If you are stuck in such a situation, here is what to do.

A young student, Sameer, moved to the bustling city of Gautam Nagar for his higher education. He found a Paying Guest (PG) accommodation and, as per the agreement, paid a security deposit of ₹35,000 to the owner, Mr. Verma. The initial terms were clear that the deposit would be refundable upon vacating, provided a notice period was served. After staying for a few months, Sameer decided to move to a different locality and duly informed the owner. However, Mr. Verma began creating issues. He refused to refund the ₹35,000, making baseless claims and changing the terms of the verbal agreement. He also refused to adjust the deposit amount against the rent for the final months of Sameer’s stay. Sameer was in a tough spot, as he needed that money for the deposit on his new accommodation and did not want to add to his parents’ financial burden. This is a common scenario faced by many students and young professionals across the country.

Advice in such cases

If you find yourself in a situation where a PG owner or landlord is unlawfully withholding your security deposit, here are the steps you can take:

• Review Your Agreement: Carefully read the terms and conditions of your rental or PG agreement. Pay close attention to clauses related to the security deposit, notice period, and conditions for deduction.
• Maintain a Written Record: Shift all communication to a written format like email or WhatsApp. Create a clear paper trail of your requests for the refund and the owner’s responses. Avoid verbal arguments as they are difficult to prove.
• Send a Formal Demand Letter: Before proceeding with legal action, send a formal letter, often called a Demand Letter, to the owner. Clearly state the amount owed, refer to the agreement, and give a specific deadline (e.g., 7-15 days) for the refund.
• File a Police Complaint: If you believe the owner has dishonest intentions from the start and is trying to cheat you, you can file a police complaint for cheating and criminal breach of trust.
• Approach the Consumer Forum: As providing accommodation is a service, you can file a complaint in the District Consumer Disputes Redressal Forum for deficiency in service.

Applicable Sections of Law

While tenancy matters are primarily civil in nature, certain actions can attract criminal liability under the new Indian laws. The primary legal frameworks applicable are:

• The Indian Contract Act, 1872: Your rental agreement is a contract. The non-refund of a security deposit without valid reasons is a breach of this contract.
• Bharatiya Nyaya Sanhita, 2023 (BNS): If the owner’s act involves deception or fraudulent intent, the following sections may apply:
  • Section 316 of BNS: Pertains to Criminal Breach of Trust. If the owner was entrusted with your deposit and has dishonestly misappropriated it, this section can be invoked.
  • Section 318 of BNS: Pertains to Cheating. If the owner had a dishonest intention to not return the deposit from the very beginning, it may amount to cheating.
• Consumer Protection Act, 2019: A tenant or PG resident can be considered a ‘consumer’ and the housing service provided by the owner as a ‘service’. Unfairly withholding the deposit amounts to an unfair trade practice or a deficiency in service.

If you are the complainant

As the person filing the complaint (the tenant), you must be systematic and prepared.

• Gather All Documentation: Collect every piece of paper related to your tenancy. This includes the rent agreement (even if it’s just a basic document), all rent payment receipts or bank transfer statements, and proof of the security deposit payment.
• Organize Communication: Compile all WhatsApp chats, SMS messages, and emails where you have discussed the tenancy, the notice period, and the refund of the security deposit. Take screenshots and save them.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think. A lawyer will draft a strong legal notice, which often resolves the issue without going to court.
• Send a Legal Notice: Your lawyer will send a formal Legal Notice to the owner. This is a serious step that shows you are willing to take legal action. Many disputes are settled after a legal notice is received.

If you are the victim

Being a victim of such a scam can be stressful, especially when you are in a new city. Here is how you should approach the situation mentally and practically.

• Stay Calm and Assertive: Do not resort to aggression or pleading. Be firm, polite, and assertive in your communication. State the facts and your legal rights clearly.
• Know Your Rights: Understand that the security deposit is your money held in trust by the owner. It cannot be withheld arbitrarily. The owner must provide proper justification and proof (like repair bills for damages) for any deductions.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
• Do Not Give Up: The owner might try to tire you out, hoping you will drop the matter. Be persistent. Follow the legal steps one by one.

How the police behave in such cases

Approaching the police can have mixed results, and you should be aware of the possibilities:

• Civil vs. Criminal Matter: The police often perceive such disputes as civil in nature and may be reluctant to file a First Information Report (FIR). They might advise you to go to court.
• Mediation: Often, the police will summon both parties to the station and attempt to mediate a settlement. This can sometimes work in your favor as the owner may agree to return a portion or the full amount to avoid legal complications.
• Insist on an FIR: If you have strong evidence of cheating (e.g., the owner has a history of doing this with other tenants), you can insist that the police register an FIR under the relevant sections of the BNS. You may need a lawyer’s help to file a formal complaint with senior police officials or the magistrate if the local police refuse.

FAQs people normally have

Here are some frequently asked questions in such situations:

• What if I don’t have a written rent agreement?
  While a written agreement is crucial, its absence does not mean you have no rights. Your tenancy can be established through payment receipts, bank statements, and WhatsApp/email communication. An oral agreement is also a valid contract, though harder to prove.
• Can the owner deduct money for normal wear and tear?
  No. A security deposit cannot be used to cover normal wear and tear that occurs over time. It can only be used for actual damages caused by the tenant beyond normal use, and the owner must provide bills for the repairs.
• Is it worth fighting for a small amount?
  Yes. It is a matter of principle and your hard-earned money. The legal process, especially through a Consumer Forum, is designed to be accessible and relatively inexpensive. Pursuing the matter also helps prevent the owner from cheating others in the future.

What evidence is required?

Strong evidence is the backbone of your case. You will need:

• The rental/PG agreement.
• Proof of security deposit payment (bank statement, UPI transaction ID, or a signed receipt).
• Records of monthly rent payments.
• All written communication with the owner (emails, WhatsApp, SMS).
• A copy of the legal notice sent to the owner and the postal receipt.
• Photos or videos of the room’s condition when you vacated, to counter any false claims of damage.
• Names and contact details of any witnesses, such as other tenants who have faced similar issues.

How long will the investigation take?

The timeline varies depending on the path you choose:

• Legal Notice: The owner is typically given 15 to 30 days to respond or comply. Many cases are resolved at this stage.
• Police Complaint: If the police mediate, it might be resolved in a few days to a week. If an FIR is filed, the investigation can take a few months.
• Consumer Court: A case in the Consumer Forum can take anywhere from 6 months to a couple of years to reach a final decision, depending on the complexity and workload of the forum.

Advocate Sudhir Rao, Supreme Court of India