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Mohit (Partner)     07 September 2008

Commercial Property on Rent issue

Hi,

In may'07, I rented a commercial property in Vaishali, Ghaziabad to open up a partnership software development company. We gave the landlord three months of advance, and signed a contract on a Rs. 100 stamp paper. The contract was prepared by the landlord and we were totally ignorant of the the required procedures. The landlord did not provide us with any electricity connection and I had to pay a bribe of Rs. 24,000 to get electricity meter installed, which eventually got installed in my name. However, we moved away from the premises in June'08 and since we did not give any notice period, the landlord declined to return our advance money.

This month, that is Sep'08, we received a notice from The DM's Office in Ghaziabad saying that we needed to sign the rent agreement on a stamp paper of Rs. 61,000 and since we did not do that, they have taken it as stealing of stamp duty. Also, they say that we need to pay fine to the tune of Rs. 2, 75,000, making the total amount as Rs. 3, 25, 000 or so.

We are now really in a fix as to what should be done. We had absolutely no idea that we needed to sign a rent agreement on 61000 Rs stamp paper, and if we had known, we won't have even bothered renting the place. Besides, the entire thing was done by the landlord and we just signed the agreement as is normally done by a tenant.

Can anybody suggest what could be done?


Learning

 3 Replies

H. S. Thukral (Lawyer)     08 September 2008

Whart was the duration of the rent agreement ? was it registered ?


A rent agreement less than one year need not be registered and it is a simple agreement which can be executed on a stamp paper of Rs. 50/-


It appears from what ever you have stated that your agreemnt was for more than one year and you did not get it registered. Consequences are that this document is not a legal document in the eyes of law.  Now if this is not a valid document DM can not blame you for evasion of duty.  It appears that perhaps your ex-landlord is getting mischievious and got issued the aforesaid  notice. Also please go through the docuement that who was to pay for the stamp duty under the agreement.   Kindly await for the opinion of my other ld. friends but my opinion is that landlord wasl liable to pay stamp duty if it was registered. Did you purchase 100/- stamp paper in your name ?

Ajay kumar singh (Advocate)     08 September 2008

So far I understand, no deficit stamp duty can be charged on a document unless it is used in a legal proceeding. The D.M's office appears to have been misled by someone.

Mohit (Partner)     08 September 2008

Hi, thanks for your reply. The duration of agreement was three years. And the agreement was prepared by the landlord. We had no hands in that. We knew nothing about registering the contract. There is no mention of stamp duty in the contract. It is just about renting his premises. The stamp paper is also not on my name, it was purchased by the landlord.


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