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MSR (Manager)     13 April 2012

Compensation for 50-year lease on vacating premises

My father who is currently 80-years old has a house in Pune, which he had taken on lease for a monthly payment of Rs. 30 which was slowly increased to Rs. 100 per month.  At that time he has also paid a pugree of Rs. 1000.  In the intervening years, the landlord has never spent any money on the upkeep or maintenance of the house/building.

My parents subsequently shifted to Delhi but retained the house in Pune, since they visited Pune sometimes to consult the medical doctors for my mother who had cancer.  For the past 10 years though, the house has remained vacant and after the death of my mother three years ago, the landlord has requested us to vacate the premises, to which we are agreeable.

My father has consistently paid the rent, despite the landlord never coming to collect it.  In the past ten years, the rent has not been paid, since the landlord changed residence, and we were not aware of his new place of residence.

The current landlord is the son of the original landlord who passed away a few years ago.  The building also has three other tenants, of which one is similarly not staying and has kept the house locked for many years now.

My question is whether my father is entitled to any compensation in exchange for vacating the premises and giving up his tenancy rights.

If yes, then what would be a reasonable amount of compensation, he can ask for?  The size of the property is about 300 sqft.  The house is located in the centre of the city and current propery rates there are approx. Rs. 8000 per sq.ft.  We have suggested two criteria for deciding this:

  • Rs. 1000 in 1961 could purchase 100 gms of gold.  Hence, we can consider the current value of 100 gms of gold as a reasonable benchmark
  • Both tenants should be compensated in fair manner, and negotiations can be done jointly with both rather than singly.

The landlord refuses to agree to both suggestions.  He is willing to pay max One lakh as compensation to us, which we feel is not fair compensation.  He also refuses to deal with both tenants together, preferring to deal with us singly.

Please guide how we should deal with the landlord, since we do not wish to avoid litigation, but at the same want to be compensated fairly.

Appreciate your quick response.



Learning

 8 Replies

atmaranjan mohapatra (advocate)     17 April 2012

Tenancy is u/s 105 to 116 of T.P.Act 1882 . As a tenant , you do not have in right ,title and interest in the property . You are suppose to hand over the property in the same condition ,as you had taken . You are suppose to keep the property air and water tight . To avoid litigation ,the landlord is offering some money .If the landlord moves the court for evication ,in that event ,you are liable to pay the market rent which will be very heavy on you . It is adviseable the premises at the earliest .

MSR (Manager)     17 April 2012

Thank  you for your reply and guidance.  I was informed that the Maharashtra Rent Control Act which covers older lease agreeements, not lease and licence agreeements confers different rights.  Please confirm if my understanding is correct.


What happens to the pugree which was paid 50 years ago.  Are we not entitled to any compensation for that?  If we have a claim on that, then how is that to be calculated in today's terms?

Thank you for your continued guidance

MSR (Manager)     18 April 2012

Thank you for updating my knowledge and clearing many misconceptions.  Since one hears so many stories of how tenants with old leases refuse to vacate, despite the premises not been occupied by them and also how they do get compensation from landlords to vacate the premises, we were under the misconception that we have these rights as tenants under the law.


Thank you for clarifying the law . We would like to remain within the legal system and not harass the landlord either.

So what would you advice we do to settle the matter amicably? Would appreciate your guidance.

atmaranjan mohapatra (advocate)     24 April 2012

The Apex Court judgement in Atmaram Properties Vs. The Federal Motors is the best answer for you.

MSR (Manager)     24 April 2012

Thank you for your guidance.  Can you tell me when this judgement was given?  I tried searching in the Supreme Court records, but could not find it.....


Please guide....

atmaranjan mohapatra (advocate)     24 April 2012

M/S. Atma Ram Properties ( P) Ltd. V.M/S Federal MotorsPVT> LTD [ 2004] RD-SC 751( 10 December 2004 )


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