Steps of the Eviction Process: How Does Eviction Work in Indian Courts?

Steps of the Eviction Process How Does Eviction Work in Indian Courts

 

The eviction process means evicting a tenant out of the rented property by following a legal procedure as prescribed by the law of the land. In India, the parties often hire a civil lawyer dealing in rent matters to help them get relief from the Indian court.

The rent agreement mostly governs the landlord-tenant relationship. The agreement’s construction is within the broad framework of landlord rights and duties and the tenant rights and responsibilities, as prescribed in the Rent Act applicable to the parties.

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Landlord rights – A landlord has the right to

  • choose the tenant
  • receive the rent on time
  • collect security deposit
  • get the property vacated for repairs
  • get the information from the tenant if he is carrying out any repair
  • seek eviction of the tenant on available grounds.

Tenant rights – A tenant has the right to –

  • have fair rent
  • receive back the deposit on vacating the premises
  • amenities for reasonable living
  • safe and secure habitat
  • enjoy peaceful possession
  • protection from illegal eviction.

Indian court allows the eviction of a tenant from rented premises only if there exists a ground for eviction as per the Act. Rent laws differ from State to State. But

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In general, the grounds of eviction are:

  • Non-payment of rent
  • Violation of term of the agreement
  • Subletting without permission of the landlord
  • Acts which deplete the value of the property
  • Using the property for illegal or anti-social activity
  • The bonafide personal necessity of the landlord

The eviction process begins with hiring a civil lawyer and sending a notice:

The first step is to hire a civil lawyer and communicate to the tenant the reason for seeking his eviction. The landlord sends an eviction notice to the tenant through his lawyer. An opportunity is given to the tenant to correct the issue involved, e.g., for non-payment of rent; the tenant can pay the rent and settle the matter.

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The period of the expiry of the notice must be clearly stated. The landlord gives a reasonable time to the tenant to act on his complaint. If the tenant continues to stay even after the notice period’s expiry without making up for his fault, the landlord can file the ejectment petition.

There may be situations like tenant using the premises for illegal activities, where one need not send a prior notice.

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Moving the court: 

The next step for the eviction process is filing a petition for eviction. The authority empowered under the Rent Acts to entertain the eviction petition is designated as the Rent Controller. The rules of Civil Procedure Code applicable to civil suits in Indian Court, as modified by the respective State Rent Acts, apply to the proceedings before the Rent Controller.

The procedure followed is as under:

  • The landlord who seeks to evict his tenant files an ejectment petition before the Rent Controller (RC), based on grounds mentioned in the Act.
  • If the Rent Controller is satisfied that there is sufficient cause to entertain the landlord’s petition, he issues summons to the tenant.
  • Once the summons is issued and served as per law, the tenant must appear before the RC.
  • If the tenant fails to appear, the order is passed based on the facts given by the landlord.
  • On appearing, the tenant files an affidavit stating the grounds for contesting the eviction petition.
  • If the RC is satisfied with the reasons disclosed in the tenant’s affidavit that the landlord is not entitled to evicting him, he permits the tenant to contest the petition.
  • Both the parties are heard, and evidence is recorded.  The evidence can be any document or oral testimonies.
  • RC decides the application based on evidence and the arguments put forward by the parties. He passes the order.
  • If the order favors the landlord, the tenant has to vacate the premises.
  • If the tenant refuses, the landlord files for execution of the said order, which may be executed through Police in case of stubborn tenants.
  • An appeal may be filed by the aggrieved party against the order of the RC

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Landlords must remember that the Rent Laws provide for grounds for eviction and also the steps to be followed for the eviction process. Any violation of the same is taken seriously by the courts, and the same goes against the landlord. So, avoid taking the law into your hands.

Importance of title deed and other property ownership documents

title deed and other property ownership documents

The title means ownership. In terms of property, it is a legal right to own. Any deed, i.e., a written document that confirms the ownership is the title deed. It mentions the rights and obligations of the owner.

How important is the title deed:

It is incredibly crucial to check the property papers before dealing with any property. Title deed is the most sought after property document as it informs the whole world about the owner.

Imagine a situation that you are an owner of a property, but nobody believes it as you do not possess any document to prove your ownership. The situation worsens if someone else illegally occupies the said property and claims to be the owner. Holding a clear title to the property protects the owner against other claimants. It is proof of ownership and helps the owner assert and exercise his property rights.

Any transaction of transfer of ownership is recorded in writing, and the document becomes a deed. Depending upon the transaction’s nature, it can be a gift deed, sale deed, transfer deed, Will, etc. Such a document becomes a title document for the transferee, and he holds it as evidence of ownership. The sale deed confirms the transfer of ownership from the seller to the buyer. A registered sale deed becomes an ownership deed and a crucial document for the buyer to establish his rights.

It is imperative to possess the essential property documents and get the municipal/revenue records updated whenever there is a property transfer so that the property remains secure. It is more relevant for NRIs as they don’t visit their property frequently, and chances of adverse possession are far more.

What more a title deed does:

  • Whether it is a property ownership search/home title search/land search, the idea is to be sure about the ownership. A valid title deed helps the owner in further transactions. Having ownership right over the property means a right to sell it further, transfer it, mortgage it, gift it, etc. A buyer of the property always asks for the original documents from the seller to ensure he has the right to sell it.
  • It is required to avail loan from Bank. Banks ask to deposit ownership documents as security against the loan. When there is a default, banks use such documents to transfer the ownership and recover their dues.
  • In the absence of any document proving the ownership, it is hard to defend one’s claims over the property.
  • The existence of the document also helps to ascertain the authenticity of the property transaction.
  • It also informs about the liabilities and liens attached to the property.

Title deed and property search: 

Genuineness of deed of title is another critical issue. Most property fraudsters use fake documents, especially the property papers, to defraud others. The authenticity of such documents can be verified by a process called the title search. It is a way to retrieve the property document revealing the ownership and to rule out any defect in the same.

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We have to verify from the records maintained by Revenue Authorities, Registration department, local municipal offices as the case may be. In India, we are now moving towards the digitization of all these records. Still, in most of the offices, the records are maintained manually. It makes the task difficult. We have civil lawyers dealing in property matters and property law firms who provide the aforesaid services.

There are situations when the title search becomes necessary:

  • A person is not even aware that he has a share in the joint property or an heir to some ancestral property.
  • In agriculture properties, land title is often not clear.
  • It helps to find out the complete chain of ownership to ascertain inheritance rights.
  • There is a doubt about the title deed’s genuineness, and we need to confirm its authenticity.
  • The title search also provides information regarding any encumbrances or government dues towards the property.
  • The banker also needs to verify the property title when it is offered as security against a loan.

A deed of title is a vital document, and the owners need to keep it safe.

Property law in India and its relevance for NRIs

Property law in India and its relevance for NRIs

Property law in India is a vast subject. It is a study under various statutes like The Transfer of Property Act, The Indian Contract Act, Registration Act, Indian Stamp Act, RERA, Land Acquisition laws, etc. Apart from these, for NRIs, special rules and regulations are provided under FEMA by RBI.

Property can be moveable, immovable, tangible or intangible.

There are various property-related activities like an investment in a property through sale and purchase, renting out a property, registration of property documents, updating revenue records and municipal records, exchange and transfer of ownership of property, etc.

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Many top lawyers, including property lawyers and property management companies, offer services to deal with such activities. There are property lawyers in India, assisting in property-related documentation and transactions and settling legal disputes if the need arises.

Property law in India covers a lot of areas. Some of the everyday activities relate to:

  • Under property law in India, real estate investment is a significant area. It has been an attractive option for NRIs and serves the dual purpose of maintaining a connection with roots and profit-making. NRIs are permitted to invest in residential and commercial properties just like any other resident Indian. But for agriculture and plantation, the requirements are different. For promoting the buying and selling of the real estate, the Government provides different loan options through banks and other financial institutions. NRIs have to be aware of the regulations made by RBI under FEMA for the sale and purchase of the real estate, payment as well as repatriation of sale proceeds.
  • For the purchase of property by NRI, money is remitted through proper banking channels. Funds maintained in NRE/NRO/FCNR accounts can also be used. A loan facility is available to buy a house and banks transfer the amount directly to the seller or developer’s account.
  • Intangible property like shares, bonds, and intellectual property rights like patents, copyrights, etc. are also a part of property law in India. NRIs can invest in Mutual funds, Government Securities, Bonds, Equity and Hybrid Funds, etc. Investment in Mutual Funds offers higher returns as compared to investment in Fixed Deposits but is subject to market risk. Mutual Funds Investment is regulated by SEBI (Securities Exchange Board of India).
  • Other property matters concerning NRIs like title search, especially in case of agricultural properties, transfer of ownership in case of inherited properties, settling the issues related to distribution or partition of joint properties or ancestral properties, etc., all come under the purview of property law in India. 
  • Most property-related transactions can be done by NRIs either by personally visiting India or through a power of attorney.

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We have top lawyers, property lawyers, and property management companies taking care of such investments/property matters for NRIs.

The relevance of property law in India for NRIs

The property market in India offers unlimited investment opportunities for NRIs. All investments made in India should abide by the respective laws. There is no doubt that property law in India is relevant for NRIs. Ignorance of the law is no excuse. It is vital to protect and safeguard the huge amount of investments which NRIs make. There has to be clarity of rights and government policies. NRIs need to remain updated on property law in India.

For any investment in property by NRIs, property laws, TDS rules, and tax implications go hand in hand. NRIs must be aware of the tax implications of all the property transactions they wish to undertake. Rules and regulations under FEMA have to be followed. It is imperative to comply with all the legal formalities to avoid any dispute later on.

Property Management Companies help NRIs to manage their property in India while staying in their native place.

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NRIs face many questions when it comes to property-related transactions in India. Some of the most common queries are:

Experts in the legal and financial field, including property lawyers, are available to assist NRIs in understanding the property law in India and helping them sail through the process.

How to File a Claim as Financial Creditor Before NCLT

How to File a Claim as Financial Creditor Before NCLT

Under Insolvency and Bankruptcy Code, 2016,  has been set up for resolving the issues related to Corporate and Banking Sector.

A financial creditor can approach the NCLT as and when required. Under IBC Code, a financial creditor is as an individual to whom a financial debt is owed and incorporates an individual to whom such debt has been legally assigned or transferred.

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Who can file the application?

  1. A financial creditor can file an application either by itself or jointly with other financial creditors.
  2. Govt. notified person: Any other person notified by the Central government, on behalf of the financial creditor can also file the application. Following notified person may file an application for initiating Corporate Insolvency Resolution Process (CIRP) on behalf of the financial creditor: –
  3. A guardian
  4. An executor or an administrator of an estate of a financial creditor
  5. A trustee (including debenture trustee)
  6. An authorised person who is duly appointed by the Board of Directors of a Company.
  7. Depositors: An application for initiation CIRP, where a financial debt is in the form of securities or deposits, shall be jointly filed. This application should not be filed by less than 100 of such creditors in the same class. Also, it should not be less than 10% of the total number of such creditors in the same class, whichever is less.
  8.  Creditors and their Class: An application for initiation of CIRP shall be filed jointly, where a financial debt owed by a class of creditors exceeding the number as may be specified. It should be filed by no less than 100 of such creditors in the same class. Also, it should not be less than 10% of the total number of such creditors in the same class, considering whichever is less.
  9. Home Buyer: For a home buyer, the application shall be filed jointly, under the same real estate project, by not less than 100 of such allottees or not less than 10% of the total number of such allottees, whichever is less.

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Initially, the applicant has to satisfy the Tribunal on the lines of maintainability of the case. At this stage, it is considered by NCLT whether the application/case falls inside the ambit of Financial Creditor or Operational Creditor. An application before NCLT, against a corporate debtor, can be filed by a financial creditor, where the amount of the default is minimum one lakh rupees.

The IBC Code defines the procedure involved in NCLT proceedings. When a default has happened, a financial creditor can file an application for starting the Corporate Insolvency Resolution Process (CIRP). After that, an IRP (Interim resolution professional) gets appointed by the NCLT to begin the procedure of CIRP. The financial creditor must prepare a claim regarding his debt pending towards the debtor and file the same to the IRP, and then IRP acts upon the same and prepares a resolution plan.

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Filing of the claim has to be in Form-C, according to Regulation 8 of IBBI (Insolvency and Bankruptcy Board of India) (Insolvency Resolution Process for Corporate Persons) Regulations, 2017. When Form C of the applicant is acknowledged and accepted by the Tribunal, that applicant has got the right to be part of the Committee of Creditors (CoC). The CoC is empowered to finalise the resolution plan.

The NCLT may also reject the claim application at the initial stage of filing. The NCLT shall consider and examine the default and its existence from the records of an information utility or based on all other evidence furnished by the financial creditor within fourteen days of the receipt of the application. After a detailed observation by the Adjudicating Authority, the proceedings move forward.

The Adjudicating Authority once gets satisfied with the evidence and records decides that no default has occurred. The Adjudicating Authority makes sure, before any action, that the application is complete, or if any proceeding regarding disciplinary action is pending against the proposed resolution professional. It may, by order, reject such an application.

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The Adjudicating Authority, before rejecting the application, gives a notice to the applicant. This notice is for the applicant to rectify the defect in his application. Within seven days of receipt of such information from the Adjudicating Authority, the applicant can resubmit the application duly rectified.

Hence, the partition of property among the heirs of an individual will be divided according to the above-mentioned procedure.

Tax for NRIs on gifts of money and property from resident Indians received through gift deeds

Tax for NRIs on gifts of money and property from resident Indians received through gift deeds

Gifts in India are taxable under the Income Tax Act. Gift can be in cash or kind (moveable or immoveable property and other assets specified under the Act). A resident Indian can make a gift to an NRI through a gift deed, but there is a claim on gifts received by NRI.

NRIs are taxed for income that arises in India or is received or accrued in India or deemed to have arisen, received, or accrued in India.

A gift to an NRI by the way of gift deed from a relative is not income and thus not chargeable to tax. Gifts in excess of Rs 50,000/- are subject to tax if gifted by a non- relative. There are certain other exemptions. No tax is payable if a gift is given in contemplation of the recipient’s marriage, death of the donor, or under a Will or inheritance.

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Gift by Remittance

In case of a gift by remittance from a resident Indian, it was not taxed as the transaction is completed in a foreign country bank account where the NRI receives the money. This income is neither received in India nor accrued in India, therefore, not liable for taxation. The gift of money made to NRI was not charged for tax. There is no claim on such gifts received by NRI.

Under the scheme called Liberalized Remittance Scheme (LRS), a resident Indian can remit amount up to $250,000 a year for various purposes like gift, donation, maintenance of close relatives, etc.

Loopholes in Gift Deed

A resident can remit to an NRI even if he is not a relative. And there is no claim on such gifts received by an NRI through gift deed. Taking advantage of the same, many rich people in India used to transfer by way of gift a considerable amount of money to NRIs and avoid tax on their taxable income.

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Now there is an amendment in the rule. It says that the sum of money received by a person outside India from a resident, without any consideration, is deemed to accrue or arise in India. Thus, the gift of money received by a person outside India by way of remittance from a resident would be taxable in India. But if the donor is a relative, remittance is not taxable i.e., no claim on this gift received by NRI if he is a relative of donor.

The amendment is only for the gift of money and not property. Accordingly, if the property situated in India is transferred to an NRI by way of gift through a gift deed, tax is payable by NRI if the value of such a gift is more than Rs 50,000/-.

Gift Taxation Rules

A person outside India means a non-resident or a foreign company. All the money transfers without any consideration on or after July 5, 2019, will be treated as taxable from FY 2019-20.

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Thus for Gift taxation purposes, the place where the gift originated becomes significant rather than the destination.

An NRI has to file his income tax return in India and disclose his income from all the Gifts received. NRIs are now included as income tax assesses and liable for a claim on the gifts received by them through a gift deed.

However, if India has signed a double taxation avoidance treaty with the country of the recipient, the relevant clause will apply. In such a case, the tax may not be payable.

As a top lawfirm in India, we offers a wide array of services to individuals as well as organizations in matters of taxation in India. All the tax issues faced by NRIs are handled by our premier legal management firm.

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