The Real Estate (Regulation and Development) Act, 2016, is an effort to improve customers’ confidence in the real estate sector. It is an initiative to protect customers’ interests, promote fair play in real estate transactions, and ensure timely execution of projects. Real estate transactions are often complex and involve legal formalities that buyers may not understand until too late. Most of the buyers do not know what a transparent agreement should contain and how to safeguard their interests as buyers.

But,The real estate Act will lead to transparency in the sector, because :

  1. Developers as well as real estate brokers will have to register themselves (The real estate Act states that projects of above 500 sq. meter be compulsorily registered with the real estate regulator once it is set up. This will bring a large proportion of projects under the purview of the regulation. But each state will have the flexibility to reduce the threshold as per regional requirements. So, a state can also bring in even smaller projects or those that have less than eight units, under the Act.),
  2. To register a project, a builder will have to disclose names of promoters, project layouts, plans of development works, land status, statutory approvals’ status, draft of builder buyer agreements, and names and addresses of real estate agents, contractors, architects and structural engineers, to the authority. Once a project gets registered, all this information will be readily available on the authority’s website, which should help buyers take more informed decisions. Plus, the information has to be regularly updated by the developer. A clear picture of number of units sold and construction status has to be available on the website. ,
  3. Will not be able to launch projects without proper approvals,
  4. Moreover, they will not be able to change plans without the consent of at least two-thirds of buyers,
  5. Builders will also have to deposit at least 70% of the sale proceeds in a separate account to meet construction cost of the particular project, compared with the earlier proposal for 50% or less.

The agreement with customers will also have to be more transparent than what it has been. It will have to include clauses such as:

  1. Advance money of not over 10% before entering into a sale agreement.
  2. Possession date, specifications of the property, construction schedule will be there in the agreement and compensation to be paid to buyers for default or delay, which should be the same as that charged to buyers for delayed payment from their side.
  3. Liability of builders for structural defects for five years (instead of the earlier two years) and clearly defined carpet area, which means customers must know precisely how much space they are going to get for the price paid.

The real estate sector is facing issues related to liquidity, huge debts, and delays in project completion. But ultimately, it is the customers that bear the brunt due to increased pricing.

It is hoped that the situation will change once the Act is implemented, and more investors are attracted to the sector, which will, in turn, improve customer confidence, and give the sector a much-needed growth impetus. It will also bring in more confidence among global investors, providing better access to structured capital, which is in short supply now.

The Act will have positive consequences for the sector in terms of transparency, accountability, and avenues for grievance redressal, which will mean lower litigation cost for buyers. It will also ensure that only serious players will remain in the sector leading to greater transparency in the sector.

There are multiple reasons for such delaysfunds being diverted by developers, lack of funding options, and slow sales. Implementation of the Act will bring project delays under control as funds will not be diverted, more funding avenues will be available for builders at a lesser cost, customer confidence will improve in the sector and home buying process will be easier to follow.


  1. Many departments and processes have to be streamlined to make this part of the Act successful. Land records need to be updated. Parity between circle rate and market rate needs to be established. In some localities, there is a gap between these rates. Some consumer activists share the view.
  2. We cannot overlook the fact that a completion certificate that is issued by a government agency should necessarily be issued in a time-bound manner. So, a time frame should be fixed for government agencies to provide services. Otherwise, this can be used by the promoter as a plea for unnecessary delay.
  3. The Act has provisions for penalising developers in case of delays. But many developers say that the main cause of delay is slow approvals from government agencies. A single-window clearance is needed now, without which there may be cases where bona fide delays by developers may still result in an unfavourable penalty.
  4. Under the Act, if the registration is revoked by the regulatory authority, who will complete the construction? How will that be managed looking at such a vast number of projects?

Ultimately, it will be a win-win situation for developers as well as customers in the long term, which will restore much-needed trust, transparency, and growth. This will have a positive effect on the country’s economy as well.

The Act has been formulated. Now it has to be seen how soon states start implementing it.

What was the need for the amendment?

This is the third major amendment in recent times to the Negotiable Instruments Act 1881, prompted by dishonour of cheques in lakhs, shaking the credibility of the instrument, confidence of business community and choking courts. The 1988 amendment introduced penalty for issuing cheques which get dishonoured for want of fund in the bank. Since that provision, Section 138, was found insufficient to deal with the menace, the penalty was increased from one to two years imprisonment after a summary trial. Even this has not resolved the problem and at present 1.8 million criminal cases are before magistrates’ courts and appellate courts. One of the devices employed by dishonest drawers is to challenge the jurisdiction of the courts, stalling the proceedings. This was tried to be resolved by the Supreme Court in its 2009 judgment in Dashrath Rupsingh case.

What does the present amendment do?

The amendment adopts the basic principles laid down by the Supreme Court in the above case (Dashrath RupSingh case) regarding jurisdiction of courts and improves upon it in the light of the representations made by various stakeholders, including industry associations and financial institutions. Complications had arisen because a cheque was issued in one place on one bank, and presented in another place to another bank. The payer company might be in one corner of the country and the payee might be in another. The payee therefore had to chase the accused in distant places and even if he won, appeals would be filed in another court and arguments will continue for years. The Supreme Court found that even high courts had differed on the question of the choice of courts which should try the case. The present amendment removes such legal bottlenecks and speeds up the trial. Now the question of jurisdiction cannot be raised as the law is clear.

The new provision states that the holder of the cheque can file a criminal complaint before a magistrate where he resides and tendered the cheque. He need not go to the place where the cheque was issued or other courts. After this clarification, there is a single place to file the complaint. Litigation expenses will come down, and the drawers of cheques, including company directors will be more careful while signing such cheques. The government feels that these procedural changes will be fair to both parties.

What happens to cases already pending?

According to the newly introduced Section 142A, all cases which were pending in any court, whether filed before it or transferred to it shall go before the court having jurisdiction under the new procedure.

What is the other important proposed change in the Bill?

The new law also cures a deficiency in the definition of “a cheque in the electronic form”. The law as it stood presumed drawing of a physical cheque and signature. With the advance in technology it needed to be updated. Therefore, it is explains that “a cheque in the electronic form” means a cheque drawn in electronic form by using any computer resource and signed in a secure system with digital signature (with or without biometrics signature) and asymmetric crypto system or with electronic signature. The Negotiable Instruments Act borrows definitions of technical expressions from the Information Technology Act 2000.

What is insolvency?

Insolvency is a situation where individuals or companies are unable to repay their outstanding debt. It may be resolved by changing the repayment plan of the loans, or writing off part of the debt. If insolvency cannot be resolved, assets of the debtor may be sold to raise money, and repay the outstanding debt.

Why do we need a new law?

Insolvency resolution in India took 4.3 years on an average, as of 2015. This is higher when compared to other countries such as United Kingdom (1 year) and United States of America (1.5 years). These delays are caused due to pendency of resolution cases in courts and confusion due to lack of clarity in the current bankruptcy framework.

As the Joint committee on Insolvency and  Bankruptcy Code 2015 has submitted its report. Thus path for its passage in parliament seems clear. Here, I present  some important features of the Bill and some critical analysis on it.

Important Features:

The Bill has a number of helpful provisions for tackling large loan defaults.

First, it enables the early detection of financial distress by allowing any creditor to commence an insolvency proceeding the moment a default occurs. This is in contrast to the current scenario where principal or interest on a loan needs to be unpaid for at least 90 days from its due date to be classified as an NPA.

Second, the Bill contains very strict timelines for each step in the insolvency resolution process. Subject to a few exceptions, a resolution plan needs to be approved within 180 days, failing which the company goes into liquidation.

Third, it enables an investigation into the affairs of the insolvent debtor and the setting aside of fraudulent, undervalued or extortionate credit transactions that occurred in the lead-up to the insolvency. There are also penalties for concealing information, misrepresentations and defrauding creditors during the insolvency resolution process.

Fourth,New law is premised on the establishment of three institutions that currently do not exist – a regulator to be named the Insolvency and Bankruptcy Board of India (the “Board”), a new profession of insolvency professionals who are to be registered and regulated by insolvency professional agencies (“IP Agencies”) and information utilities that are designed to store and release information on debts and defaults. While it is understood that these institutions would take time to mature and develop, the new legislation should, at a minimum, specify certain things about their functioning to provide a starting point for implementation.

critical Analysis:

Let us think about the new regulator. The Bill vests the Board with wide-ranging powers. These powers include regulating insolvency professionals, insolvency professional agencies and information utilities, by laying out the eligibility requirements and standards for their functioning, carrying out investigations, and monitoring their performance. However, despite this vital role, the Bill does not envisage that the regulator will be established at the time the new law comes into effect. Ideally, the Board should be in place well before the new law comes into effect, to allow sufficient time for it to develop a regulatory framework for implementation.

The transition process for moving from the current legal framework to the new law needs to be thought through. The Bill needs to say which institutions will necessarily have to be operational at the time the new legislation comes into effect. To the extent that some institutions need more time to develop, it must specify the timeframe within which these institutions must be functional and the interim measures that would be in place until this point. For example, insolvency resolution professionals don’t exist as a profession today. As it is likely to take time to administer their examination and develop a sufficiently large pool of such professionals, could individuals or firms with other professional qualifications (such as lawyers or chartered accountants) perform the role of insolvency resolution professionals as an interim measure? Until information utilities are established and have robust procedures for gathering, storing and disseminating information on defaults, could any other body perform their function?

The two tribunals that are to hear insolvency and bankruptcy cases – the National Company Law Tribunal (The National Company Law Tribunal (NCLT) will replace the Company Law Board and the Board for Industrial and Financial Reconstruction, and be an overarching body for resolving insolvencies.It will be established under the Companies Act, 2013 ) for corporations and the Debt Recovery Tribunals (“DRTs”) for individuals – have their own set of problems. The NCLT is yet to become operational and the DRTs are, by all accounts, clogged with high case pendency. Both these tribunals would also continue to hear cases under their existing mandates in addition to those under the new law. This might not be an issue that can be fixed through the legislation, but the government must ensure that the NCLT becomes operational and increase the infrastructure and resources of both these tribunals if they are to hear insolvency cases in the efficient and time bound manner that the Bill envisages.


Countries the world over differ widely in the legal frameworks they have adopted for insolvency and bankruptcy. The US has what is widely acknowledged to be a debtor-friendly regime; the administrator-led system in the UK is more creditor-friendly; while the insolvency regimes in continental Europe fall somewhere in between these two models. However, studies have shown that ultimately the effectiveness of an insolvency regime depends not so much on the specific path the law decided to take, but on whether it is backed by strong institutions for implementation.

As we talk about market integration in agriculture through Electronic National Agriculture Market portal and also talk about moving toward a economic union by realizing GST. Similarly power sector too need reform such that dream of one nation, one grid and one price come true. It is in 2013 that southern part of India too got connected with the National Grid System and because of that on December 29,2015 no congestion was observed in the electricity grid and single price (2.3/kwh) was  discovered on the power exchange IEX.

Similarly Open Access policy was introduced under the electricity Act 2003  which allows consumer with electricity load above 1 MW  to procure electricity directly from electricity market. Recently Indian Railways the country’s largest single costumer of electricity , has been allowed to shift its purchases to an Open Access regime. Central and state government has come forward to address the DISCOM debt problem. Thus some of these above steps in the direction to discover a single market price for power around the country.

But following challenges still remains:

  1. In 2014-15 the addition of generation capacity was 26500 MW which is much higher than the average annual addition in last five years of 19000 MW. But ability to produce more power is not matched with the  ability to lift the power. Thus power plant ran at historic low load factor of 60% and also due to the stressed discom condition.
  2. Tariff segmentation(10-12 categories are present such as Agriculture, Poultry Farm, Businesses etc) has reached hilarious level, thus complexity of tariff schedule prevents economic actors from responding sufficiently to price signals.
  3. Some states have imposed significant barriers to Open  Access Policy by imposing the cross-subsidy surcharge and additional surcharge for purchasing electricity from the power exchanges (PX) . This problem was meant to be addressed by the National Tariff Policy (2006), which established a methodology for determining the cross-subsidy surcharge to be levied on Open Access consumers, with the goal of reducing it over time. Nonetheless, cross-subsidy surcharges over the years have gone up.
  4. The growth rate of captive power generation between 2006-07 and 2014-15 is 9.3 per cent compared to 4.6 per cent for electricity procured from utilities. This trend could be exacerbated in the coming years, as the decline in oil prices and the cost of renewable energy alternatives may prompt a further shift to captive power.

Though government is committed to address DISCOM debt problem and AT&C losses issue under UDAY scheme. State governments need to rationalise Tariff segmentation from present level of 10-12 to 2-3.While Confederation of Indian Industry is demanding following measures for making single market for power :

i) A new legal architecture for making independent regulators truly independent (including the Central Electricity Regulatory Commission).

ii) Examining the concept of state regulators being replaced by a smaller number of effective regional regulators.

iii) Setting up of a National Power Distribution Company (NPDC) that begins to effectively challenge the hegemony of state-owned discoms. The NPDC can equally well fulfil other pressing objectives of picking up stranded capacities, price-pooling across diversified sources of supply (for energy security, plus encouragement to renewables), providing a national pricing benchmark as well as facilitating a rapid move towards effective Open Access.

 In the Westminster system of government, the Speaker of the legislature has considerable power and independence. This is a cherished product of a long process to secure the legislature’s independence and fairness. The considerable discretion they enjoy comes with the assumption that it will be used sparingly or wisely.

However, there are at least two recent instances in which Speakers of the legislature have used this discretion to take debatable decisions. The first instance is from the state of Uttarakhand, which was thrown into crisis when the Speaker of the Legislative Assembly refused to allow a division – the counting of legislators’ votes – on the state budget. The Congress-led government of the state had reportedly lost the confidence of several members of the legislative party; it was possible that the Appropriations Bill would have been defeated had votes been counted, and the government would thus have had to resign since it was a money Bill. By refusing to grant a division, the Uttarakhand Speaker in effect declared the budget passed and insulated the government from a key test of democratic legitimacy. The second instance is at the Centre, where the Speaker of the Lok Sabha has permitted a proposed law, the Aadhaar Bill, to be introduced in the House as a money Bill. Whether regulatory legislation such as Aadhaar meets the definition of a money Bill – traditionally reserved for proposals that alter taxation, borrowing, or affect the Consolidated Fund of India – is doubtful. But, just as it is a Speaker’s traditional right and duty to determine when a division is needed, her decision on whether a bill is a money Bill has also traditionally been considered to be the last word. It is worth noting that the two major national parties are on opposite sides of the fence in terms of the debate at the state and the Centre – in Uttarakhand, the Congress is defending the rights of the Speaker, while in Delhi it is questioning them – indicating that this is possibly a problem of institutional weakness that transcends political parties.

                                                     Unfortunately, India now faces a situation where the decisions of the traditionally independent Speaker of the House are being discussed by another branch of government, namely the judiciary. The Supreme Court has stayed an Uttarakhand High Court judgment that rescinded President’s Rule imposed on the state after the Speaker’s controversial ruling. Meanwhile, it has asked the Union attorney general for his views on a petition filed by a Congress leader questioning the introduction of the Aadhaar Bill as a money Bill. So the judiciary and the executive will now discuss a decision that has traditionally been the sole prerogative of the Speaker of the legislature. The elements of a full-blown constitutional crisis are visible. What is needed is to get ahead of the problem. Perhaps the tradition of the Speaker being notionally completely independent of the other branches needs to be revisited. Rather than letting things deteriorate and forcing the judiciary to get involved, the legislature itself should consider what checks and balances can be imposed on the Speaker’s discretion in order to ensure such situations are not repeated.

Does marital rape amount to sexual violence? It certainly is part of it, and when a woman says she is sexually violated, that is not the only thing happening to her – it is often coupled with the husband not giving money, or beating her. It sounds sensational to say that India must do something. But what must India do? In some cases, the wife who is facing abuse may not want a divorce; she may want a roof over her head. Criminalising does not give her this relief. Also, conviction in ordinary rape cases is very low. It is higher when victims are under 10 years of age. At ages 15-18, it gets low. After that, it gets worse. If a woman says she has been abused by her boyfriend, the conviction rate is abysmal.

If marital rape is criminalised then woman will have to present her case in the session’s court. She has to prove that on that particular night, sex was without consent, that she was not in the mood for it, or he had forced her after she had gone to sleep, or was ill. That will be a challenge.

Lawyers could abuse this too. They will expect huge amounts of money from the victim for filing such cases. That is what we are seeing happening today. This drains the woman economically. The lawyers also tell her that if she is filing charges for rape, the husband will choose to settle, but the husband often fights to try and prove her wrong.

Under 498(a), if the complaint is proved false, men’s groups are demanding that the woman has to pay compensation. That demand will come in the case of marital rape laws too. All this has not helped women at all.

So What alternatives their to help her in such a case?

In the Domestic Violence Act, cruelty is described in various ways- for example, economic violence of not giving money to the wife, physical violence like beating, and emotional violence like humiliating her body or her parents. Then, there is also sexual violence. Domestic violence is a civil law and it gives you remedy. Women can ask for protection and maintenance; they can ask for a restraining order against their husbands. Further, under 498(a) of the Indian Penal Code, any kind of physical or mental or emotional harassment is explained as cruelty. Under explanation ‘b’ of the same section, making demands for dowry is described as punishable. It leads to three years imprisonment, and is dealt with at the magistrate’s court. For the Domestic Violence Act too, the forum is the magistrate’s court.


We don’t need a change in the law to criminalise it, while we need a change in perspective. It should be dealt with 498(a) and the Domestic Violence Act, so that it gives protection to women. If there is a woman being abused, file a case under those laws and let’s see how they progress. If it does not work, why is it not working? We need to focus on that.

At present, farm marketing varies not only from state to state but also within the states, with each wholesale mandi being governed by its own Agricultural Produce Marketing Committee (APMC). These mandis require separate licences and they charge different marketing fees. The use of technology is low, which means that there is very little transparency in transactions, which eventually hurts farmers.A pan India trading portal , E-National Agricultural Market (NAM) is designed to create a unified national market for agriculture commodities. The first-ever National Policy for Farmers brought out in 2007 by the United Progressive Alliance government also mentioned this need.  The new integrated electronic platform begins, in a limited way, to address many of these problems. Some features of E- NAM as follows:

  1. Farmers can showcase their produce online from their nearest market and traders can quote price from anywhere.
  2. Results in increased number of traders and greater competition.
  3. This would allow them to escape the cartels that dominate local mandis and strangle the freedom to trade.
  4. Ensure open price discovery and better returns to farmer.
  5. Will cover 585 markets across country in three years during first phase. India has 2477 principal mandis and 4843 submarkets  created by the APMCs.

Limitation in implementation of E-NAM: Wide quality variation in farm produce within a state , and even wider variations across states, pose a challenge for the new market. Commodities with similar standards nationally are few. Wheat in Punjab and Haryana is of medium quality while in MP and  Gujrat it is of superior. An electronic platform can only trade standardise commodities. For the rest , the NAM might not be the right platform. A state agriculture market model launched in 2009 by the NCDEX , provide some lessons in market integration. The Karnataka Model  a joint initiative of govt of Karnataka and NCDEX e- Markets, was the first such initiative.

But it is dangerous to presume that a model that has worked well at the state level will automatically succeed at the national level as well. There are too many prerequisites for that to happen. The three most critical among them are a single wholesale trading licence valid across the catchment area, a single-point levy of market fees, and e-auction as the mode for price discovery. Currently, there are too few warehouses equipped with facilities for weighing, grading and standardisation of stocks sold through the electronic platform. Moreover, aggregators would need to emerge that pool together small marketable surpluses of individual farmers for sale to bulk buyers to attract competitive bidding. The Small Farmers Agribusiness Consortium (SFAC), the nodal agency for running the new electronic platform, can serve as an aggregator through its existing or specially created local units.

Getting states on board for full agricultural marketing reform will also be difficult.

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