Our client, a midsize company seeking to expand its operations, identified a strategically located industrial property within the limits of Pune, Maharashtra. To facilitate a seamless acquisition, they engaged our services to perform comprehensive due diligence, addressing potential legal and logistical challenges.
We initiated the process by collecting detailed information from the client regarding the property, including its exact location, zoning classification, and the identities of all parties involved in the transaction. Upon receipt of the relevant documentation, we meticulously cross-referenced these with the executed Term Sheet/Memorandum of Understanding (MOU) to ensure alignment on all terms and conditions.
We reviewed and refined the Term Sheet between the client (buyer) and the seller, incorporating necessary revisions to protect our client’s interests. A thorough legal due diligence process was undertaken, which included sub-registrar searches and online litigation reports to verify the property’s legal standing and historical context.
Subsequently, we prepared a public notice and obtained a no objection certificate (NOC) from the sellers, confirming their consent for publication as mandated by law. After a comprehensive review and analysis, we delivered a Due Diligence Report and Title Search Report to the client, highlighting potential risks and offering recommendations concerning the property.
We also secured pertinent tax documentation from the sellers to ensure compliance with applicable tax regulations. Following this, we meticulously reviewed the conveyance deed to protect our client’s interests & ensure its alignment with the agreed terms between the parties.
If India appears as an attractive market, it is also a market influenced by local specificities, unique market trends, and strict regulations.
For these reasons, any business must receive step-by-step guidance to minimize risks related to their international expansion and successfully enter this exciting market.
Issue: To assess the legality of the title and investigate any ongoing disputes related to the land parcel with multiple owners.
Solution: Conducted a title search for the preceding 30 years and obtained an encumbrance certificate to confirm the absence of legal claims. In cases of identified disputes, negotiations with current owners were initiated to resolve them prior to acquisition. An online litigation search was undertaken, and the findings stated that there are no relevant cases in relation to the subject property on the Sellers.
Solution: UJA advised to update the Zonal certificate and obtain the documents from Sellers with reference to Pune Metropolitan Region Development Authority (PMRDA) to verify the current zoning status and to seek approval from PMRDA for sanctioned and revised layout plan. If the land was not zoned for commercial use, we explored options for rezoning or alternative uses compliant with existing regulations.
Issue: The proposed land for acquisition was part of a larger parcel, necessitating certification and demarcation through a physical survey and technical diligence to ensure its suitability for the intended use. No demarcation plan or subdivision order from the competent authority was provided.
Issue: There were adjoining plots. Existing easement rights for a pathway intersecting the land could hinder the buyer’s intended activities. Our concern was the business activities undertaken by one Plot should not hamper the right of the Buyer to peacefully undertake its business and to possess the land.
Solutions Offered:
The thorough due diligence process empowered our client to confidently proceed with the acquisition, effectively mitigating risks associated with the property. Our rigorous checks confirmed the absence of outstanding legal issues, and the client expressed satisfaction with the comprehensive support provided throughout the transaction.
UJA recommends incorporating an indemnity clause to address various observations noted during due diligence. The vendors agreed to indemnify and hold the purchaser harmless from any claims, penalties, or liabilities arising from defects in title or non-compliance issues related to the land.
This case study highlights the critical importance of meticulous due diligence in real estate transactions, particularly in a dynamic market like Pune, ensuring that all legal, environmental, and regulatory concerns are addressed effectively.