Issue legal notice to vacate premises on account of failure to pay re take 

2) if he refuses to vacate on expiry of notice period file eviction suit against tenant to vacate premises and claim arrears of rent 

3) rent control act in your state may contain a clause that all disputes have to go to small causes court 

4) in such a case arbitration clause may not be enforceable 

5) you can claim penal rent if there is such a clause in your agreement 

Eviction proceedings will be better option that arbitration. But Id arbitration clause is mentioned in agreement then civil court jurisdiction will be barred to entertain the eviction proceedings. If any local state law helps you exclusively for eviction like approaching any competent authority specifically apportioned for evict ion then it will have upper hand above arbitration jurisdiction.

Commercial Tenant Not Paying Rent (Sangareddy, Telangana)

1. Serve a formal legal notice immediately through a local lawyer demanding payment and warning eviction.

2. Arbitration clause is valid even in an unregistered lease but eviction likely requires court.

3. Arbitration can be faster, but enforcement often goes through district civil court.

4. File eviction or enforcement suit in the Sangareddy district civil court.

5. Courts may order tenant to pay rent during proceedings based on lease terms and evidence.

6. Accepting large cash rent without taxes can lead to penalties—be cautious.

7. Consider amicable settlement; use local lawyer; keep written records; avoid self-help eviction.

I understand this is a highly stressful and frustrating situation for you. Dealing with a defaulting tenant, especially from overseas, can be challenging. Here's a detailed breakdown of your options and advice:

1. How Should You Handle This Situation?

Given the tenant's blatant disregard for the lease terms and your repeated attempts to collect rent, you need to take a firm and legal approach. Do not resort to self-help measures like attempting to forcefully re-enter the property, as this could lead to legal complications for you.

Here's a strategic approach:

• Document Everything: Continue to meticulously document all communications (WhatsApp messages, call logs, emails), payment records, and the outstanding balance. This will be crucial evidence.

• Formal Legal Notice: This is your immediate next step. A well-drafted legal notice from an Indian lawyer specializing in property law will signal your seriousness and put the tenant on formal notice of the breach of contract.

• Cease Informal Communication: While the WhatsApp group is useful for documentation, avoid engaging in further informal discussions or relying on your parents/in-laws to chase him. All communication should now be formal and through your legal representative.

• Prepare for Legal Action: Understand that legal action will likely be necessary. The goal is to either compel him to pay and vacate or to legally evict him.

2. Is the Arbitration Clause Enforceable on an Unregistered Lease Agreement? How Long Does Eviction Process Take via Arbitration?

This is a critical point.

• Enforceability of Arbitration Clause on Unregistered Lease: An unregistered lease agreement for a period exceeding one year is not admissible as evidence in court for matters related to the property itself (like ownership or eviction based on the lease's terms, including the arbitration clause) as per Section 49 of the Registration Act, 1908.

  • However, an unregistered lease agreement can be used as collateral evidence to prove the existence of a tenancy and the terms of the tenancy, especially for the purpose of claiming rent arrears.

  • Regarding the arbitration clause specifically: While the lease itself might be inadmissible for certain purposes, the arbitration agreement within it might still be enforceable if it is considered an independent agreement. The Supreme Court of India has, in some judgments, held that an unregistered instrument containing an arbitration clause can be referred to arbitration if the arbitration clause is considered a distinct agreement.

  • However, for eviction proceedings, which deal with the transfer of immovable property, the general consensus is that an unregistered lease agreement for more than one year cannot form the basis of an eviction suit based on its terms. You would likely have to prove a month-to-month tenancy (implied tenancy) under the Transfer of Property Act, 1882, rather than rely on the specific terms of the unregistered lease for eviction.

  • Therefore, relying solely on the arbitration clause for eviction might be problematic and could be challenged by the tenant.

• How Long Does Eviction Process Take via Arbitration?

  • Arbitration is generally considered faster than traditional court litigation, but it's not instantaneous.

  • Process: If the arbitration clause is deemed enforceable for your case, you would typically serve a notice invoking arbitration. If the tenant doesn't agree to an arbitrator, you'd apply to the High Court (or a designated court) to appoint one. Once an arbitrator is appointed, proceedings begin, evidence is presented, and an award is passed.

  • Timeline: An arbitration proceeding for a dispute of this nature could still take anywhere from 6 months to 2 years, or even more, depending on the complexity, the cooperation of the parties, and the arbitrator's schedule. If the tenant challenges the award, it can go to court, further prolonging the process.

  • Enforcement: Even if you get an arbitral award for eviction, you would still need to apply to a civil court to enforce that award, which adds another layer to the process.

3. Is Arbitration a Better Option, or Should I Consider a Civil Suit in a Local Court?

Given the issues with the unregistered lease and the need for eviction, a civil suit in a local court is generally a more robust and advisable option for eviction.

• Advantages of Civil Suit for Eviction:

  • Clearer Jurisdiction: Courts have clear jurisdiction over eviction matters.

  • Enforceability: A court order for eviction is directly enforceable.

  • Comprehensive Relief: A court can grant various reliefs, including eviction, recovery of unpaid rent, and mesne profits (damages for wrongful possession).

  • Addressing Unregistered Lease: The court can recognize an implied monthly tenancy if the written agreement is unregistered, and proceed with eviction based on that.

• Disadvantages of Arbitration for Eviction:

  • Admissibility Issues: As discussed, the unregistered lease's terms, including the arbitration clause, might face admissibility challenges for an eviction claim.

  • Enforcement Loop: Even with an arbitral award, you'll still need to approach a civil court for enforcement of the eviction part of the award.

  • Tenant's Resistance: A savvy tenant (especially with "political connections") might strategically use the arbitration clause to delay proceedings by challenging its enforceability or the arbitrator's jurisdiction, forcing you back to court anyway.

Recommendation: Lean towards a civil suit for eviction, but first, serve a strong legal notice. The legal notice can explicitly state your intent to terminate the tenancy and initiate legal proceedings for eviction and recovery of dues.

4. Where Can I File Eviction Suit?

You would file the eviction suit in the Civil Court of appropriate jurisdiction in Sangareddy, Telangana.

• Jurisdiction: This will typically be the Court of Senior Civil Judge or the Principal Junior Civil Judge, depending on the pecuniary (monetary) value of the suit (which includes the value of the property or the accumulated rent arrears and mesne profits).

• Territorial Jurisdiction: Since the property is in Sangareddy, the court in Sangareddy would have territorial jurisdiction.

5. Will the Judge Order Him to Pay the Actual Rent as Per the Agreement During the Pendency of the Suit, or Will the Court Decide a New Rental Amount?

This is a crucial point that can help mitigate your financial losses during the lengthy legal process.

• Order under Order XV-A of the Civil Procedure Code (CPC) (for states where applicable) or similar provisions: Many states in India, including Telangana, have provisions in their Civil Procedure Code (or specific Rent Control Acts, though likely not applicable here as it's commercial and unregistered) that allow the court to direct the tenant to deposit an amount equivalent to the last paid rent or the agreed rent during the pendency of the eviction suit. This is often referred to as "mesne profits" or "occupation charges" or "ad-interim rent".

  • Telangana Specific: While specific rules might vary slightly, generally, courts have the power to direct a tenant to pay "mesne profits" or "occupation charges" during the pendency of the suit. This is a common practice to prevent landlords from suffering undue hardship.

• Court's Discretion:

  • The court will likely consider the rent amount stated in your (unregistered) lease agreement as evidence of the agreed-upon rent.

  • It is highly probable that the judge will order him to pay the actual rent as per the agreement during the pendency of the suit. The court's aim is to ensure that the landlord is not deprived of income while the case is ongoing.

  • The court may also consider the 10% annual increase clause.

  • If there's a significant dispute about the "actual" rent or if the tenant claims the agreed rent is excessive, the court might, in rare circumstances, determine a reasonable occupational charge. However, in most cases where an agreement exists, even if unregistered, it serves as strong evidence of the agreed rent.

• Strategy: When you file your suit, you should specifically include a prayer (request) for an interim order directing the tenant to pay the monthly rent as per the agreement (with the 10% annual increase) into the court or directly to you during the pendency of the suit. This is typically done by filing an interlocutory application (IA) under relevant provisions (e.g., Section 151 CPC read with Order XXXIX, Rules 1 & 2 or specific state amendments/rent control provisions for interim relief).

If you get monthly rent as per the lease agreement at the court's direction, it significantly reduces your financial burden during the process, making a civil suit more bearable.

6. I've Not Paid Any Taxes As He Only Paid Cash Rental So Far. Will This Have Any Bearing?

Yes, this could have a bearing, especially if the matter goes to court or is scrutinized by tax authorities.

• Income Tax: All rental income is taxable. Not declaring rental income and receiving cash payments without proper accounting is a violation of income tax laws.

• GST: If your total rental income from all properties exceeds the GST threshold (currently Rs. 20 lakhs per annum for services in most cases), you might also be liable for GST on commercial rent.

• Legal Proceedings:

  • Cross-Examination: In court, the tenant's lawyer might try to use your non-payment of taxes against you to discredit your claim or argue that you have unclean hands. This could be an attempt to divert attention or put pressure on you.

  • Mitigation: If this issue arises, you might have to explain your position. It's advisable to consult with a tax advisor alongside your legal counsel. You might consider disclosing past income and paying the due taxes with penalties, if any, to regularize your financial position, although this is a separate matter from the eviction.

  • Impact on Eviction: While tax evasion is a serious matter, it typically does not directly negate your right to evict a defaulting tenant. The primary focus of the eviction suit will be the breach of the lease agreement and non-payment of rent. However, it can complicate matters and open up another avenue for the tenant to attack your credibility.

Recommendation: Consult a tax professional immediately to understand your tax liabilities and explore options for rectification. This can help you prepare for any potential challenges in court.

7. Any Other Suggestions to Get the Property Back Soonest?

While "soonest" in legal matters is relative, here are some strategies to expedite the process as much as possible:

• Strong Legal Notice: A well-drafted and stern legal notice from a reputable lawyer is crucial. It should:

  • Clearly state the outstanding rent amount with calculations.

  • Demand immediate payment within a short timeframe (e.g., 7 or 15 days).

  • Unequivocally state that the lease agreement stands terminated due to the breach (non-payment of rent for consecutive months, as per your clause).

  • Demand vacant possession of the property.

  • State your intent to initiate legal proceedings (civil suit for eviction and recovery of dues, including mesne profits) if demands are not met.

  • Explicitly reserve your right to claim damages for wrongful possession (mesne profits) from the date of termination until actual vacation.

• Competent Legal Counsel: This is paramount. Hire a lawyer in Sangareddy/Hyderabad who specializes in property law and has a strong track record. A local lawyer will be familiar with the courts, procedures, and potentially the local influences.

• Interlocutory Applications (IAs): As mentioned, file an IA for direction to pay rent/mesne profits during the pendency of the suit. Also, consider an IA for an injunction to prevent the tenant from making further structural changes or subletting without permission.

• Continuous Follow-Up with Lawyer: Regularly follow up with your lawyer to ensure prompt filing of documents, attending hearings, and moving the case forward.

• Evidence Collection: Gather all evidence:

  • Your unregistered lease agreement.

  • WhatsApp conversations (take screenshots with dates and times).

  • Records of rent payments (or lack thereof).

  • Bank statements showing no rent deposits.

  • Any other correspondence.

• Pleadings: Ensure your plaint is meticulously drafted, covering all facts, grounds for eviction, and prayers for relief (eviction, arrears, mesne profits, costs).

• Explore Settlement (with caution): While you've had negative experiences, a formal legal notice can sometimes prompt the tenant to negotiate. If he offers a settlement, ensure it's a "full and final" settlement that includes vacating the property and clearing all dues, and have it legally documented. However, be prepared for him to prolong this. Given his behavior, direct negotiation is unlikely to be productive without legal pressure.

• Consider Mediation/Lok Adalat (if offered by court): During the court process, judges often encourage mediation or refer cases to Lok Adalats (people's courts) for amicable settlement. If you are offered this, it could be a faster way to resolve if the tenant genuinely wants to settle, but don't count on it given his past behavior.

• Public Notice (Rare, but possible): In some extreme cases of a defaulting tenant with an unregistered agreement, and if the property is being misused or if there's a risk of third-party claims, a public notice in a local newspaper about the termination of the lease and your ownership might be considered, but this should only be done on the strict advice of your lawyer.

Regarding your ST Community status: While some laws provide specific protections or reservations for Scheduled Tribes, there aren't specific provisions in general landlord-tenant or property law that would directly expedite an eviction process solely based on your ST community status in a commercial tenancy context. The legal process for eviction would largely remain the same as for any other landlord. However, your lawyer should be aware of your status, as it might be relevant if there are any specific state-level land transfer regulations or if the case takes an unexpected turn regarding land ownership, which is unlikely here.

1. Since the default in rental payment is wilful, you issue a notice to him to pay the arrears of rental amount and to vacate the premises since he has committed breach of rental agreement conditions. 

2. The arbitration clause need not be invoked if he has defaulted the monthly rental payment for more than two months, hence do not adopt the route of arbitration to evict him you may better file an eviction suit under the provisions of  Transfer of Property Act because it is an unregistered rental agreement. 

3. An eviction suit before the civil court would be the better option before you even though it may be time consuming.

4. In a civil court within the jurisdiction of the property location.

5. You can include a prayer to continue the payment of monthly rental amount till the disposal of the suit.

6. The question of payment of taxes will not arise in the eviction suit, the tax evasion is a different subject. Actually you were not supposed to receive an amount beyond Rs. 20,000 in cash.

7. You may consult a local advocate and proceed as per the suggestions that would be feasible.  

1. How should I handle this situation?
Given the tenant’s repeated defaults, blatant disregard for communication, and failure to comply with agreed terms, you should immediately issue a legal notice for eviction and recovery of arrears. Your informal efforts have clearly failed, and the tenant is exploiting your absence from India. A professionally drafted notice sent through a local advocate will demonstrate seriousness and may pressure the tenant to negotiate or vacate. At the same time, you should start preparing for legal proceedings, including collecting proof of unpaid rent, communication records (WhatsApp messages, calls), and a copy of the lease deed.

2. Is the arbitration clause enforceable in an unregistered lease agreement? How long does eviction take via arbitration?
Even though your lease agreement is unregistered, the arbitration clause may still be enforceable under Section 7 of the Arbitration and Conciliation Act, 1996, provided it is in writing and signed by both parties. Courts have held that arbitration clauses in unregistered lease agreements are valid for the purpose of dispute resolution, although the agreement may not be admissible for enforcing certain lease terms (like term/duration/rent) unless properly stamped. Arbitration can be faster than court litigation, typically 6–12 months, but the enforcement of the arbitral award (if resisted) still requires a petition in court.

3. Is arbitration a better option, or should I consider a civil suit in a local court?
If you believe arbitration will be faster, confidential, and less influenced by local politics, it may be worth initiating it, especially since your lease has an arbitration clause. However, for actual physical possession, arbitrators cannot pass binding possession orders – only civil courts can. So, while arbitration may help with rent recovery, to evict the tenant, a suit for possession under the Transfer of Property Act will be required. A combined approach issuing legal notice, invoking arbitration for rent recovery, and filing a civil suit for possession may be the most effective route.

4. Where can I file the eviction suit?
The eviction suit will lie before the Civil Court in Sangareddy, where the property is situated. Since this is a commercial tenancy, local rent control laws may not apply, especially if the monthly rent exceeds ₹50,000 (as per Telangana Rent Control Act’s exemption), so you can proceed under Section 106 of the Transfer of Property Act by filing a civil suit for possession, mesne profits, and damages.

5. Will the judge order him to pay the actual rent as per the agreement during the pendency of the suit?
Yes, in many cases, courts grant interim relief in the form of "use and occupation charges" during the pendency of the suit. Courts often direct the tenant to pay rent at contractual rates or market rates, whichever is higher, especially where the default is undisputed. You must press for such an interim order early in the suit to reduce the financial burden during litigation.

6. Will not paying tax on rental income have any bearing on my claim?
While your non-disclosure of rent income and non-payment of tax may raise income tax issues, it will not affect your right to receive rent or recover possession. However, be prepared that the tenant may bring this up as a defense to undermine your credibility. You may consider rectifying your tax filings voluntarily, especially if you seek legal redress, to avoid future scrutiny.

7. Other suggestions to get the property back soonest:

• Immediately send a legal notice through a local advocate demanding payment of arrears and vacating the premises.

• File a civil suit for possession and mesne profits in the jurisdictional civil court.

• Simultaneously, invoke the arbitration clause for recovery of rent, which may increase pressure.

• Since the lease contains a re-entry clause for two months’ default, that strengthens your civil case, but don't take possession unilaterally it may be treated as illegal eviction.

• If the tenant is politically connected, avoid any confrontation; let the courts handle it to maintain your legal standing.

• If the tenant makes part payment, do not renew or validate the agreement use it only toward arrears.

• Appoint a Power of Attorney holder in India, possibly a trusted family member or lawyer, to handle court appearances and filing.

. I understand the stress caused by irregular and now defaulted rent payments and your concern about the tenant’s influence and the unregistered lease. Here is a detailed response to your questions and suggestions on how best to proceed.

Start by sending a formal legal notice to the tenant through a lawyer. This notice should demand immediate payment of outstanding rent, remind the tenant of lease terms (especially the clause allowing you to take possession after 2 months’ default), and state your intention to initiate legal proceedings if the dues are not cleared promptly. Avoid any emotional exchanges or confrontations. Maintain all communications in writing (email, WhatsApp, legal notices) to build evidence. Keep records of all reminders, notices, and tenant responses (or lack thereof). This documentation strengthens your position. Since you are overseas, appoint a local lawyer or agent to monitor the situation and act on your behalf. Consider engaging a reputed local advocate familiar with landlord-tenant disputes in Telangana.

In general, under Indian law, a lease agreement for immovable property for more than 12 months is mandatorily registered under the Registration Act, 1908. An unregistered lease of more than 12 months is valid but not enforceable (i.e., cannot be admitted as evidence in court). Since you have a 5-year lease, the unregistered lease is problematic. Arbitration clauses are contractual, but if the lease is unregistered and for more than 12 months, courts typically will not enforce arbitration clauses based on such agreements. The tenant may challenge arbitration jurisdiction. Even if arbitration is invoked and upheld, it tends to be time-consuming and costly, often taking several months to years depending on cooperation. Thus, relying solely on arbitration in your case is risky.

Given your unregistered lease exceeding one year, a civil suit for eviction and recovery of arrears in the local civil court would be more straightforward. You can rely on possession rights and rent claims under general civil and rent laws. Arbitration might delay your rights; a civil court can issue an interim injunction or order possession if rent is unpaid. You can file for summary eviction and recovery of rent arrears under the Telangana Premises Tenancy Act, 1970, which governs tenancy disputes there.

File the eviction suit in the Civil Court or Rent Control Court having jurisdiction over Sangareddy. The suit typically includes eviction based on rent default, recovery of arrears, and possession claim as per lease terms.

Courts generally are guided by the lease agreement regarding monthly rent if it is a legal agreement and reflects the market rent. Since your lease is unregistered, the court might examine whether the rent agreed upon was genuine and fair. Given the tenant’s high investment and commercial use, courts often order payment of rent as per agreement during pendency unless strong contrary evidence exists. Courts in Telangana can allow enhanced rent if market rates substantiate it but this is less common mid-litigation. You can request the court for interim rent to be paid monthly during the suit based on existing lease terms.

Tenant paying rent in cash and you not paying tax on rental income is a separate compliance matter. Legal proceedings for eviction or rent recovery generally do not depend on whether you paid income tax. However, you should declare and pay tax on rental income to avoid issues with income tax authorities. Non-compliance does not invalidate your landlord rights but may raise concerns in final assessments or court scrutiny. Maintaining transparent accounts and paying applicable taxes is advisable going forward.

Clearly communicate insistence on compliance with rent clauses and consequences of default. If the tenant persists, the court can issue eviction orders and attach tenant’s assets, though this takes time. Explore mediation or conciliation to reach a settlement. Use power of attorney or local agents to monitor the premises and prevent unauthorized use. Keep issuing periodic demand notices and follow-ups, including threats of legal action. Record conversations or collect proof of tenant and his brother’s admissions on arrears and refusal to pay. Seek advice on additional commercial rent recovery provisions under Telangana law. Consider alternative dispute forums only if speedier resolution and enforceability are assured. Protect your interests by ensuring the property is insured or safeguarded during litigation.

In summary, serve a formal legal notice demanding rent and possession, file eviction and recovery suit in civil or rent court in Sangareddy, arbitration clause is unlikely enforceable due to unregistered lease, court likely orders payment of rent as per agreement during suit, start paying taxes on rental income promptly, engage a strong local advocate for enforcement, and keep documentation professional.

If you want, I can assist in drafting your legal notice, suggest the suit drafting, recommend local counsel, or help with strategizing next steps for quick recovery and enforcement. Feel free to contact me for professional consultation tailored to your case.

Issue a formal legal notice demanding rent and invoking the possession clause.

The arbitration clause is preferable and enforceable despite the unregistered lease, seek interim relief for rent payment.

Hi,

Answers:

1. Firstly, you have to issue legal notice to the tenant through your counsel for arrears (including interest if any & future amounts). Also, include to vacate him forthwith as per terms of the agreement. 

2 to 7. Though there is a clause pertaining to arbitration there are many judgments of the Hon'ble Supreme Court with regard to landlord-tenancy cases and arbitration proceedings in these types of cases. 

You can file a suit for eviction along with relief seeking arrears.

As mentioned, only 14 months are remaining out of 5 years lease, after completion of 14 months you can ask him to vacate the premises by giving prior notice i.e. may be 11th month to vacate on 14th month. 

As per my research and experience, you can follow the above suggestions by engaging a lawyer.