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

Mr. Rohan Mehra, a software engineer, resides in a Paying Guest (PG) accommodation in the city of Anandpur. He, along with several other tenants, had paid a substantial security deposit to Mr. Alok Verma, the manager appointed by the property owner, Mr. Suresh Gupta. Recently, Mr. Verma vanished after collecting the monthly payments and deposits, leaving the tenants in a difficult position. When Mr. Mehra and the other residents approached Mr. Gupta to request the refund of their security deposits upon deciding to vacate the premises, he outright refused. Mr. Gupta’s defense is that since the payments were made directly to the manager and not to him, he is not liable for the refund. He holds that the tenants’ transaction was with the now-absconded manager, absolving him of any responsibility. Mr. Mehra is now seeking legal advice on the steps he can take to recover his and his fellow tenants’ security deposits.

Advice in such cases

The situation involves a clear dispute between a tenant and a landlord, complicated by the actions of an intermediary agent. Here is some general advice:

• Gather all tenants who are affected. Acting collectively can strengthen your case and distribute the costs and efforts of legal action.
• Do not engage in any aggressive or illegal activities. Maintain a record of all communications with the owner from this point forward.
• Send a formal written communication, preferably a legal notice drafted by a lawyer, to the property owner demanding the refund of the security deposit. This creates a formal record of your demand.
• 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 has both civil and criminal dimensions under Indian law. The primary legal argument against the owner is the principle of ‘vicarious liability’, where a principal (the owner) is liable for the acts of their agent (the manager).

• Indian Contract Act, 1872: The agreement, whether written or oral, between you and the PG is a contract. The owner’s refusal to refund the deposit is a breach of this contract. You can file a civil suit for recovery of money.
• Bharatiya Nyaya Sanhita, 2023 (BNS): Certain sections may apply if criminal intent can be established.
  • Section 316 of BNS (Criminal Breach of Trust): If it can be proven that the owner and manager were entrusted with your money (security deposit) and they dishonestly misappropriated it or converted it to their own use, a criminal complaint can be filed. The owner cannot simply escape liability by blaming his appointed agent.
  • Section 318 of BNS (Cheating): If it can be shown that there was a dishonest intention from the very beginning to not refund the deposit, it could amount to cheating.
• State-Specific Tenancy/Rent Acts: Many states have specific laws governing rent and tenancy, which include provisions for security deposits. These acts often provide a faster dispute resolution mechanism.

If you are the complainant

If you choose to pursue a criminal remedy, you will be the complainant. The process generally involves the following steps:

• Draft a detailed written complaint outlining all the facts, including the details of the payment, the role of the manager, the owner’s refusal, and the disappearance of the manager.
• Submit this complaint to the Station House Officer (SHO) of the local police station having jurisdiction over the property’s location.
• If the police refuse to register a First Information Report (FIR), you can send the complaint to a higher-ranking police official, like the Superintendent of Police.
• If an FIR is still not registered, you can file a private complaint before the Magistrate under Section 175(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
• 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 victim of this situation, your primary goal is the recovery of your money. This is typically achieved through a civil lawsuit.

• 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.
• The first step is to send a well-drafted legal notice to the property owner. This notice should clearly state the facts, the amount due, and the legal basis for your claim, and give the owner a specific timeframe (e.g., 15 or 30 days) to refund the money.
• If the owner fails to comply with the legal notice, you can file a summary suit or a regular civil suit for the recovery of money in the appropriate civil court.
• The principle of agency will be key here. You need to establish that the manager was acting as an agent of the owner, making the owner liable for his actions performed in the course of his employment.

How the police behave in such cases

Police often perceive such disputes as being “civil in nature.” They may be hesitant to register an FIR and might advise you to approach a civil court. They may try to mediate between the parties for a quick settlement. However, if your complaint is well-drafted by a lawyer and clearly highlights the elements of a criminal offense like criminal breach of trust, the police are more likely to take action. Persistence and proper legal guidance are crucial when dealing with the police in such matters.

FAQs people normally have

• Is the owner not responsible if I paid the manager?
  No, the owner is generally held responsible. The manager was an agent appointed by the owner to manage the property. Under the law of agency, the principal (owner) is liable for the acts of their agent (manager) done within the scope of their authority. Collecting rent and security deposits is typically within a property manager’s authority.
• Should I file a civil case or a criminal case?
  Both have their merits. A criminal case can put pressure on the owner for a faster settlement. A civil case is the direct legal path to getting a court order for your money to be returned. An experienced lawyer may advise pursuing both simultaneously.
• What if I don’t have a written agreement?
  Even without a written agreement, a tenancy can be established through other evidence like payment receipts, bank statements, WhatsApp chats, or witness testimony from other tenants.

What evidence is required?

Strong evidence is key to winning your case. You should gather:

• Any written PG or rental agreement you might have signed.
• Receipts for the security deposit and rent payments, even if they were issued by the manager.
• Bank statements or online transaction records showing the transfer of money.
• Any communication with the owner or manager, such as emails, SMS, or WhatsApp messages.
• Photographs or videos of the premises.
• Contact details of other tenants who can act as witnesses.

How long will the investigation take?

If a criminal case is filed, the police investigation under the BNSS has prescribed timelines, but these can vary depending on the complexity of the case and the workload of the police. The subsequent court trial can take a considerable amount of time. A civil suit for recovery of money is also a lengthy process and can take anywhere from a few months to several years to be fully resolved through the court system. However, sending a strong legal notice or filing a case often prompts the opposing party to seek a settlement out of court to avoid a prolonged legal battle.

Advocate Sudhir Rao, Supreme Court of India