Non-payment of stamp duty on sub-lease & agreement held in-valid
M.S.SUJAI
(Querist) 09 February 2013
This query is : Resolved
We have taken a Commercial Property on Lease, Vide Registered Lease Deed, for a period of 15 Years and the said Agreement is registered.
Subsequently, the aforesaid Property was further Sub-Leased, to another Party, Vide Un-Registered Sub-Lease Deed, for a period of 10 Years.
As per the said Sub-Lease Deed;
1) There was a rent free fit out period of 60 days;
2) Rentals payable in advance;
3) Lock-in-period of 20 Months and if Sub-Lessee desires to vacate the premises before the lock-in-period, then Sub-Lessee is required to pay rentals for the balance lock-in-period;
4) Termination; if Sub-Lessee doesn’t pay the rent for a consecutive period of 3 Months;
5) Arbitration Clause; before resorting to any litigation, the disputes shall be settled b/w the parties through a sole arbitrator appointed & duly agreed and appointed by the Parties;
6) Stamp Duty: Payable by the Sub-Lessee as per the Agreement.
Subsequently, after signing of the Sub-Lease Deed;
1) Sub-Lessee kept on assuring that they will start their business in few days;
2) Sub-Lessee kept on assuring that they will register the Sub-Lease Agreement; &
3) the Sub-Lessee, neither took possession of the Property, nor paid the rentals;
4) Rent-free fit-out period of 60 days lapsed and monthly rentals were not paid by the Sub-Lessee for a consecutive period of 3 months;
5) As such, Sub-lessor having no other option; (as neither Sub-lessee was taking possession, nor paying the rentals) terminated the Sub-Lease Agreement;
6) Dispute arose as to recovery of rentals (even after adjusting the Security Deposits, rent recovery stood substantial);
7) After termination of the Sub-Lease Deed; Notice was sent to Opposite Party, referring an arbitrator, and sought his consent for appointment of an arbitrator;
8) Opp Party rejected the Name of the Arbitrator suggested by us.
9) As such, an CMP Petition was filed before High Court, u/s 11 (5) seeking appointment of the Arbitrator;
10) Notice was served. Opp Party Counsel appeared and argued that as the Sub-Lease Agreement is an Un-registered Deed & its unenforceable, as document itself is invalid.
Note:
Sub-lessee never took possession of the Premise. The Sub-Lessee failed to pay monthly rent, even after rent-free fit out period. Sub-Lessee failed to pay rentals for the balance lock-in-period, as agreement was terminated. Sub-Lessee failed to register the Sub-Lease Agreement.
My queries are;
1) Such being a case, am I supposed to pay Stamp Duty charges now (even though as per Sub-Lease Deed, it was under the scope of the Sub-Lessee), to make the Agreement enforecable?.
2) What further steps can be taken from my end to recover the Rentals?
Pl advice.
ajay sethi
(Expert) 09 February 2013
was permission of lessor taken beforegiving premises on lease ?.
a document which is not stamped and regd is in admissible in evidence .
what orders have been passed by High court regarding appointment of sole arbitrator ?
contact a local lawyer . necessary to go through provisions of agrement , case filed by you in high court to advise
R.K Nanda
(Expert) 09 February 2013
query too long.contact local lawyer.
Raj Kumar Makkad
(Expert) 09 February 2013
As you have already gone to High court so no need to advise you to contact a local lawyer.
Even though the sub-lease was not registered and sub-lessee even never took the physical possession of the land even then the agreement duly executed is valid. Non-registration of sub-lease deed is not fatal qua the recovery of the rent and other damages mentioned thereto especially when the respondent himself is responsible for the lapses to get the document registered.
