionals. These wouldhave established infrastructure and people tosupport their functions. Also, the insolvency lawprovides for Insolvency Professional Entities(IPEs), which are corporate structures where twoor more professionals can come together aspartners or directors. However, there are onlyseven such registered IPEs as of today, accordingto the IBBI website. These are IRR InsolvencyProfessionals, a firm floated by Delhi-basedlawyer Alok Dhir. Business Standard

Making Headlines

Who Among The 353 Resolution Professionals Can Manage 12 Large Insolvencies?

Jun 19, 2017-Alok Dhir, managing partner at law firm Dhir &Dhir Associates and director at IRR Insolvency Partners, says itwill be extremely difficult for insolvency professionals todeliver efficient services to medium and large scale companieson their own. Dhir makes the case for IPEs over externaladvisors early in the process. Bloomberg Quint

Essar Steel vs RBI: Testing the Insolvency and Bankruptcy Code in courts

July 10, 2017-Even as the first legal challenge to the new Insolvency and Bankruptcy Code (EssarSteel vs the Reserve Bank of India) plays out in the Gujarat high court, experts appear divided overthe impact that litigation would have on the efficacy of the nascent insolvency resolution process.This comes at a time when more such companies that are involved in insolvency proceedings arelikely to put the Code to test in the courts. “The Code is as litigation-prone as any other new law,”says Alok Dhir, managing partner, Dhir & Dhir Associates. Business Standard

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DISCLAIMER

This Newsletter is for informational purposes only. The information and/or observations contained in this newsletterdo not constitute legal advice and should not be acted upon in any specific situation without appropriate legaladvice. The views expressed in this newsletter do not necessarily constitute the final opinion of Dhir & DhirAssociates and should you have any queries, please feel free to contact us at editor@dhirassociates.com