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

Mr. Ankit Verma, a software engineer, is currently residing in a rented apartment in the city of Navipur. His landlord, Mr. Rajesh Kapoor, recently sold the property to a Mr. Sameer Gupta, citing some financial issues. The initial understanding was that Ankit would enter into a new rental agreement with Mr. Gupta and continue his tenancy. However, for the past month, Mr. Kapoor has become completely unreachable. He is not responding to Ankit’s calls or messages regarding the return of his security deposit, which amounts to two months’ rent.

The situation is stressful for Ankit as he has accepted a new job at a company named “QuantumLeap AI” in the city of Gyanpur and needs to relocate soon. He is concerned that he will not get his substantial deposit back. In a final attempt, he sent a text message to Mr. Kapoor, stating that he would be forced to file a police complaint if the deposit was not returned, but he has received no response.

Advice in such cases

Facing such a situation can be distressing, but there are clear legal steps you can take. The primary issue is a breach of the rental agreement, and the law provides remedies for it.

• Review Your Rental Agreement: The first step is to carefully read your rental agreement. It is the foundational document that outlines the terms for the security deposit refund, notice period, and obligations upon change of ownership.
• Send a Formal Legal Notice: This is the most crucial initial step. A legal notice, drafted and sent by a lawyer to both the old and new landlords, serves as a formal demand for the return of your deposit. It shows your intent to pursue legal action and is often effective in compelling the landlord to pay.
• File a Civil Suit for Recovery: If the legal notice is ignored, the next step is to file a civil suit for the recovery of your money in the appropriate court. This is the standard legal procedure for enforcing a contractual obligation.
• Consider a Police Complaint: If you have evidence to suggest that the landlord had a dishonest intention from the beginning or has misappropriated your funds, you can file a police complaint for criminal breach of trust.
• 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

Several laws come into play in such disputes:

• The Bharatiya Nyaya Sanhita (BNS), 2023: Section 316 of the BNS, which pertains to Criminal Breach of Trust, can be applied if it can be proven that the landlord dishonestly misappropriated the security deposit entrusted to them.
• The Transfer of Property Act, 1882: Section 109 is particularly relevant. It states that the new owner of the property (the transferee) inherits all the rights and liabilities of the original landlord. This means the new owner, Mr. Gupta, could also be held liable for refunding the security deposit.
• The Code of Civil Procedure, 1908: This code lays down the procedure for filing a civil suit for the recovery of money.
• State-Specific Rent Control Acts: Many states have their own Rent Control Acts that provide specific mechanisms and authorities for resolving landlord-tenant disputes, including those related to security deposits.

If you are the complainant

If you are the tenant (complainant) in this scenario, here is a checklist of actions:

• Gather All Documentation: Collect your rental agreement, proof of deposit payment (bank transfer receipt, cheque details), records of rent payments, and all communication (WhatsApp chats, SMS, emails) with both the old and new landlords.
• Send a Legal Notice to Both Parties: Your lawyer should send a well-drafted legal notice to both the original landlord and the new owner, as the liability to refund the deposit may have legally passed to the new owner upon the sale of the property.
• File a Recovery Suit: If the deposit is not refunded after the notice period expires, proceed to file a civil suit for recovery. You can also claim interest on the deposit amount and the legal costs incurred.
• File a Police Complaint: As a parallel action, you can file a complaint at the local police station under Section 316 of the BNS for criminal breach of trust.
• 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

If you find yourself in the landlord’s position (the accused party), ignoring the situation is the worst course of action.

• Do Not Ignore Communication: Avoiding calls and messages from your former tenant will only aggravate the situation and strengthen their legal case against you. Respond to their communication professionally.
• Check the Sale Agreement: Review your property sale deed. It should ideally specify whether the liability for the security deposit was transferred to the new owner or if you were responsible for returning it. This is a critical point of defence.
• Attempt to Settle: If you are liable to pay, contact the tenant and try to negotiate a settlement. If you are facing financial difficulties, be transparent and propose a payment plan. Settling the matter amicably is always better than facing a protracted legal battle.
• Respond to Legal Notice: If you receive a legal notice, do not ignore it. It is a serious legal document that precedes a 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.

How the police behave in such cases

The police response in such matters can be mixed. Primarily, they view landlord-tenant disputes, especially those concerning money, as civil in nature. They may be hesitant to file a First Information Report (FIR) and might advise you to approach the civil court. However, they will likely summon both parties to the police station to mediate and encourage a settlement. If your complaint and evidence strongly suggest a pre-meditated act of cheating or dishonest misappropriation, they are more likely to register an FIR under the relevant sections of the BNS.

FAQs people normally have

What evidence is required?

Strong evidence is key to a successful claim. You will need:

• The registered and signed rental agreement.
• Proof of the security deposit payment, such as a bank statement or a signed receipt from the landlord.
• Records of all communication with the landlord regarding the deposit.
• A copy of the legal notice sent to the landlord and the postal receipts proving its dispatch and delivery.

How long will the investigation take?

The timeline can vary significantly. If the police file an FIR, the investigation could take a few months. A civil suit for the recovery of money is a longer process. It can take anywhere from a year to several years to get a final judgment from the court, depending on the complexity of the case and the workload of the judiciary. However, the initial step of sending a legal notice often resolves the issue within 30-60 days.

Advocate Sudhir Rao, Supreme Court of India