Hi I have a franchise store of popular retail chain in Delhi with lock-in period of 3 years and term agreement of 5 years. It is clearly mentioned in the agreement that no one has the right to terminate before the lock-in period. As per the terms of the agreement, franchisor will do the rent agreement directly with the landlord and will pay the rent as mutually fixed between franchisor and landlord. The franchisor as lessee also has lock-in period of 3 years with the landlord. Stocks are supplied by the company on their own GST against our deposited refundable security. As per the agreement, on termination company will pick up their stocks and will refund our security back. It is just one year of store operations and now the franchisor company is sold and has been acquired by new company. And the new company is not honouring the existing agreement and verbally saying that it stands null and void and is trying to impose a new agreement on us and the terms of which are not acceptable to us. They have deliberately withhold our payouts and the rent of the landlord is also not cleared from last 6 months. The new company has served the vacation notice to the landlord to vacate the store by 31st august. After receiving the vacation notice and Due to non receipt of his rent, landlord has locked the premises as out of two locks, one lock is of landlord and other lock is of mine. And instead of going lawfully against the company, he is threatening us that he will break open the locks and sell out all stocks and all our developed interiors/fitouts to recover his rent. Company is now not responding to our calls/mails and not clearing the rentals and the same dispute is with all the franchisees across India and everyone is depressed because of this. What legal remedies do we have ? What can we do to refrain the landlord to do such coercive act ? What all legal remedies are available to the landlord ? If he do break open the locks , can we take any action against him ? Pls help.
Issue legal notice to comply with terms of agreement , pay Your outstanding dues , rent to landlord
2) if payment is not made sue the company to recover your dues and loss suffered by you
3) if there is arbitration clause in contract invoke the said clause
As old company has been acquired by the new company, they are bound to to honour the existing agreements between the old company and the franchisees. The cannot coerce you into signing A new agreement where as the old one is still in force.
Also, the landlord cannot put his own lock or n take out the stock from the promises to recover the rent as it is illegal. The only thing a landlord can do is file a case in court for recovery of his rent.
You can obtain a stay order from civil Court in order to refrain the landlord from locking out from premises. Also, a suit of specific performance can be filed against the company in order to to get them to enforce as per the contents of the earlier agreement only.
1. Even if rent is not paid the landlord can not force open the leasehold property and sell goods to recover arrears rent. Therefore without delay lodge complaint of criminal intimidation and extortion.
2. The new company is bound by the terms of the franchise agreement done with you. So refer to the terms of the agreement to find out damage clause if company breaches lock in period. On that basis you can file civil suit to recover damages.
3. If the landlord breaks open the lock he can be criminally prosecuted.
Yes,Definitely all of you have equal rights to perform the Contract entered into amongst you all.
Landlord may approach Court for eviction procedures against you, franchisor and New Company for non-payment of rent for the last six months .
You as franchisee may go against franchisor ,land lord and new Company under section 34 and 38 for suit of permanent injunction and declaration of title over the stock-in-trade.
Under any circumstances no one has right to breach the agreement entered into amongst the parties. Solution is Court proceedings only.
No break open lock of premises without due process of law.
- Since a new company came into existence after purchasing the same , then the liabilities and assets also transferred in the account of new company , and the said company is bond to honour the contracts and agreements dully entered by the predecessor company.
- If the new company is refusing to honour the agreement dully entered by you , then it will be treated as breach of contract on the part of new company.
- You can send a legal notice to the company for the same , and further can also file a case before the court.
- If he break open the locks , then you can file a complaint against the landlord for the offence of theft and breach of trust.
- Further , if the landlord creating trouble for you , then you can file a suit for Permanent Injunction against him for restrain him to dispossess you .
Dear sir,
To understand your rights against the new company we would have to read both agreements(between you and old company, and between the old company and new company). It is only then that the exact position would get clarified. It is advisable that you get in touch with me or any other Delhi based lawyer and seek a detailed consultation.
As far as your landlord is concerned, he cannot forcefully evict you or sell your stock. However, please be informed that the landlord has a right to proceed against you for the recovery of rent and file a suit for eviction.
If he breaks open the lock you have remedies available both in civil law and criminal law. You can file a suit for recovery of possession and a criminal complaint for trespass and mischief.
Hope this answer helps.
Best wishes.
Eventually in this case no legal remedies available to is between the franchise company and the landlords you are using the property on behalf of franchise who have not cleared the rent for last 6 months as per the lock in period of the agreement the landlord have the right to receive the rent for the three years as per the terms of contract and in case of any delay the interest thereon and for that reason he has locked the property in case you are agreed and you have any right on the premises then you have to walk to the court to get the lock open
File a police complaint against them under 420IPC
and serve them with a legal notice following the specific performance suit against them for clearing the dues
New company to bound by the old agreement and all other liabilities attach to it. File suit of specific performance in court and to recover due amount.
You are under lease and can break the lock. Landlord cannot evict you forcefully and only by order of court. You can file FIR against the landlord for criminal trespass and theft.
File suit of specific performance of agreement against company.
1. You should serve them a legal notice through your advocate for breach of contract and claiming compensation for loss suffered due to this breach.
2. If they doesnt respond to legal notice or refuse to compensate then file suit under Indian contract act for claiming compensation due loss suffered.
3. Yes you can take action against landlord if breaks the lock. You can lodge FIR against him for theft by breaking the lock.
If he is not going lawful you need to go lawful. You can't just vacate his premises without paying rent. It's the duty of the tenant to clear the rent. If you want your stocks you need to approach the court assuring injunction for not to damage your products and you will clear the rent
You file a suit for permanent injunction against the franchiser and also the landlord asking for different reliefs of injunction orders against both in the same suit.
You can demand the franchiser the return of security deposit amount as well as to pay the arrears of rent to the landlord as per the agreement.
You can seek injunction against the landlord from causing any damage to your proeprty and also to enter into the premises till the disposal of the suit and also to remove his lock from your shop.
If the landlord breaks open you lock you can give a complaint against the landlord for theft of your valuables kept in the shop
Dear Sir/Madam,
After buying the previous company, the new company is bound to honour all the agreements or contracts done earlier. Here the company as well as the landlord, both, are at the fault and you are suggested to serve the legal notice and then file the case against both of them to save your rights and interests.
Anything done through coercion threats and other tactics is illegal and is an offence.
File an fir an obtain a temporary injunction against him from the city civil court.
Dear Sir/ Madam
Kindly share the agreement copy and then with a proper notice take steps .
issue a legal notice through an advocate and file a criminal case for cheating and also file a case for recovery of security deposit . You may also claim from the company the amount you shall spend on availing the services of your lawyer.
Dear querist,
All the rights and obligations whether it is of the tenant or landlord or the frachisee is determinant on the agreements which was executed by you three. So, when the franchise has been acquired by the other company they are liable to follow the agreement which was executed before the execution. perusing the gacts as per you query i answer your qeury accordingly:-
1. legal remedies- Serving the legal notice on the landlord, franchisor.
2. what can we do to refrain the landlord to do such coercive act?
sending a legal notice may suffice your requirement to stop the landlord. If not, a case will be filed against the landlord and the franchisee.
3. remedies is the same as above mentioned, as he will also be made as a party to the suit.
4. HE CANT! If he do, that will be a charge of tresspass and theft, it will be mentioned in the notice.
In case you require my assistance to the matter, i can be contacted on
