INDIA Law and Practice Contributed by: Vivek Chandy, Archana Tewary, Kumarmanglam Vijay and Brijita Prakash, JSA
Customary remedies would be available to enforce indemnity claims through arbitration or litigation, with arbitration being preferred. R&W insurance is slowly becoming more popular due to reduced premium costs; however, please see 2.3 Effecting Lawful and Proper Transfer regarding title insurance. 2.6 Important Areas of Law for Investors The most important areas of law for an investor to consider when purchasing real estate are: • laws applicable to acquisition, transfer and registration of immovable property; • building by-laws and zoning regulations; • Indian exchange control laws for foreign investors; • corporate laws; • taxation laws; and • succession and inheritance laws. 2.7 Soil Pollution or Environmental Contamination The buyer will not be deemed liable for soil pol - lution or environmental contamination if they can prove that they were not responsible for it. In most large transactions, buyers/investors con - duct technical due diligence including soil test - ing to rule out such issues. The buyer is also indemnified against any action initiated by the government for contamination of a property prior to its purchase. Proceedings for environmental contamination are very infrequent, although this may change as environmental issues are attract - ing more recognition. Approvals are issued with respect to the prop - erty and pass along with the property to the buy - er. Presently, the seller/buyer has no disclosure obligations towards environmental authorities. However, the owner/developer of the property
is required to submit periodic reports to authori - ties confirming compliance with environmental approvals and renew them periodically. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law The buyer can ascertain permitted uses of prop - erty based on zoning regulations/maps issued pursuant to state-specific town and country planning statutes. To aid the development of strategic areas, the government may allot land with certain obliga - tions imposed on its development. Development agreements typically seen in the private sector are not common for lands owned by public authorities. In certain cases, governments award concession agreements for development of land for specific purposes. 2.9 Condemnation, Expropriation or Compulsory Purchase The Indian Constitution no longer recognises the right to hold property as a fundamental right. However, Article 300(A) was included in the Constitution to affirm that no person would be deprived of their property except by author - ity of law. State governments are authorised to acquire lands for public purposes. The current land acquisition statutes prescribe: • payment of compensation up to four times the market value in rural areas and twice the market value in urban areas; • safeguards for tribal communities/other disadvantaged groups, compensation for lost livelihood, caps on acquisition of multi-crop and agricultural land; • return of unutilised land to landowners; and
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