Interviews

Aradhana Bhansali, Partner, Rajani Associates, on real estate law, arbitration, and corporate practice

Aradhana Bhansali graduated in law from G.J. Advani Law College, Mumbai  in 2000. She went on to pursue her L.L.M from University of Mumbai in the year 2002 and has done Financial Management from N.M.I.M.S. She carries with her an experience of fifteen years. She has experience handling Real Estate transactions including Hospitality transactions, IT Parks, Development and Re-development projects, SEZs, Testamentary matters. Aradhana has also, in her years of practice, handled a number of cases pertaining to civil litigation and arbitration. She is currently Partner at Rajani Associates, where she handles mostly the Real Estate and Trusts related practice of the Firm.

When she’s not working, Aradhana enjoys writing.

In this interview, we speak to her about:

  • Her opinion on the Benami Act, Real Estate Act, and the Government SEZ Policy
  • Her diverse experience
  • Being a corporate lawyer

How would you introduce yourself to our readers?

In the words of Sir Walter Scott, “a lawyer without history or literature is a mechanic, a mere working mason; if he possesses some knowledge of these, he may venture to call himself an architect”. I am, by nature, curious and an explorer constantly learning the law and its application, its history and reason. I am constantly in thought and prefer doing multiple tasks at one time because monotony can affect my output.

 

What motivated you to pursue law?

While I was doing my Financial Management studies, I would participate in group discussions and presentation though not in a very structured format. At that time my sister had filled up my forms for the three year law programme in G.J.Advani Law College and was keenly inclined to do my M.B.A though would attend my law lectures in the morning. I accidentally started mooting in Law College and enjoyed it so much which led me to think seriously about law as a profession. The ability to filter relevant information and moot before a forum with your contentions and submissions and constantly learning how facts and structures change the outcome of a situation is very interesting.

 

Could you tell us about your experience at law school? 

As stated above, I was actually keen to complete my M.B.A and take up a corporate job. Law school teaches us elementary knowledge and concepts, however, the application of these concept are totally different in practice. The knowledge what a law student gains during the program instills confidence. Nothing learnt goes waste.

 

Tell us something about your internship experiences while at college.

I haven’t done any internship because I was pursuing my other post-graduation course. However, I understand that an internship gives a law student gives a flavour of the actual process and application of law which makes it easier when one actually starts practising law as full-fledged lawyer.

 

What are the essentials required to be a good corporate lawyer?

I would say a good lawyer needs to be curious and question everything before accepting facts as they are. There is no substitute for self reading, learning and deliberations with others who have different and contrary views to help keep you sharp and able to think on your toes. It is also very essential to keep yourself updated with the constant changes and modifications in the rules and law which is by nature constantly evolving and dynamic as converse to static and stagnant.

 

How has the experience at Rajani Associates been?

I have been with Rajani Associates for the last seven years. Since Rajani Associates is a full service law firm, I have had assignments covering various facets of law be it litigation, real estate, private equity, etc. Of course, this has been possible because of our Managing Partner’s belief in the capabilities in all of us.

 

Your views on The Real Estate (Regulation and Development) Act, 2016?

(The act has been hailed as a legislative measure to protect home buyers. Some builders have claimed that the Act will destroy small builders.)

The Real Estate (Regulation and Development) Act, 2016 (“RERA“) is a central enactment which is aimed at transparency and regulation of construction and building activities across the country. However, Maharashtra already had the Maharashtra Ownership of Flats Act, 1963 (“MOFA“) which in my opinion is a beautiful legislation, along with an extensive body of judicial precedents which has fortified the regulation for transfer, ownership and conveyance of property within the State. Therefore, further strengthening MOFA by providing for a regulator and stringent procedure and checks would have along the Indian Penal Code (“IPC“) would have provided a formidable arsenal to deter unscrupulous and unethical practices in the real estate sector. The introduction of RERA has certain novel features such as: (i) a central regulator; (ii) procedural rules to be to govern procedure for each state; (iii) deposit of seventy percent (70%) of monies received from purchasers to be deposited in a scheduled bank to be used exclusively for the project. RERA read together with the recently amended Benami Transactions (prohibition) Act, 1988 has put in place a host of stringent measures to ensure that property (immovable) and record of title is linked to the source thereby checking monies and funds invested and utilised in the real estate sector. The legislature has indeed put in place checks and balances to ensure that honest and genuine home buyers have their interests protected and their right to possession of premises without unreasonable and unnecessary delays is protected. Whenever change is introduced, it is perceived as suppressing and limiting freedom, however converse to such belief, the new enactment is a step forward to balance the developers’ and flat purchasers’ rights and obligations.

 

What do you think is the status of Arbitration under the current system?

(The Economic Times recently reported that in a bid to improve India’s rank in the ‘Ease of doing business index’, the Department of Industrial Policy and Promotion (Government of India) has proposed allowing companies to go in for voluntary Arbitration without having to seek the Court’s permission.)

The Arbitration and Conciliation Act (Amendment of 2015) introduced reforms which aimed at reducing the grounds under which an award of an Arbitration Tribunal may be challenged as also sets out a time frame within which the process must be completed to provide for speedy and effective dispensation of justice. Further, regulating costs and fees of Arbitral Tribunals puts a check on escalating costs often associated with arbitration as there was no (prior to Amendment) specified fee or amount set out under the Act. It has always been voluntary for companies to submit their disputes to arbitration except certain types of matters pertaining to winding up and offences or defaults of a criminal nature which have to be referred to the appropriate forum (courts or tribunals). In addition to the amendment to the Arbitration Act, the Commercial Courts Act, 2015 was enacted by the legislature to further provide for setting up of commercial courts to speedily dispose commercial disputes over a value of  ₹1,00,00,000/- and other requisite conditions. Thus emphasising further on ease of doing business and also when read with the Arbitration Act, provides for speedy and effective resolution of disputes and disagreements among companies. However one must remember that, the Arbitral Tribunal is not a quasi judicial authority and therefore enforcement of an award against a third party or directing any organ of government or an administrative body is not within the ambit and powers of the Arbitral Tribunal. A ‘Right in Rem’ cannot be adjudicated by a forum other than organ of the judiciary or administrative wing for it is a right against the entire world and must therefore carry necessary sanction of a sovereign authority. Further, arbitration as a procedure, allows the Tribunal to bypass some of the cornerstones of civil procedure such as the Evidence Act, which if not properly and carefully examined may lead to miscarriage of justice in the zeal of reducing the time taken and procedure for dispensing justice and may further lead to more litigations. Thus while ease of doing business is of utmost importance keeping in line with the strategic placement of India in the global market, however due consideration must also be given to set proper safeguards for preventing miscarriage of justice.

 

How effective do you think the Benami Act has been?

(The Benami Transactions (Prohibition) Amendment Act, 2016 has come into force since 1 November 2016. The Amendment Act is intended to be a solution to curb a parallel economy and black money.)

Generally, people who hoarded large amounts of undisclosed and unaccounted money without proper record of trail of the source of such monies, park such monies by way of investments in benami properties, which are mostly cash driven. Such transactions became rampant and a complex web of deceiving the ex-chequer and revenue and land authorities as a way of controlling property markets and circulating monies lead to an increase in the parallel economy. Therefore a need was felt to amend the Benami Transactions (Prohibition) Act, 1988 bringing in the following: (i) widening the definition of ‘Benami Transactions’; (ii) establishing adjudicating authorities; (iii) setting up an Appellate Tribunal to deal with Benami transactions; and (iv) quantifying the penalty for entering into Benami transactions. Therefore, the amendment includes within its scope a transaction in which a property is held by or transferred to one person, but the consideration has been paid or provided by another person. It also includes property transactions where (i) transactions are done under a fictitious name; or (ii) the owner is not aware or denies knowledge of such ownership; or (iii) the person who provides consideration for purchase of the property is untraceable. The penalty for violation of the provisions under the Benami Transactions (Prohibition) Act, 1988 was between one (1) to three (3) years; however after the amendment to the Benami Transactions Act coming into effect, the penalty for violation have been made more stringent with imprisonment for upto seven (7) years and a fine, which may extend to twenty five percent (25%) of the fair market value of the subject property. Thus, these stringent measures will definitely serve as a deterrent to curb benami transactions and facilitate fair, open and regulated transactions in property and eliminate the parking of unaccounted and black monies in the real estate sector.

 

What is your comment about the existing SEZ policy of the Government?

(The ‘Special Economic Zones’ (SEZs) are vital for realising the Government of India’s “Make in India” agenda. However, SEZs have been opposed by many in India leading to governments such as the Government of Goa to scrap them altogether.)

Special Economic Zones (“SEZ“) primarily exist to overcome the shortcomings experienced on account of multiplicity of controls and clearances required for setting up and operations of business and commerce. On the one hand, checks and balances are required for safeguarding interests of all stakeholders and ensuring fairness, equity and non biased governance, on the other hand, excessive licensing, permissions and clearances lead to delays, unscrupulous acts and dissuade or impede balanced development. Make in India initiative is, as I understand, an endeavour to represent to the world that we are ready, able and capable of providing world class facilities for manufacturing goods and services and therefore invite foreign partnerships and investments. Although SEZ, is perfectly aligned with the Make in India initiative, eliminating major checks and balances under clearance requirements can result in concentration of resources and imbalances in revenue and economic opportunities as also erosion of the environment for greed and creed of the unscrupulous, as was clearly the case in the allocation of large pieces and parcels of land for SEZ purposes which ultimately lead to judicial intervention and maintaining status quo in respect of the Goa SEZ lands. Thus, the noble intentions of a progressive and growth driven government must be commended and encouraged, however, primary checks and balances of governance and concerns of citizens as well as preservation of the environment must be safeguarded to progress in a wholesome and balanced way.

 

How important do you think are writing skills in the development of a law student?

Communication and expression of thoughts and ideas are varied in any field such as art, drawing, poetry writing etc. Law, quite simply hinges on ones ability to understand facts and translate it into a proposition of law, so as to arrive at the best outcome. The beauty of law and its expression is that all interpretations for a relevant proposition can be suited. It is the facts, ideas, existing domain knowledge and perception of the author that, when assembled together is like flowing water, continuous, without lapse and with constant pressure and intrigues the readers/audience to keep them interested and informed. At an elementary level, agreements and documents including indentures, and court craft must be precise and concise so as to demonstrate your brief in a clear and transparent manner.

 

What will be your suggestion to our readers who wish to join corporate instead of independent practice?

Whether independent practice or corporate practice, every lawyer must be through in his work in terms of fact finding and interweaving facts with relevant laws. Every brief must be well organised and structured for easy reference and recollection of facts at any time by way of a structure including a short note right on top for a quick overview of the entire brief, followed by a proper sequence of dates and events and marking relevant words, paragraphs and pages of the papers. Every lawyer must know his brief and where to find relevant words, paragraphs through the papers when needed. It is important to know where to find the law rather than screening the entire law to find the relevant provisions. Curiosity, making brief notes, marking relevant portions of the papers and interweaving facts with the law are all important qualities every lawyer must cultivate.

 

What would be your parting advice to our readers?

And yet there is not a more fatal error to young lawyers than relying too much on speech-making. If any one, upon his rare powers of speaking, shall claim an exemption from the drudgery of the law, his case is a failure in advance. – Abraham Lincoln, notes for a lecture, Jul. 1, 1850.

Anyone who wants to understand law or practice law, must by nature develop a natural habit of self discovery, enquiry and detailed reading of facts and events before jumping to any conclusion and always find where the law is, so as to apply the relevant provisions to the facts of every case before jumping to half baked and impulsive decisions. We are all students of law, the more you read and the more you practice, the better you become. Always be open to learning and absorbing everything that comes your way.

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