SEBI Amends Guidelines for Preferential Issue and Institutional Placement of Units by listed REIT/InvIT

On 28 September 2022, the Securities and Exchange Board of India (SEBI) issued guidelines for modifying the provisions pertaining to preferential issue and institutional placement of units by listed InvITs/ REITs which were previously notified vide Circular dated 27 November, 2019.

Key Takeaways:

The amendment to Clause 2.2 provides that units of the same class, proposed to be allotted shall now be required to be listed for a period of 6 months.

As per the amended Clause 4.2, the unsubscribed portion of the units can be made to the sponsor in the institutional placement subject to the following conditions:

  1. Atleast 90% of the issue size has been subscribed.
  2. The object of the issue should be acquisition of assets from that sponsor.
  3. The allotted units should be locked in for a period of three years from the date of trading approval granted for the units. (As per Clause 3 Annexure I of Circulars dated 27-11-2019).
  4. Approval of unitholders should be taken before the allotting the unsubscribed portion of the units to sponsors.


GST Relief for the Real Estate

In Munjaal Manishbhai Bhatt vs. UOI, the Appellant had entered into an agreement for the purchase of land from a developer and the construction of a building on the same land. Separate consideration was agreed upon for both the elements of the transaction. The Appellant filed a writ application before the Gujarat High Court on the grounds that Paragraph 2 of Notification No.11/2017 – Central Tax dated 28th June 2017 was ultra vires the provisions of the Goods and Services Tax Act, 2017. Paragraph 2 of Notification No.11/2017 states that the value of supply, in case of transfer of property in land or an undivided share in the land, would be the total amount charged for such supply reduced by the value of the land. The value of land is deemed to be one-third of the total amount of supply. 
The Appellant contended that the deeming provision of the value of land to be calculated as one-third of the total amount of supply was ultra vires the statutory provisions of the law when the actual value of land was ascertainable. The High Court held that the application of such a mandatory uniform rate of deduction was discriminatory, arbitrary, and violative of Article 14 of the Constitution of India which stated that all of the rights and freedoms set out in the Act must be protected and applied without discrimination.  Where the value of land was clearly ascertainable or where the value of construction can be derived with the prescribed valuation rules, such deduction can be permitted at the option of a taxable person. The High Court held that the deeming fiction prescribed under the said notification was ultra vires and not mandatory.


Let’s assume that the value of land is Rs.5,00,000/- and after construction, the apartment constructed on top of the land is Rs.10,00,000/-. Applying the provisions of Notification No.11/2017, the value of supply for the transfer of the apartment would be Rs.6,66,667/- (Rs.10,00,000 – 1/3rd of 10,00,00).
However, if the said notification was not applied and the value of land which was ascertainable was used for the calculation of the value of supply then the value of supply would be Rs. 5,00,000 /-(Rs.10,00,000 – Rs.5,00,000).
The aforesaid judgement by the High Court has held that deeming fiction of reducing 1/3rd of the value of land was unnecessary and arbitrary. The High Court held that “when the value of land was ascertainable then the same could be used for calculating the value of supply.


Sushant Shetty- One of ALB India’s Rising Stars of 2022

Sushant Shetty, our Practice Head, Real Estate & Infrastructure, Fox Mandal, Mumbai & Pune has been featured by Asian Legal Business as one of ALB India’s Rising Stars of 2022.

The List comprises of young lawyers in the Indian legal industry, who have set high professional standards and achieved goals at a very young age. Hence, the publication has spotlighted Indian lawyers under the age of 40 who have made an impact in the country’s legal scene. 


Indian Law Firm Awards, 2021-Real Estate

Fox Mandal has been recognized as an award winning law firm in the Indian Law Firm Awards, 2021 for Real Estate Practice by Indian Business Law Journal.

The Bangkok, Thailand-based conglomerate Mahaphant Group also engaged the firm for advice on the setup of its first manufacturing facility for environment-friendly fibre-cement products in Pune. On the policy front, Fox Mandal has provided recommendations on draft bye laws for the redevelopment of apartments in Karnataka and land reforms. Sundar Rajan, general counsel at Vaishnavi Developers, endorses Prashantha Kumar for leading a “highly mature, experienced and result-oriented team”. Nicholas Griffin, managing director at Principle Global MEAI & APAC, appreciates Shuva Mandal’s “humility and passion” and his “delightful way of getting from A to Z with minimal challenges”. He calls Malvika Bakshi “a true asset to the Fox Mandal team”.

Organization: India Business Law Journal (IBLJ)


Aruna Singh – Top Property Case Lawyer in Chennai – Three Best Rated

Our Group Head, Aruna Singh has been ranked as one of the three Best Property Case lawyers in Chennai ,Tamil Nadu by @threebestrated. The ranking is the result of a rigorous 50-Point Inspection, which includes customer reviews, history, complaints, ratings, satisfaction, trust, cost and their general excellence.

What TBR experts say?

Aruna Singh has been associated with fox Mandal since 2007. a senior associate in the real estate practice, Aruna has, in her 12 + years of experience, conducted due diligence on behalf of Indian developers and multinational companies for their commercial, residential and infrastructure projects. Fox Mandal is one of India’s oldest and most respected full-service law firms. With over ten full-fledged offices and various representative offices across India each practising all facets of law, Fox Mandal is regarded as a genuinely Indian law firm. They can advise a wide range of clients, including Fortune 500 companies, large and medium multinationals, Indian business groups, emerging companies, public sector organizations, government, and educational institutions.


Drafting of Deeds Like Agreements for Sale, Sale Deeds, Lease Deeds, Settlement Deeds, Partition Deeds, Will, Lease, Licence Agreement, Assistance in The Registration Process, Infrastructure Projects, Expression of Interest, Joint Venture Development, Title Investigation & Verification of Original Documen