DRAFT FOR DISCUSSION

DRAFTED BY
SRIDHARA BABU N
LEGAL DOCUMENTATIONS

9880339764

MODEL MOU FOR DEVELOPMENT

ARTICLES OF MOU for DEVELOPMENT made at Bangalore this _____ day of __________,
20__ between Mr .............................................................. Chairman/Director/MD/authorised
representative of the Company Registered under Companies Act having its registered office
at ................................................... .................... hereinafter called "the prospective Owners" in
short TPO’s (which expression shall unless it be repugnant to the context or meaning thereof, be
deemed to include their successors in office and interest, executors, assigns, and administrators)
of the One Part.

and
Mr ................................................. S/O ......................................................
aged ...................................................... Resident of ................................................................ having
partnership in the firm M/S .................................................................... and authorised as duly
representing partner of the firm engaged in the business of Real estate and Development of
Lands in and around Karnataka having its office
at .......................................................................................................................................................... .....
.......... hereinafter called "the Developer" (which expression shall, unless it be repugnant to the
context or meaning thereon be deemed to include his heirs, partners, executors, administrators
and assigns) of the Other Part:

Both “TPO’s” and “the developer” are collectively called as “the parties” in this MOU.

Whereas the TPO’s are absolutely making efforts with active facilitation of the developers to buy
the said property from prospective sellers the properties as described in annexure I to this MOU,
the prospective sellers has proposed to the parties herein to sell their interest in the said
properties after getting conversion of the nature of use of the lands, the developer herein has
concurred his interest in facilitating the land purchase by he TPO’s after getting all the legal
formalities done ate the expenditure of ....................... The supervision of legal verification of title
to the said properties in each cases/ sale agreements/sale deeds/ GPA’s/ possession delivery
letters/ liasoning with appropriate authorities for getting necessary approvals/ development of
such lands/ etc are the undertaken works of the developers at the cost and expenditure
of ....................................... later through the letters from prospective sellers, TPO’s seizing and
possessing of or otherwise well and sufficiently entitled to all those pieces or parcels of lands or
grounds situated lying and being at ....................... Grama ...........................
Hobli .................................. Taluk .................................... District in the registration District and
sub-District of ............................. City and ............................ Suburban admeasuring total
proposed land purchase, measuring about................. Acres ................Guntas including Kharab
Land or thereabouts and more particularly described in the annexure I to this MOU (hereinafter
for the sake of brevity referred to as "the said property");

Andwhereas the said property is vacant agricultural land and except a portion thereof which is
presently having ........................................... & ...................................... which fact the parties are
aware, both having inspected the said property prior to the execution of these presents; the said
property comes under ................................................ zoning pattern under the existing zonal
regulations governing the said area. The said property is likely to be converted into residential
layout after obtaining necessary clearance from Deputy Commissioner of the District and
planning authority. The parties are well acquainted with the above facts have assented to these
presents;

And whereas for better management, control, administration, planning, development,

liasioning with appropriate authorities, zoning, subdivision, and site plan permitting,
engineering, grading, dedications, infrastructure installation, and for engaging necessary
consultancy services for the proposed land purchase and development into residential layout;
parties has reached this MOU for the smooth completion of the development project;

And whereas The TPO’s have agreed to grant to the Developer and the Developer has agreed to
accept from the TPO’s exclusive rights of development of the said property upon the terms and
subject to the conditions herein recorded.
NOW IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO as follows:

1. The TPO’s has this day paid to the developers a sum of Rs...............................

(Rupees...........................................................) only as and by way of earnest money for executing

sale agreements, verification of title, conversion formalities initiation and other initial works for
the purchase of the said property from prospective sellers;

2. The developer shall facilitate to complete the legal formalities of the said
property for getting Sale deed registration of the said property in the name of TPO’s

3. The TPO’s hereby grant exclusive right to the Developers of development of the
said property as and when the possession is obtained by them, by necessaryly communicating the
aspect by a suitable letter with authorisation , after completion of the sale transactions a suitable
GPA will be provided to the developer for the suitable execution of development of land which
was obtained as "as is where is basis" and the Developer accepts the same for the consideration
and subject to the terms and conditions herein provided.

4. It is specifically agreed that the necessary GPA will be given to the Developers,
to submit plans for sanctioning of lay out for construction of buildings and/or other structures
on the said property or any part or portion thereof, with necessary guidance and approval of the
TPO’s.

5. The said plans shall be prepared by the Architects of the Developer and at the
costs of the ............................... and the plans as are prepared by the Developer through their
Architects with cocurrence of TPO’s and copy of the finally approved plan shall be given to the
TPO’s

6. Soon after the execution of this MOU, if so required, the TPO’s shall execute a
Power of Attorney in favour of the Developer or any other person nominated by the Developer to
approach all public authorities and to submit and obtain sanction of plans of lay-out and the
buildings and structure/s to be constructed on the said property or any portion thereof from the
Municipal Corporation of ............................... and all other concerned authorities.

7. The Parties are aware that certain portions of the said property are
under .................................................... under zoning regulations, It is agreed that the parties shall
under no circumstances be liable to remove the said reservations nor shall the TPO’s be entitled
to any reduction in the consideration payable hereunder on account of the said reservations.
However, the TPO’s shall sign all applications, papers, writings, etc. as may be required by the
Developer the purpose of removing such reservations.

8. In consideration for the work of facilitation of the land purchase and other
incidental liasioning, verifications and documentations provided by the developer a minimum
consideration of Rs. ........................- (Rupees .......................................................... only) for one acre
of sale of the said property (hereinafter called "the minimum consideration for sale” or
“MCS")In consideration of the work of development to be carried out by the Developer under
this Agreement, the Developer shall be paid by TPO’s a minimum consideration of
Rs. ........................- (Rupees .......................................................... only) for one acre of development
of the said property (hereinafter called "the minimum consideration for development" or
“MCD”) or an amount calculated at the rate of Rs........................ per square foot of the total area
of the said property; whichever is higher and the said total consideration amount shall be paid in
the manner following:

(1) Rs. ____________/- (Rupees ______________________ ____________ only) on the

execution hereof being the earnest money or deposit (receipt of which sum the developers
do hereby admit and acknowledge).

(2) Rs. ____________/- (Rupees _____________________ _____________ only) being the

balance consideration (MCD)which shall be paid by the TPO’s in proportional
instalments as and when progress of development continues;
.
9. The considerations and balance considerations over the sale agreements(MCS)
will have to be paid through crossed cheque to prospective sellers by the developers out of the
earnest money and subsequent advances made by the TPO’s to the developer, subject to
following conditions; The prospective sellers making out the marketable title to the said property
free from all encumbrances and reasonable doubts. The Appropriate Authority issuing its NOC
under Section 269 UL(3) of the Income-tax Act, 1961. The prospective sellers handing over
complete vacant possession of the said property to the Developers under an irrevocable license.
The TPO’s shall hand over formal possession of the property to the Developer on execution of
the Conveyance

10. Notwithstanding anything contained in the preceding clause it is specifically

agreed by and between the parties hereto that after execution hereof the Developer shall be
entitled to put up fencing around the said property or any portion or portions thereof, for the
purposes of preventing any encroachments but subject to the existing ......................................, and
shall also be entitled to put up fencing around the portions of the property
in ............................................................ as hereinabove provided. The Developer shall also make
arrangements for guarding the said property and preventing any further encumbrance or
encroachment by trespassers or unauthorised persons upon the said property or any part or
portions thereof. All costs, charges and expenses in respect of the above shall be borne and paid
by ............................ alone. The parties shall not be liable to remove and/or vacate the
encroachments or unauthorised occupants who are already occupying portions of the said
property nor shall they be liable in respect of any further encroachment or unauthorised
occupation on the said property.

11. As from the date hereof, the Developer shall be solely entitled at his own risk to
deal and/or negotiate with the unauthorised occupants and/or trespassers on the said property
and to take any proceedings against them and/or to arrive at any arrangement or agreement with
them at the costs, charges and expenses of the Developer alone. However, the TPO’s/prospective
sellers shall empower and authorise the Developer and/or his nominees under the Power of
Attorney to be executed as aforesaid to effectively deal and/or negotiate with the trespassers or
unauthorised occupants and to receive the possession of the respective area occupied by such
trespassers or unauthorised occupants subject to the consideration having been fixed by the
parties for the said property as mentioned hereinabove. The Developer shall also be entitled to
hand over, on behalf of the Owners, any area of the said property, which falls under reservation
and/or set-back and/or requisition or acquisition to the relevant authorities in the event the same
becomes necessary on receiving proper notice from the authorities and for that purpose, the
Owners shall grant suitable powers and authorities in the said Power of Attorney to be granted
to the Developer and/or his nominee.

12. The conversion fine and other incidental expenses for the said land coversion are
the sole responsibility of ...................................................... The stamp duty and registration
expenses over the sale agreements and sale deeds are the sole responsibility
of ................................................................... The lands as marked as said property in annexure-I is
mutually priced at Maximum Rs ................................. per acre ( Rupees.........................................
per acre). Upto the said maximum price limits, the lands shall be acquired by the developer from
the prospective sellers, The TPO’s is bound to get registered such lands at the maximum price
even if there is any agreement to the contrary price entered by the developer and prospective
sellers. The betterment fees, land revenue, and other incidental expenditure are at the sole
responsibility of TPO’s.

13. All the legal obstacles and consequences in execution of the development and
acquiring of lands has to be cleared by the developer at the cost and expenditure
of.............................................. as soon as possible to complete the project.

14. TPO’s authorize the developers to initiate or withdraw or compromise/ any

proceedings/ complaint/ application/ and other correspondence on behalf of them for the
successful completion of the project.

15. The provision of electrification, drinking water source, water supply, drainage
for rainwater, drainage for households/underground drainage, effluent treatment plant/ parks
development, playgrounds, plantation of tress, Road asphalting, footpaths constructions, cul-dec
provisions, road intersections development, compound wall, construction of entrance and exit
gates, rain water harvesting, and ground water recharging, waste collection spaces, numbering
of sites and roads with suitable boards,and other development works as may be mutually agreed
upon is included under the development works.

16. Layout map approved by the authority shall not be deviated by the developer in
developing the layout. The map shall be permanently displayed at the entrance of the layout.
Hiring of security and temporary construction of gowdown/office/sheds and Insurance coverages
in respect to various risks are at the sole discretion of the developer. All the temporary erections
if not needed by the TPO’s shall be cleared by the developer without seeking any compensation.

17. After the completion of the development work to the satisfaction of the local
planning authority, and claiming all the pending bills peacefull possession shall be given by the
developer to TPO’s along with possession letter and possession certificate from the local
authority.

18. In the course of development works, after the completion of each stage of
development, the developer may raise bills and TPO’s shall release such bills after satisfying
through their engineers. The developer is authoised to engage standard professionals in aid and
execution of the development. The developer shall provide legal opinion over the title of each
properties from the proffessional Advocate with indepth analysis of title and certification of title.

19. The TPO’s or their authorized representative or agent is entitled to enter and
examine the said property at all reasonable times and may serve notice on second party any
deficiency in the execution of development works.

TPO’S DECLARE THAT:

1. The TPO’s are the proposed owners of the said property described in the annexure-I
hereunder written which is also shown on the plan hereto annexed and marked "A" is being
under the process of sale with due considerations and thereon shown surrounded by a red
coloured boundary line and that the said property is vacant save and except the portions
thereof, which are at present occupied and/or encroached upon by the unauthorised
occupants and portions whereof are under reservations as aforesaid.

2. Until the sale deed execution after fulfilling formalities, the prospective sellers have
good right, full power and absolute authority to grant exclusive possessory rights to develop
the said property described in the Annexure-I hereunder by a written authorization to the
Developer and the Developer shall be entitled to develop the said property subject to the
terms and conditions herein contained.

3. They have not created prior to the date hereof nor shall they create hereafter during the
pendency of the Agreement any right or encumbrance or agreement of any nature
whatsoever in respect of the said property or any part thereof.

MUTUAL RESPONSIBILITIES
1. Simultaneously with the execution hereof, the PARTIES shall deposit all the title deeds
relating to the said property described in the annexure-I hereunder written with the
Advocate ............................................................... until the completion of the transaction herein.
The said Advocate shall after examining the title and documenting the deeds with suitable
opinion, send opinion and accountable receipt of all the title deeds to the said TPO’s and retain
originals until both the parties settle their mutual rights and liabilities over the MOU. On the
completion of the transaction herein the developers through the said Advocate hand over to the
TPO’s all the said title deeds against an ordinary receipt.

2. Upon the Competent Authority granting the requisite permission and/or sanction for
the development of the said property and on sanction of the plans by the Municipal Corporation
of ............................... and all other concerned authorities as aforesaid the Developers shall after
obtaining possession be entitled to commence construction on the said property, for which license
to enter upon would be given by the prospective sellers or TPO’s to the Developer pursuant to
this Agreement by a separate letter. The development to be carried out by the Developer shall be
in accordance with the permissions granted by the Competent Authority under the relevant
provisions of the different regulations, circulars and Acts and shall also be in accordance with the
sanctioned plans. The Developer shall also be entitled in his own right to enter into agreements
on what is popularly called sub contracts or otherwise and/or arrangements with any person or
persons of their choice for the purpose of any works to be carried by the Developer on the said
property or any portions thereof in accordance with the terms and conditions laid down by the
Competent Authority and in the sanctioned plans and to receive and appropriate the
consideration payable in respect thereof and/or any part thereof for their own benefit and use.
Such agreements and/or arrangements shall be entered into by the Developer in his own name
and at his own costs and risk and no risk or liability of any kind shall be incurred by the TPO’s
in any manner.

3. After the receipt of the full consideration by the prospective sellers from the
Developers, the developers shall facilitate to persuade prospective sellers to execute one or more
Deeds of Conveyance as may be desired by the TPO’s but at the costs and expenses in all respects
being borne and paid by the TPO’s including stamp duty and registration charges, in respect of
the said property or portions thereof, as the case may be;

4. On receipt of the full consideration amount by the prospective sellers, if for any reason
the Developers fail to obtain the Conveyance of the said property, then the TPO’s shall, at the
request of the Developers, execute a Power of Attorney in favour of the Developer and/or his
nominees or nominee or representatives empowering and authorising the said Attorneys, inter
alia, to file a suit for specific performance, until settling of dispute, No further consideration shall
be paid by the Developer to the prospective seller until execution of such Deed or Deeds of
Conveyance.

5. Prior to the execution of one or more Deeds of Conveyance in respect of the said
property or any portions thereof in the manner mentioned herein, the prospective sellers shall
produce the requisite Certificate under the provisions of Section 230A of the Income-tax 1961 for
effectively vesting the said property in favour of the TPO’s or in favour of the person or persons
nominated by the TPO’s. It is further agreed that in the event the said Deed or Deeds of
Conveyance or any of them are not executed at the time of payment of the balance consideration
amount an amount representing 20% of the total consideration amount shall be retained by the
developers Advocates until the production of the said Certificate/s under the provisions of
Section 230A of the Income-tax Act.
6. The prospective seller shall pay and discharge all assessments, outgoings, taxes, etc.
payable in respect of the said property upto the date the possession of the said property is handed
over by them to the Developer. Thereafter, the same shall be paid and borne by the TPO’s alone.
The TPO’s shall pay and discharge all outgoings, assessments, taxes, etc. for the entire property
after possession of the same whether whole or in part is handed over to the Developer.

7. The prospective seller shall declare that no notice of acquisition or requisition issued
by the Municipal authorities or under the Epidemic Diseases Act or any other statute has been
served upon them or anyone on their behalf. If however, any notice or requisition of the
Municipal authorities or other public body is issued in respect of the said property after the date
of execution of these presents but before the completion of the transaction the TPO’s/ prospective
sellers until sale deed execution, shall comply with the same at their costs and expenses.

8. The prospective sellers shall declare that at present no notice or requisition has been
served by the Government of Karnataka or Municipal authorities or highway authorities or
planning authorities for requisition or acquisition or set-back in respect of the said property or
any part thereof and that so far as they are aware no such requisition or acquisition or set-back
is contemplated. Provided always that care shall be taken by the developers in verification of
whether the prospective owners have concealed any such notice issued, inter alia, under any of
the Acts as aforesaid, the Developer shall reserve his right to cancel the sale Agreements and on
such cancellation to receive forthwith the earnest money and all other payments made, if any.

9. All disputes and differences that may arise between the parties hereto relating to or in
connection with the matter of this MOU or between the parties or their representatives shall be
referred to the sole and final arbitration of Mr. _______________ or failing him Mr.
____________ as the sole Arbitrator whose decision shall be binding on both the parties. The
Arbitrator shall have summary powers.

10. All out-of-pocket expenses of and incidental to this agreement including the expenses
for Deed/s of Conveyance and other documents and writings including stamp duty and
registration charges shall be borne and paid by the TPO’s alone. The parties shall bear and pay
their respective Advocates' professional costs.

11. The Developer shall be entitled to develop the said property either by himself and/or
through his nominees including a firm, wherein he is a partner or a company wherein he is a
Director, provided however, all the obligations and liabilities undertaken by the Parties under
this Agreement shall remain in full force and be binding upon the parties, and in particular
their liability for payment of all amounts under this MOU.

12. The PARTIES hereby declare that they have not entered into with any person or
persons Agreement to Sale or Lease or created any third party rights in favour of any person or
persons in respect of the said property.
In Witness whereof the parties hereto have hereunto set and subscribed their respective hands
the day and the year first hereinabove written.
TPO’s
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Name:…………………………………….LTM SIGNATURE
THE DEVELOPER
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Name:…………………………………….LTM SIGNATURE
Witnesses
1. Name……………………………..

S/O……………………………….
Adress……………………………
……………………………………
…………………………………….
2. Name……………………………..

S/O……………………………….
Adress……………………………
……………………………………
…………………………………….