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A slow and inevitable rise of industrialization and urbanization of the metropolitan cities, particularly Mumbai, has given a strong impetus not only to the demand, but also the growth of the real estate sector, in terms of the commercial and residential spaces, in several cities across India. This in turn, has resulted in the soaring prices and cost of real estate properties.
Due to the exorbitant real estate prices, people including business owners find it more convenient and economical to take properties on leave and licence or lease as opposed to purchasing them. As a result, there has been an influx in the execution of leave and license agreement.
A leave and license agreement unlike an agreement of lease is one which only confers a license on the licensee to use the premises for a specific duration subject to several terms and conditions. Such agreements by their very nature favour the licensor (i.e. the owner of the property) as they do not confer any rights on the licensee with respect to the property. As such, leave and license agreements are the most preferred form of agreements for property owners.
A lease is a defined term under the Transfer of Property Act, 1882 (TOPA) and gets its legitimacy thereunder. A leave and license agreement is essentially a license to use a premise as governed under the Indian Easement Act, 1882 (Easement Act). For instance, in the State of Maharashtra, leave and license agreements are recognized as a contractual relationship between two parties in respect of a premises and the same is regulated under the Maharashtra Rent Control Act, 1999. Similarly, it is important also to note that the agreements entered and executed between the parties are governed by state laws, for instance, (i) the Maharashtra Rent Control Act 1999, (ii) Rent Control Act (1958) Delhi, (iii) Tamil Nadu Buildings (Lease and Rent Control) Act (1960), etc. which are applicable to their respective State.
Leave and license agreements thus tilt heavily in favour of the property owners and licensees are almost at the mercy of the licensors with virtually no rights whatsoever.
The rightful eviction of a party in India has always been of great concern. Till date landlords have always misused their powers and are accustomed to illegally evict the tenants from the premises without following due process of law. However, the tenants are given some specific protection against forcible dispossession and eviction. Despite all the comfort and simple living as tenants and licensee adhering to all the terms of the agreements, there is always a continuous fear to them of getting an inexcusable eviction notice from their landlord. With the change over the years, there are quite a number of cases where the landlord has filed an eviction notice on baseless and concocted grounds and inconveniently disturbed the tenants and licensee.
Amidst the Covid-19 pandemic and India being one of the most affected country across the globe, people are being forcefully evicted from their homes and commercial premises since the commencement of lockdown i.e. mid-night of March 25, 2020 due to non-payment and default of license fees. Furthermore, such evictions carried out during lockdown have been generally unlawful and illegal without following due process of law. The landlords have taken undue advantage of the nationwide lockdown and are well aware that people being aggrieved by it may not have access to legal remedies to reserve their rights.
TOPA provides rights and obligations of the lessee and lessor. However, under the Easement Act, where a license has been granted for a consideration, and the non-defaulting licensee, is evicted by the grantor before he has fully enjoyed, under the license, the right for which he contracted, he is entitled to recover compensation from the grantor. While TOPA mandates that a landlord must follow due process of law while evicting the licensee it does not contain any provision which enables such a licensee to remain in possession of the licensed premises.
SUIT UNDER THE SPECIFIC RELIEF ACT, 1963 (SPECIFIC RELIEF ACT) AND THE CODE OF CIVIL PROCEDURE, 1908 (CPC)
While a licensee has no remedy under TOPA with respect to forceful eviction, such a licensee can file a suit under the Specific Relief Act for a special and speedy remedy which is to be put back in possession of the licensed premises. The only thing necessary for a licensee to establish in such a case is that the licensor evicted him wrongfully and without following due process of law. In such a case, the Specific Relief Act provide that an investigation into the title of the Suit Premises is irrelevant. It was held in In Sujit Pal Versus Prabir Kumar Sun, it was held that when the plaintiff in a suit for permanent injunction and declaration of tenancy was forcibly dispossessed in violation of the interim injunction, the civil Court can invoke its inherent power to grant temporary mandatory injunction by directing the police to restore possession. This is one such instance where the law which generally favours property owners makes an exception for licensees who have been wronged by being forcefully evicted.
In addition to the aforementioned relief contained herein below are some of the additional reliefs available to a licensee who has been wrongfully evicted.
A. SUIT FOR DAMAGES
An aggrieved party is entitled to claim actual monetary damages for the expenses resulting from the illegal eviction which includes loss of business and opportunity, temporary accommodation, mental harassment and distress, damages caused to the movable goods in the premises, loss of goods while the aggrieved party was locked out and any other instance which may be relevant to the merits of each case. Some States may also allow such an aggrieved party to recover monetary penalties such as or two to three times of the actual awarded damages. However, it is pertinent to note that Suit for damages and Suit under Section 6 of the Specific Relief Act cannot be clubbed together in any manner whatsoever.
B. POLICE COMPLAINT UNDER THE PROVISIONS OF INDIA PENAL CODE, 1908
In some cases, landlords take the law into their hands by getting utility companies to cut off services to the licensed premises by deliberately to pay the relevant bills, changing the locks, threatening the licensee and restricting entry to the licensed premises. Such acts committed by the Landlord amount to harassment and entitled the licensee to file a police complaint. As such, the Landlord will be criminally liable for various offences of the Indian Penal Code, 1908 for trespass, wrongful eviction, assault, battery, slander, intentional infliction of emotional distress and any other provision which may be applicable which applies case to case basis.
Even though the landlord is entitled to repossess the property, the landlord cannot remove the tenant/aggrieved party without the due process of law. Once an officer, typically a court receiver or a sheriff, receives judgment in an eviction suit, they will notify the tenant of the lawful eviction and the number of days the tenant has to vacate the premises. If the tenant fails to vacate the property within the time specified, the law enforcement official may physically remove the tenant. However, landlords should restrain themselves from taking law into their hands.
Amit Vyas is Founder Partner, Rishika Rajadhyaksha is a Principal Associate, Pratik Jhaveri is Associate Manager at Vertices Partners.