CASE STUDY - 1 Lifestyle Real Estate and Developers Limited (hereinafter called as "LRED") is a renowned company engaged in the real estate business of which all of its projects are registered under the Real Estate (Regulation and Development) Act, 2016 (hereinafter called as "RERA"). In pursuit of its objectives, it undertakes acquiring, developing and selling of plots construction and development of residential and commercial complexes. Several projects are in progress scattered all over the country. Project - "Luxury Homes" and Purchase of Land LRED's project styled as "Luxury Homes" was launched on the outskirts of Pune in the year July, 2021 which was scheduled to be completed and possession to be handed over by the end of June, 2024. Besides Luxury Homes, LRED has also purchased an open land in the urbanisable area near Nagpur and developed the land into plots and sold to the customers during the period from July 2021 till 30.09.2023. Rohit and his Business Transactions Mr. Rohit, a Promoter Director of LRED, is a civil engineer and has wide experience in the relevant field. He has adopted a practice to collect 50% sale price of the plots by cash (which is kept outside the tax bracket) and the balance amount through banking channels. Disposing of the huge cash money so collected, he purchased as an investment, for future exigency in his business, a diamond necklace and other jewellery in the name of his wife and one bungalow jointly in his name and in the name of his younger brother. His legal advisor brought to his notice that these transactions are violative of the Prohibition of Benami Property Transactions Act, 1988 (PBPTA). Mr. Rohit wanted to know as to who will be regarded as 'Benamidar', 'Beneficial Owner' and which property will be considered as a 'Benami Property' under these transactions. Rajesh and his Investments Mr. Rajesh, a Non-Resident Indian (NRI), who shifted to USA 10 years ago, is a best friend of Mr. Rohit. He is a reputed businessman in USA and a rich person. He has huge surplus funds which he intends to invest in India by purchasing agricultural land and some plots in the scheme/ projects of Mr. Rohit. He booked 20 apartments in "Luxury Homes" project of which 5 apartments were booked in his own name, five, one each, in the name of his wife, 2 minor daughters and 2 major sons respectively for their welfare and use and other 10 apartments in the name of his associate companies, firms and other entities for their business use. Mr. Rajesh does not intend to claim any beneficial interest, present or future, on these flats booked for such business entities who were aware of this transaction and have not denied to it. Mr. Chandan, an advocate of Mr. Rajesh, advised him that he can go ahead with this proposed investment as it is a permissible transaction under the Foreign Exchange Management Act, 1999 (FEMA). Show Cause Notice to Mr. Rajesh The Competent Authority under the Prohibition of Benami Property Transactions Act, 1988 (PBPTA) taking cognizance of booking of the flats by Mr. Rajesh in the name of his associate companies, firm and other entities issued a show-cause notice to him as to why the flats so booked should not be declared as benami property and confiscated. Having received the notice, Mr. Rajesh is contemplating to re-transfer the flats in his name, if the contention of the notice is valid. Mr. Rohit's Actions Mr. Rohit siphoned huge money collected under "Luxury Homes" project to his various group entities affecting the pace of construction work, causing inordinate delay in its completion. The allottees of the project started building pressure on him to ensure completion of scheme on time. Anticipating that the completion of project and handing over possession of the flats as per the time schedule will not be possible, he started searching other developers whom he can transfer the project and get rid of this problem. As a result, he signed an agreement with Sweet Homes Developers (LLP) assigning the "Luxury Homes" project. To this arrangement, he obtained the approval of 67 allottees composed of Mr. Rajesh, his 10 associates entities and other 56 home buyers who have booked one flat each and thereafter submitted an Information Memorandum of the agreement executed with the approval of allottees obtained to the RERA Authorities. Advice to Initiate Corporate Insolvency Resolution Process Out of total 100 allottees of the project, 10 allottees (not being Mr. Rajesh, his family members or other associates) decided to withdraw from the project demanding the refund of money deposited by them to LRED which was turned down by it. Aggrieved by the decision of the promoter, these 10 allottees approached a practicing Chartered Accountant (CA) in Pune to find out any alternative remedy available to them under the circumstances. The CA advised them to jointly file an application before the NCL T to initiate 'Corporate Insolvency Resolution Process' against LRED. The other remedy is to move with the competent consumer forum constituted under the Consumer Protection Act, 1986 seeking relief. Mr. Ashok and his Actions Sweet Homes Developers (LLP) [hereinafter called as "the LLP"] admitted Mr. Ashok, who is resident but not permanently resident in India and a citizen of Canada, as the Managing Partner in LLP on attractive remuneration of ₹ 1,20,00,000 per annum after deduction of taxes for a short period of 36 months considering his expertise and educational qualification in the stream of business management. (Ignore other deductions). After a year of his admission, the LLP sent him to Canada for 6 month's higher studies in well-known Institute for the benefit of the LLP and the LLP is to incur the education expenses. On submission of requisite documents for remittance of USD 250,000. to the Institute towards education expenses, the Authorised Dealer (AD) refused to transfer the amount without the prior approval of the Reserve Bank of India (RBI). On termination of his tenure, Mr. Ashok wished to remit 60% of his net salary earnings to his bank account abroad plus USD 10,000 earned from other income to his father's bank account as a gift to him. [Assume Exchange Rate as INR 84 per USD on the date of transaction]. Mr. Ashok wants to know whether he is entitled to make such remittances without the approval of RBI. On the basis of the above inputs, you are requested to answer the following questions as enumerated in Part A and Part B respectively. PART - A