A City Civil Court has decreed a money recovery suit in favor of a tenant, directing a property promoter to refund a lease security deposit of ₹7,00,000 along with substantial interest. The Court held that the plaintiff had successfully established the landlord-tenant relationship and the subsequent failure of the defendant to return the refundable deposit despite the termination of the lease.

Counsel’s Arguments: Establishing Liability Through Documentary Evidence

Mr. Rahul Jagannathan, appearing for the plaintiff (the tenant), submitted that the suit was a straightforward case of a promoter refusing to honour the contractual obligation to refund a security deposit.

He advanced the following key arguments to solidify the claim:

• Proof of Consideration: Mr. Rahul Jagannathan produced bank statements and financial records to prove that the plaintiff had paid the entire sum of ₹7,00,000 toward the lease agreement at its inception.

• Curing Procedural Defects: Addressing the issue of the unregistered lease deed, Mr. Rahul Jagannathan informed the Court that the plaintiff had proactively paid the deficit stamp duty and penalty, thereby making the document admissible in evidence for collateral purposes.

• Proving the Relationship: With the lease deed admitted into evidence, Mr. Rahul Jagannathan argued that the landlord-tenant relationship stood legally proven. He noted that once the relationship and the payment were established, the burden of proof shifted to the defendant to show that the money had been returned.

• Refusal Despite Notice: It was contended that the landlord had willfully refused to refund the deposit even after receiving a formal notice from the plaintiff expressing the intent to vacate the premises.

• Statutory Duty to Refund: Mr. Rahul Jagannathan argued that based on the terms of the deed and the corroborated bank statements, the defendant was legally and contractually “duty-bound” to return the security deposit upon the tenant’s exit.

Court’s Directions: Recovery with Accrued Interest

The Court, after analyzing the evidence and the arguments presented by Mr. Rahul Jagannathan, found the defendant’s retention of the money to be unlawful. The Court noted that the plaintiff had discharged the burden of proof by showing the transfer of funds and the existence of the lease.

The Court’s decree included the following directions:

• Principal Recovery: The defendant/promoter is directed to pay the sum of ₹7,00,000 to the plaintiff.

• Pre-Decree Interest: Accepting the argument that the plaintiff was deprived of their funds during the litigation, the Court awarded interest at the rate of 12% per annum from the date of the filing of the suit.

• Future Interest: To ensure the realization of the amount, the Court directed an additional interest of 6% per annum from the date of the decree until the date of actual realization.
• Cost of Litigation: The Court further directed the defendant to bear the costs of the suit, considering the plaintiff was forced into litigation to recover a legitimate debt.

Conclusion

The judgment reaffirms that promoters and landlords cannot arbitrarily withhold security deposits. By curing the stamp duty defects and providing a clear paper trail of the transaction, the plaintiff’s counsel ensured that the court had sufficient grounds to pass a decree for the full amount plus interest.

“The defendant, having admitted to the relationship and having received the funds via bank transfer, is under a legal obligation to refund the security deposit. Any retention beyond the lease period, especially after notice, entitles the plaintiff to interest as a matter of right.”

#LeaseDispute #SecurityDeposit #TenantRights #CourtOrder #PropertyLaw #RealEstateDispute #MoneyRecovery #CivilCourt #LandlordTenant