Siddhartha Ray 11 February 2017

Breach of lease deed contract

I am a resident of Kolkata who aquired a two storyed guest house in Dharmshala. I wanted to make the existing rooms modern while adding two more floors- one for my own residence and the other for a restaurant. My landlord has already submitted a floor plan for approval of additional floors and this past October 2016 I signed a resgistered lease deed with my landlord that in consideration of the funding provided to construct the additional floors/portions and rent reserved he transfers by way of lease that complex and existing facilitites what there are and what may be introduced by the passage of time for a term of forty years.

As per the conditions laid down the landlord's obligation is to construct additional /floors as per the proposed plan and specifications given by me and hand over possession of the said premises duly completed in all respect on or before 28 February 2017 allowing me to start the venture in the manner I may feel like. My obligation is to provide all funding required for the construction of additional floors as per actual authorization and specification either to my landlord or directly to the vendors, labour and personnel employed in context to the above, as and when required after pay him an agreed upon monthly rent for the entire premises.

Yet another condition was that the lease for the purposes of rent and period of lease shall be deemed to commence from 1 March 2017.

After, the construction process started, even progressed steadily while I provided the funding as per my obligation and everything was fine untill December 22nd when his mother appeared from nowhere and started demanding Rs 50 Lac from me claiming that even though the prorperty was in his son's name apparently she had invested in it and if I don't pay her then she will stop construction and kick me out. At first my landlord promised me not to worry but after succumbed to the pressure of his mother and larger family / relatives to abide be her or be ostracized from the family. When I refused they asked that I leave out two floors for them and reduce the lease hold term to 20 years while keeping my investment and rent the same. Again, I politely refused but offered to cancel the lease deed if they returned my investment which was upward of 15 lacs by that time. However, they refused to pay me upfront, said that they will pay me as and when they had the money but I must cancel the deed right away. Ofcourse I refused to oblige.

Then they stopped construction and after two more days they visited me with several of their freinds, relatives and neighbours to make me cancel the deed rightaway. I was so fearful that I called the police and thankfully they are not far and intervened the process and after I lodged a formal complain at the police station.

I had rented a room in the same guest house until March to oversee the construction. The next day his wife entered my room around afternoon and asked me to vacate despite having paid advance rent upto February 2017 or else threatened she would tear her clothes and accuse me. I had no option but to leave the property and find accomodation elsewhere.

They thought that would be the last the saw of me but I seeked legal help and my lawyer filed Suit under section 38 and 39 of Specific Relief Act for granting a Decree for permanent prohibotory injuction restraining the defendent, his relatives including family memebers, servants and agents from interfering into and from dispossessing me from the room with a prayer for mandatory injunction that in case I am disposed from suit property the same be restored to the plaintiff. The defendants counsel appeared in court on the 19th of January and asked for time to file a written reply i.e. on next hearing 8/3/2017.

Meanwhile his mother wrote to the Deputy Commisioner saying that his son is apparently stupid and alcoholic and that I took undue advantage of him and hence the lease deed should be cancelled. The D.C. ofcourse has done nothing but refer the letter to the sub divisional officer for enquiry.

Now when I ask my lawyer to file a suit for breach of contract rightaway he advises that we wait for March when I am suppose to get possession. He says that we must first see what their reply is...

Should I wait? Also I want to know that if any criminal proceedings such as fraud etc can be brought against him.

Would really appreciate if anyone can advise how I should further proceed in this matter.

Thanks in advance.

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6 Replies

Dr. Atul [9013898936] (Lawyer, Scholar) 11 February 2017

From what you have posted, you seem to be on a decent footing given the murky situation you have been placed into.

A lot of my views would be subject to exact terms of your Agreement since it does not appear to be a lease deed simpliciter but a composite Agreement of a short term tenancy pending renovation, long term lease after renovation, consideration towards long term lease and rent towards short term tenancy.

Now, since you have as a matter of fact vacated the premises (under threat or otherwise) where was the question of protecting actual possession under Suit for Injunction (Section 38 might have applied to prevenrt breach of an obligation and by actually forcing you out of possession by coercion, the breach has already occassioned to that extent of the contract which deals with limited tenancy rights)? A case for restoring possession (Section 6 Specific Relief Act) and/or damages for breach of that part of the contract that permitted possession to you in tenancy pending renovation would have been proper but not a Suit for Injunction.

Next, since the nature of possession would have changed from a limited occupancy tenancy to complete premises' lease commencing from 1 March 2017, the Suit seeking Injunction from dispossession would anyways be rendered infructuous from that date. To that extent, I can't even figure out the point of the other party seeking and the Court granting time for filing WS in injunction Suit. Your cause of action now is to file a Suit for Specific Performance with or without damages, not a suit fot Injunction.

All that crap about alcoholism, let the other side sing that song. They'd need to prove by evidence that the Contract was void by reason of incapacity AT THE TIME when it was executed and that ain't a joke.

March 2017 being around the corner just wait till this date that the lessor actually fails to perform his obligations under the Contract and file a composite suit for Specfic Performance (Section 10 of the Specific Relief Act) and compensation/damages (Section 21 Specific Relief Act read with Section 73 Contract Act).

Ms.Usha Kapoor (CEO) 12 February 2017

As expalined above wait till March to obtain possession and file a suit for specific performance with or without damages as you've always been willing to perform your side of the conract and its terms scruplously and to the brim. Your chances of sucess are good.

Siddhartha Ray 12 February 2017

Thank you !

Your suggestions are both helpful and reassuring. Today I found out that the Lessor is busy renovating the guest houses according to his own wishes so that he can commercially use it for himself. He is under the impression that even if I bring upon a suit, it will take years for any decision and until that time he can use the suit property in his favor without giving me posession.

Can I also file a suit for injunction so that the lessor cannot use the suit property for his personal or occupational reasons?

Ms.Usha Kapoor (CEO) 13 February 2017

Yes, You can.

Dr. Atul [9013898936] (Lawyer, Scholar) 13 February 2017

I seriously doubt any Court will interfere with an undisputed owners right to possess, enjoy and improve immovable property during the pendency of a Suit on a contested claim of lease, especially since denial of rights emanating from a lease deed are quite capable of being quantified in terms of money. Makes me wonder how the pleadings filed on your behalf describe the actual possession.

Be that as it may, I'm going on a presumption that the existing Suit filed by you is only to the extent of preventing dispossession. Though timelines are rather fine, you might consider filing a Suit right now under Sections 39 and 10 of the Act to prevent a breach of obligation of handing over vacant possession of entire premises to you in terms of the lease deed. Seek interim restraint order against the owner from tansferring actual possession of premises to a third party (very difficult, but not impossible in my humble opinion). Place on record the expenses incurred by you and investment of time and efforts, excusively overseeing renovation by you in improvement of the property et al pursuant to your obligations under the Agreement to Lease; and the owner's intent to create third-party tenancy rights on the strength of those improvements, while denying you the fruits of your labour and investment (completely a question of equity more than anything else).

Siddhartha Ray 13 February 2017

You are right, I must file now to prevent breach of obligation along with damages because the Lessor not only is renovating on his on whims and fancy but has also completely destructed most of my creations because he does not have the means to continue it further. Creations that were erected after months of planning and under the hired expertise of structural engineers to withstand sesimic activity of a region declared zone 5.

It gets even more interesting as the Lessor although signed an agreement which says "the Lessor intends to lease out after construction of additional floors / portions and for the purposes of which has already submitted a proposal of a building map for approval to the appropriate authorities..." and indeed he did and after made me invest money according to the submitted plan even before its approval and now has submitted a letter to the Corporation for not approving the plan as he intends to withdrawal his proposal.

This ought to be criminal. Although the lease was signed this past October I have now worked nearly a year on this project as everythign was verbally finalized April 2016.

The Lessor submitted a building plan for approval then leased the building to me, after informed that the plan is near approval and made me invest money towards developing his property... Once I was invested to his satisfaction his mother tries to renogiate the lease and when I decline the Lessor decides that he doesnot want to lease out any more because his mother does not agree (BTW he is 47) so he kicks me out, destroys my development, is renovating to his fancy and after writes to the autorities that he intends to withdraw his proposal.

Does not this qualify as fraud or criminal? Will the judge not allow an injunction if I can substantiate the above?