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

A common issue faced by tenants across India is the unlawful withholding of the security deposit by landlords. Let’s consider the case of Mr. Rohan Verma. He was relocating to the city of Aryavarta for a new job and was in urgent need of accommodation. He found a flat owned by Mrs. Sunita Desai and, based on a verbal understanding, transferred a security deposit of ₹90,000 on June 5th. He moved into the apartment on June 20th. However, upon moving in, he found the condition of the flat to be completely unsatisfactory and not as promised. He decided to vacate the premises within a week.

Despite there being no signed rental agreement, Mrs. Desai is now refusing to return the ₹90,000 deposit immediately. She claims she will return it “around July 15th” or only after she secures a new tenant for the property. Mr. Verma, having just moved to a new city, is in dire need of these funds. This situation raises important legal questions about the rights of a tenant and the obligations of a landlord, especially when a formal agreement is absent.

Advice in such cases

• Document Everything: Even with a verbal agreement, it is crucial to have a record. Keep screenshots of any chats (WhatsApp, SMS), emails, and most importantly, the proof of the bank transaction for the deposit payment.
• Send a Formal Demand: The first formal step is to send a clear and concise written communication to the landlord demanding the immediate return of your security deposit. Mention a specific deadline for the return of the money.
• 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

While the absence of a written agreement makes things complex, the tenancy is still governed by Indian law. The key legal provisions are:

• The Transfer of Property Act, 1882: This Act governs leases and tenancies. Even a verbal agreement, coupled with payment of rent/deposit and possession of the property, can establish a landlord-tenant relationship.
• The Indian Contract Act, 1872: A verbal agreement is a valid contract. The landlord’s failure to return the deposit is a breach of this verbal contract.
• Bharatiya Nyaya Sanhita (BNS), 2023: If the landlord had a dishonest intention from the beginning or is wrongfully retaining the money entrusted to them, it can amount to a criminal offense. Section 316 of the BNS, which deals with Criminal Breach of Trust, could be applicable.
• State-Specific Tenancy Acts: Many states have their own tenancy laws, often based on the Model Tenancy Act, 2021, which clearly define the rules regarding security deposits, their limits, and the timeline for their return after the tenant vacates.

If you are the complainant

• Gather Evidence: Compile all proofs of payment, communication with the landlord, and any witness information.
• Send a Legal Notice: Have a lawyer draft and send a strong legal notice to the landlord. This notice will outline your claim, cite the relevant laws, and state the legal consequences of non-compliance, including initiating civil and criminal proceedings.
• File a Police Complaint: You can approach the local police station and file a complaint for Criminal Breach of Trust under Section 316 of the BNS.
• File a Civil Suit: A suit for recovery of money can be filed in the appropriate civil court. This is a direct legal action to get your money back along with interest and legal costs.
• 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

• Stay Calm and Act Methodically: Avoid getting into heated arguments or confrontations with the landlord, as this can weaken your position. All communication should be formal and documented.
• Preserve All Records: Do not delete any text messages, emails, or transaction details related to the tenancy. This is your primary evidence.
• Understand Your Rights: The landlord cannot arbitrarily hold your deposit hostage. The deposit is for covering damages to the property or unpaid rent, not for covering their losses while they find a new tenant, unless specifically agreed upon.
• 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

Often, the police may initially perceive such matters as purely civil disputes and might be hesitant to file a First Information Report (FIR). They may advise you to settle the matter amicably or to approach the civil court. However, you must insist that wrongful retention of a security deposit amounts to a criminal breach of trust. If your lawyer accompanies you or if you present a well-drafted complaint clearly making out the ingredients of a criminal offense, the police are more likely to register an FIR under Section 316 of the BNS and begin an investigation.

FAQs people normally have

What evidence is required?

• Proof of Payment: A bank statement, UPI transaction screenshot, or any receipt showing the transfer of the deposit amount to the landlord’s account is the most critical piece of evidence.
• Communication Records: Any WhatsApp chats, SMS messages, or emails where the tenancy, deposit, rent, or moving out is discussed.
• Witness Testimony: If a friend, colleague, or broker was present during the discussions or knows about the tenancy, their statement can be valuable.
• Copy of the Legal Notice: The notice sent by your lawyer and its postal receipt serve as proof that you formally demanded the money back before initiating further legal action.

How long will the investigation take?

The timeline can vary significantly. A legal notice usually gives the other party 15 or 30 days to comply. Often, this is enough to resolve the matter. If a police complaint is filed, the investigation can take a few weeks to several months. A civil suit for recovery is a longer process and can take anywhere from a few months to over a year to reach a conclusion, depending on the court’s schedule and the complexity of the case.

Advocate Sudhir Rao, Supreme Court of India