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in Property Law Civil Law
Asked July 18, 2017

Only some part of property on lease handed over and owner asking for full payment

  • 1 Answer

Hi, We are an IT company where we leased 4000 s.ft. office space in Hyderabad through a lease deed. The owner has given 35% of the property mentioned in the lease deed and promised to give the rest in a month as it was occupied by other company whose lease has completed. However, the owner has leased the complete property to our company and had failed to give the complete property. We have refused to pay the rent and stopped the deposit as the old company hasn't vacated yet and due to this our company has already lost two crucial big projects due to lack of space for hiring. Now the owner claims 50% rent with arrears in a day or two else is interfering with the business and causing nuisance and threating to forcefully leave and lock the premises and disconnecting the eminities though we are requesting time to settle the dues. The owner has breached the agreement made to our company and also tried sending goons which is a big challenge for our daily operations. Looking for a solution for this as the company has lost a great business due to this and is also effecting the current business. Would appreciate a suggestion and a helping guidance. Thanks in advance.

Answer 1

A lease is a promise by the lessor to hand over possession of the property in contract,  to the lessor for a specific time period. As per S.  108 of the Transfer of Property Act, 1882, in absence of any contract to the contrary,  the lessor is bound on the lessee's request to put him in possession of the property.  

As indicated by you, there exists no contact to the contrary and the entire property was promised by the lessor. Hence,  by refusing to hand over the remaining portion of the property, the lessor has breached the contract of lease. Under S. 73 of the Indian Contract Act, the party causing the breach can be directed to pay damages for loss caused to the affected party. 

However,  you are entitled to pay the lease amount (the due rent)  as long as the lease deed is not terminated i.e., as long as you continue occupying the said 35% of the property.  A breach does not terminate the contract as such and though you have the right to file a suit for damages and performance of the contract,  as is deemed fit by the courts,  you cannot escape your liability to pay the rent  as such. 

Agree Comment 0 Agrees over 3 years ago

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