LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Uday S   31 May 2021

Lease amount stuck and property mortgaged

We paid a sum of 22lakhs to the landlord for a house,  and have a lease agreement of 2 years ( not registered in Sub registrar) and have a cheque from the landlord for the same amount, which has a mention in the lease agreement also stating all amount to be returned to tenant at the end of lease period.

We recently found that landlord had mortgaged this property and is unable to pay installments and the bank has stuck a notice on the front door saying property is listed as NPA. The bank persons also said they will evict us by giving a 2 months notice if no payments are done by landlord in the next  few days. 

all transactions were done through RTGS to landlord. the lease is ending in September and we are in need of that money due to some other plans and dont want to continue staying at this place. Knowing the situation I have following questions, pls help.

1. Can Bank evict us?

2. How to best send a notice to landlord saying we are leaving in September, will a whatsapp message help?

3. If landlord fails to clear payments, I will need to vacate as I understand I can't overstay after end of agreement. What is the best thing to do

4. Can I file any legal case against landlord? He has political influence and is a builder himself, can he cause trouble to us?

5. Should I start any action now?

6. The landlords parents stay closely and landlord ks definitely traceable.

7. How to recover my money?


 7 Replies

Sankaranarayanan (Advocate)     31 May 2021

Lease agreement must be registered . You can send a notice to land lord for repay the money what you have paid with the support of lawyer. you can file a suit against the land lord 

G.L.N. Prasad (Retired employee.)     31 May 2021

Unless the lease terms reduced in writing and registered it has no legal entity.  The bank can even argue that the lease was after all these actions from them and back-dated.

1.The bank may not like to enter into further litigation with you.  They may demand you for remitting rent and admit in writing that the possession is with the bank and they may be satisfied with an undertaking from you..

2.You have not indicated what obstructs you from sending a legal notice to the landlord and copy to the bank, though what's app message is legally valid but not signed.  Please follow registered notice to avoid distraction on minor issues during litigation.

3.Nothing forbids you in making a request to the Bank for permitting occupation under their possession and for remittance to the landlord NPA. 

4.When the lease is reduced in writing, I am afraid that you have no legal stand to enter into litigation when the terms and conditions are not reduced in writing through a registered deed, it is very difficult to point out violations.

5.There is no need for immediate action from your side and establish contacts both with landlord and Bank and always avoid litigation as your occupation is not legal without any registered deed.

6.Landlord's whereabouts are not your concern when you remit the rent to his account with the bank.

7.Contact a local advocate and present the cheque if so advised in view of the developments with the bank and there was the suppression of material facts.  Your Advocate engaged for this purpose may guide you on getting a priority in getting the bank the refund through attachment, after the mortgage with the bank is settled. 

Explore the possibilities of registering the deed if there is a scope with a fine as per the advice of your advocate, though there are remote chances of any advantaage.

The issue with the lease is complicated and the litigation with a powerful bank equipped with money, men, and machinery more complicated the issue.  By not registering the lease agreement you have given further scope for more complications.  Engage an advocate and as the remaining lease maybe for few months, your advocate can pull out you from the problem by negotiating with the bank.  There are many gaps in the query and the dates of mortgage, the lease terms, the date of such lease, the actual rent.payable, whether you have knowledge of such lending by the bank, whether the security of the building is primary or collateral etc.

If the lender is a PSU bank, you may explore possibilities of continuing possession till you recover your advance from the bank.

Uday S   31 May 2021

Hello sir,

thanks for the details.

Her are some more facts as you asked for.

The lease Agreement is on a signed stamp paper by both parties and it has a mention of the Cheque number and Landlord's Aadhar number stating that the same amount to be returned to the Tenant when the Lease Agreement is over (Lease agreement expires in the month of September'2021) and a 2 month notice needs to be given to the Landlord before vacating or he can give a 2 months notice to us in case he needs possession, In our case we are planning to notify the Landlord even earlier( by end of June), just to be on the safer side.

We know that we cannot take any legal action against the bank, as we are no party of interest.

Here my query is can I file a Civil Suit against the Landlord and win against him by producing the Lease Agreement and Produce the cheque in case the landlord fails to repay me, as I mentioned we always maintain very clear transactions and the money towards Lease was paid by RTGS (a PSU bank). What are the chances of me winning against the Landlord and ensuring Court takes a Legal action against him in case he fails to return money as per Agreement, as agreement clearly states all the amount paid towards lease needs to be returned at the end of lease.

There is no Rent payable on the house, as this is on Lease basis. We only pay maintenance, Water and Electricity Bills every month and it is an apartment building and this is also clearly stated in the Lease Agreement.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     31 May 2021

e-signatures are legally valid . Digital signatures can be used and it is valid. Yes digitally signed documents are valid and admissible evidence in court of law. Yes a lawyer can send a notice through e mail or watsapp. 

Dr J C Vashista (Advocate)     01 June 2021

Lease deed for 12 months or more are required to be (compulsory) registered in terms of Section 17 of Registration Act, 1908, therefore, unregistered lease deed is not a legal document which can not be taken in evidence.

Bank has first charge over the mortgaged property and it is well within right to evict / auction the same.

Issue legal notice for refund of the money paid by you.

It is better to consult and engage a local prudent lawyer for appreciation of facts / documents, professional advise and necessary proceeding.

P. Venu (Advocate)     01 June 2021

To my knowledge, the Bank cannot and may not evict you during the period of lease, in spite of the lease being registered. 

You can initiate legal action for realisation of the deposit amount relying on the provisions of Section 49 of the Registration Act. However, there cannot be definite opinion as to the success in realising the amount.

Facts posted suggest an amicable settlement would be the most expeditious, legal issues and elements thereto notwithstanding.

T. Kalaiselvan, Advocate (Advocate)     02 June 2021

1. The bank cannot evict the tenant till the expiration of the current lease agreement period.

2. You may send a legal notice to the landlord either by yourself in writing or through a lawyer demanding the return of your advance amount by the time you will be vacating the rented premises.

3. If the landlord fails to comply with the demand for return of your advance amount you may file a money recovery suit through a civil court alternately you can file a cheque bounce case also based on the cheque duly signed by the landlord now in your possession.

4. You don't worry about his influence or his status, you may proceed with what is your concern and requirement as per law.

You may follow the above with the help of an advocate in the local.

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register