UPSC CSE Current Affairs — 24 September 2026

Real Estate Investment Trusts (REITs) allow retail investors to own units in income-generating commercial properties — offices, malls, warehouses — without buying physical real estate. SEBI regulates REITs in India under its 2014 REIT Regulations. Currently four listed REITs operate in India: Embassy, Mindspace, Brookfield, and Nexus Select Trust. REITs must distribute at least 90 percent of net distributable cash flows to unit-holders, making them a dividend-like instrument accessible through stock exchanges at relatively low ticket sizes.

A REIT is a trust that pools investor money to own, operate, or finance income-producing real estate. The concept originated in the United States in 1960 and reached India when SEBI notified the REIT Regulations in 2014, with the first Indian REIT — Embassy Office Parks — listing on NSE and BSE in April 2019.

Structurally, a REIT has three tiers: the Sponsor (who sets it up), the Manager (who makes investment decisions), and the Trustee (who holds assets on behalf of unit-holders). At least 80 percent of the REIT's assets must be in completed, revenue-generating properties; up to 20 percent can be in under-construction assets, listed securities, or other permissible instruments.

The mandatory 90 percent distribution rule makes REITs attractive for income-seeking investors, similar to how mutual funds distribute dividends. Units are listed and traded on stock exchanges, providing liquidity unlike direct property ownership. SEBI has progressively reduced the minimum investment threshold — originally ₹2 lakh, then ₹50,000, and now as low as ₹10,000-₹15,000 per lot for some REITs — democratising access.

For exam purposes, the key distinctions are: REITs vs InvITs (Infrastructure Investment Trusts — same structure but for infrastructure assets like roads and pipelines), SEBI as the sole regulator, the 90 percent distribution mandate, and the asset composition rules. REITs generate returns through rental income distributions and capital appreciation of units.

The Delhi High Court upheld an arbitral award ordering Steel Authority of India Limited (SAIL) to pay demurrage — a penalty for ships delayed beyond the agreed loading period. SAIL invoked force majeure, arguing COVID-19 lockdowns prevented cargo operations. The court rejected this, finding the government had specifically designated cargo loading and unloading as essential services during the pandemic. Because operations were not legally prevented, the contractual excuse of force majeure did not apply.

Demurrage is a contractual penalty paid by a charterer (here, SAIL) when a ship is detained at port beyond the agreed free time for loading or unloading. It compensates the shipowner for the delay. Force majeure is a contractual doctrine — codified in spirit under Section 56 of the Indian Contract Act, 1872 (doctrine of frustration) and expressly in commercial contracts as a clause — that excuses a party from performance when an extraordinary event beyond their control makes performance impossible or illegal.

The critical distinction the Delhi High Court drew is between impossibility and inconvenience. Force majeure (and Section 56 frustration) requires that performance become impossible or illegal — not merely more difficult or commercially inconvenient. Since the Government of India's lockdown orders under the Disaster Management Act, 2005 expressly kept port and cargo operations in the 'essential services' category, SAIL could not claim legal prevention of performance.

This reflects the classical rule: a self-induced impossibility, or one that the law itself carves out an exception to, cannot ground a force majeure plea. The court's reasoning also reinforces the principle that arbitral awards on mixed questions of fact and law receive deference under Section 34 of the Arbitration and Conciliation Act, 1996 — courts will not re-examine factual findings unless they violate public policy. For CLAT PG aspirants, this case sits at the intersection of frustration of contract, force majeure clauses, and the limits of judicial interference in arbitration.