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

Mr. Alok Sharma, a resident of the city of Aravalli, is facing a peculiar situation with his landlord, Mr. Ramesh Gupta. The landlord is insisting that the monthly rent of Rs. 22,000 be paid exclusively in cash. This demand has made Mr. Sharma suspicious, as it strongly suggests an attempt by the landlord to evade taxes on his rental income. Mr. Sharma is now concerned about his own legal standing and any potential complications that might arise from this arrangement.

Advice in such cases

• Review Your Rent Agreement: The first step is to carefully read your rental agreement. It often specifies the accepted modes of payment. If the agreement allows for bank transfers or cheques, the landlord cannot unilaterally change these terms.
• Maintain a Paper Trail: Document every interaction. If the landlord insists on cash verbally, send a follow-up email or a message summarising the conversation and politely requesting to pay through banking channels for record-keeping purposes.
• Insist on Receipts: If you are compelled to pay in cash, always insist on a duly signed and stamped rent receipt for every payment. This is your primary proof of payment and is a legal requirement for the landlord to provide.
• 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.

Applicable Sections of Law

This issue is primarily governed by civil and fiscal laws rather than criminal statutes. While it does not directly fall under the Bharatiya Nyaya Sanhita (BNS), several other laws are pertinent:

• The Income Tax Act, 1961: Section 269ST prohibits any person from receiving an amount of Rs. 2 lakh or more in cash in a single day, for a single transaction, or in aggregate from a person in a year. While monthly rent may be lower, the landlord is obligated to declare this rental income. The insistence on cash is a strong indicator of intent to evade tax, which has consequences for the landlord under this Act.
• The Model Tenancy Act, 2021: This act, which many states are adopting, mandates written tenancy agreements. It also makes it obligatory for the landlord to provide a signed receipt for every rent payment received.
• State-Specific Rent Control Acts: Each state has its own rent laws that outline the rights and obligations of tenants and landlords, including provisions related to rent payment and eviction procedures.

If you are the complainant

If you, as the tenant, decide to take action against the landlord’s unreasonable demand, here is the approach to follow:

• Formal Communication: Send a formal letter via registered post to your landlord. In the letter, state your willingness to pay the rent on time but through traceable means like a bank transfer or cheque, citing the need for proper financial records.
• Gather Evidence: Keep copies of all communication, your rent agreement, and bank statements showing you have the funds ready to be transferred. This documentation will be crucial if the matter escalates.
• 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.

If you are the victim

As a tenant being pressured into an uncomfortable situation, you are in a vulnerable position. Here is what you need to know to protect yourself:

• Your Liability is Limited: You are generally not held responsible for your landlord’s tax evasion. Your primary legal obligation is to pay the rent on time. The onus to declare that income and pay taxes falls squarely on the landlord.
• Protect Yourself from False Claims: The biggest risk for you is the landlord later falsely claiming non-payment of rent. Without proof, you are exposed. Therefore, never pay in cash without getting a signed receipt at the same time.
• Do Not Be Intimidated: A landlord cannot legally evict you for refusing to comply with an unreasonable and potentially illegal demand, especially if you are offering to pay rent through legitimate channels specified in your agreement.
• 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.

How the police behave in such cases

The police generally do not intervene in such landlord-tenant disputes, as they are considered civil matters. Filing a complaint at a police station will likely result in them advising you to approach a civil court or the Rent Controller. The police will not register a First Information Report (FIR) under the Bharatiya Nagarik Suraksha Sanhita (BNSS) for a demand for cash rent. Their involvement would only be warranted if the dispute escalates to criminal acts like harassment, illegal eviction by force, or threats to your safety.

FAQs people normally have

• Can my landlord evict me for refusing to pay in cash? No, a landlord cannot evict you for this reason, provided you are attempting to pay the rent through other valid methods. Eviction is a legal process that must follow specific procedures laid down in the state’s Rent Act, and “refusal to pay in cash” is not a valid ground for eviction.
• Am I participating in tax evasion if I pay cash? No, the legal responsibility to declare income rests with the person receiving it (the landlord). As a tenant, your duty is to pay rent. However, by insisting on a receipt, you ensure you are not facilitating any wrongdoing and are protecting your own interests.
• What if we don’t have a written rent agreement? While oral agreements are recognized by law, they are very difficult to enforce as it becomes one person’s word against another’s. The Model Tenancy Act, 2021, strongly advocates for written agreements to prevent such disputes. It is always in your best interest to have a written and registered agreement.

What evidence is required?

To protect your position or pursue legal action, you should gather the following evidence:

• The Rent Agreement: This is the foundational document outlining the terms of the tenancy.
• Written Communication: Any emails, text messages, or letters where the mode of payment is discussed.
• Proof of Payment Attempts: Screenshots of attempted online transfers or copies of cheques you have offered to the landlord.
• Rent Receipts: If you have paid in cash, the receipts are your most critical evidence.
• Witnesses: If another person was present during conversations about rent payment, their testimony can be valuable.

How long will the investigation take?

Since this is a civil dispute, there is no “investigation” in the criminal sense. If the matter is taken to the Rent Controller or a civil court, the duration can vary widely. A straightforward case might be resolved in a few months, but contested proceedings can extend for over a year or more, depending on the court’s schedule, adjournments, and the complexity of the arguments presented by both sides.

Advocate Sudhir Rao, Supreme Court of India