Land Acquisition and Legal Due Diligence in India

Most land consultants and legal service providers in India have existing business ties with property brokers, developers, and registration attorneys, thereby creating structural conflicts of interest in the due diligence process. IMARC Engineering has no business ties with land sellers, property developers, registration agents, and legal service providers. Our due diligence process in land acquisitions is conducted independently and without any external influence, with every finding and assessment being conducted exclusively in the interests of the investor and the facts of the title, without any external commercial influences that are prevalent in the Indian property services industry.

The majority of the land due diligence exercises undertaken in India are restricted to the review of documents provided by the seller. This, by definition, is a limitation, as this approach fails to take into consideration any encumbrances, litigation, and regulatory restrictions that are not reflected in the documents provided by the seller. The methodology used by IMARC Engineering involves the independent verification of documents by searching primary sources like records maintained by the revenue authorities, Sub-Registrar records, court records, municipal records, records maintained by the Development Authorities, and digital records maintained by the DILRMP. This approach helps investors get a true picture of the property, as opposed to what the seller may have provided.

Acquiring a manufacturing site in India entails dealing with a complex and intricate array of regulatory requirements and regulations, including the Land Acquisition Regulation 2013, State Town Planning Legislation, Master Planning, Environmental Legislation, and sector-specific regulations for land use and development within various Industrial Development Authority structures such as MIDC, GIDC, KIADB, and APIIC. IMARC Engineering's team of regulatory experts has access to information regarding state zoning regulations and development authority regulations to assess information regarding Change of Land Use (CLU) and approval requirements based on current and applicable standards and not generalized information that may not account for state-specific nuances essential for a successful and viable manufacturing site.

Undisclosed litigations and unregistered encumbrances are two of the major risks in the context of Indian acquisitions of manufacturing sites, and these are not identified in the due diligence process if the search is restricted to registered documents. IMARC Engineering undertakes detailed search exercises through the District Courts, High Courts, and Supreme Court litigations, and in certain states, revenue court and tribunal litigations are also searched, as these are the jurisdictions for tenancy and land reform litigations. Verification of encumbrances also goes beyond the standard Encumbrance Certificate and includes the search for agricultural credit society encumbrances, SARFAESI proceedings, and execution petitions.

IMARC Engineering's land due diligence reports are specifically structured to meet the documentation requirements of major project finance lenders in India, including SIDBI, NABARD, scheduled commercial banks, and development finance institutions. Our reports provide lenders with the title opinion, encumbrance summary, litigation search certificate, zoning compliance assessment, and regulatory approval verification in the format and with the substantiation required to support project finance appraisal. This structured approach reduces the risk of lender queries and documentation iterations that delay project finance sanction, accelerating the transition from site acquisition to financial close.

Unlike other legal and consulting firms, who merely provide a due diligence report and then discontinue, IMARC Engineering offers a complete service from title defect remediation, procurement of regulatory approval, and finally, the completion of the acquisition. Where the due diligence process has identified curable defects of title, for example, incomplete mutation, lack of conversion orders from NA, or pending discharges of encumbrance, IMARC Engineering can assist in the remediation of the defects of title, including the structuring of the Sale Deed and other relevant documentation to safeguard the interests of the buyer, thereby reducing the gap between the completion of the due diligence and the acquisition to a minimum.