Order Form for Purchase Of Booklet
(A Solution to the problems created by black money)


    The black money (pugree) always created more problems than solution. Though approximately more than Rs.70,000/- crores were received and paid during the period of 1947 to 1997 within 50 years or thereabout after commencement of Bombay Rent Act 1947, however no part of the said amount could be utilised for the purpose of construction of new buildings or for repairs or reconstruction of old buildings. As no new building were constructed, there was shortage of housing and as old and deliberated buildings were not repaired and reconstructed there were house collapse resulting deaths of innocent person.  This has resulted in creating artificial shortage of housing, building collapses and more disputes between the landlords and tenants. Under the Bombay Rent Act 1947 rent was frozen and premium or deposit was prohibited which gave rise to illegal premium. Some of the tenants were forcibly dispossessed and/or false suits were filed against them only to receive the unreasonable amount by force in the form of pugaree by harassing them.

Preface by Shri. Mahabaleshwar Morje
The objects and purpose of ligalisation of Pugree.
Report of Joint Select Committee on rent act
Advantages of Legalisation
New Sec. 56 Right of Tenants and Landlords to receive premium
Need of Guidance
Approximate Percentage or Ratio  Pugree
Stamp Duty on Agreement  of Leave and Licence
Stamp Duty on Tenancy Agreement
Article 5 (g-d) of Schedule 1 of Bombay Stamp Act 1958
Income Tax
Whether Landlord can refuse to transfer Tenancy?
Benefit to all 
Questions & Answers
Stamp Duty rates for residential premises
Market Value of properties for the year 2000
Agreement for payment pugaree (Premium)
Notification regarding table of fees for registration
The short notes on Income Tax on immoveble property by Mr. Ghia

P  R  E  F  A  C  E

    The Pugree is reward for use and enjoyment of premises.  This reward depends upon length of the period used and occupied by the occupants/tenants/subtenants/licensee in the premises.

    As the interest is reward for keeping the money into the Bank in a Saving Account or Fixed Deposit and this reward is paid on the basis of length of the period.  Similarly the Provident Fund and Gratuity is paid on the basis of length of the period and the services rendered almost similar to the case in the case of Pugree.

    The Bombay Rent Act came into force on 13th February 1947 and the prices of the property, land and building went up many times in respect of the land and quantum of the premium. 

    Originally when the joint select committee was constituted under the Chairmanship of Shri. Chaganrao Bhujbal, then the state Minister for Housing, it has made recommendation for legalisation  Of Pugree and for other amendments and such registration of tenancy agreement, transfer of rent receipt in the name of living person for reasonable increase in payment of rent are approved and subsequently all the Ministers supported this amendment. 

    Shri. Rohidas Patil the present Minister for Housing is taking the necessary steps to implement and enforce the provision of new act. However the efforts made by Shri. Raj Purohit the Minister for Housing are very important and worth appreciated, which were supported by Shri. Sureshdada Jain then the Minister for Housing.

    The lawyers are supposed to be the devoted and dedicated Volunteers of the social and economic change and respectable Officers of the Court of law i.e. Temple of Justice. They should help the Government to enforce and implement the law and assist the law court to avoid dispute on technicality and loopholes.  With the help of law we must be able to achieve and fulfil the object of the law to build prosperous Maharashtra and India.

    I am grateful to Hon’ble Shri. Ramrao Adik, the former Deputy Chief Minister and Shri. Y.P. Trivedi the Senior Advocate of Income Tax, encourage to write the small note.  I have included a brief note prepared by Mr. Vimal Punamiya, the Income Tax Expert and by Shri. T.J. Ghia, Chartered Accountant, in the small booklet.

    Those who have any suggestions to make regarding an enforcement and implementation of the law are requested to do so in writing, so that utility of the book can be improved.

    The small booklet has it’s own limitation, however it is published only with a view to educate the people about their rights and fulfil the object of law.

Mahabaleshwar Morje
15th August 2000

    The original object and purpose of preventing pugaree i.e. unlawful charges though was very good, It was done to protect poor tenants and workers working in Textile Mill and other Industries, who could not pay increased rent according to market price. However, subsequently it was found that the remedy was worst than  the disease. Finally after careful study, the Government of Maharashtra was required to remove Section 18 and 19 which were existing under the Bombay Rent Act of 1947 and replaced it by new Section 56 of the New Maharashtra Rent Control Act, 1999.

    In order to over come problems and difficulties arising out of Bombay Rent Act 1947including  the problem of receipt and payment of pugaree, a joint select committee was appointed under the Chairmanship of Mr.Chaganrao Bhujbal, then the Minister  for  housing  in  the  year  1973. The committee heard views of the various representation of Property Owners Association, Landlord Association, the representative of Indian members association, the Tenants association. Subsequently, there was political change of Government.  Even then Shri Sureshdada Jain, The Minister for housing and Shri Raj Purohit, The State Minister for housing supported it whole/heartedly.

    Most of the members of Joint Select Committee, particularly those from the Mumbai City and suburbs debated on the question of Premium, the amount paid in consideration for letting rental premises. In view of the existing prohibition for charging of such premium on transactions that take place while letting the rental premises involving huge amount of black money, are having
serious ramifications endangering real estate market. The Committee, therefore, gave serious thought to this issue. The Committee observed that the "premium" transactions take place (1) at the time of granting tenancy, (2) at the time of renewal of lease and (3) at the time of transfer of tenancy rights to other person. Bombay Rent Act 1947 came into force on 13th February 1947. It was noted that more than Rs.70,000/- crores have been paid or received as "Premium" in the city of Mumbai and suburbs. But it could not be used for any official purpose as it is not legal. As a result of the landlords were deprived of premium or deposit which could have been used as capital for construction of new buildings and for repairs and reconstruction of the old and deliberated buildings and the landlords could have got reasonable increase in the form of increase in rent. At the same time, Government was also deprived of lawful revenue of crores of rupees by way of income tax, and The State Government in the form of stamp duty and Municipal Corporation in the form of additional property taxes.

    It must be noted that although the charging of rent above the standard rent and permitted increases or receiving any consideration in cash or in kind other than the standard rent is an offence under the existing Act, there may not be a single transaction where granting or continuation or renewal of a lease is made without unlawful consideration (Premium).  The several properties  are  acquired  by   the  professional  landlords, with in collusion with some of the politicians, builders & developers, solicitors, lawyers, architects, social workers and with only to make easy and quick money and unfortunately image of entire legal and  architectural  profession  is tarnish. Thus
the consequences of "Premium" i.e. money received illegally has created serious problems in real estate. Further, this black money is to a great extent cause of several killing of professional landlords, builder, developers, contractors, etc. Similarly, it has resulted in creation of parallel economy, which has created imbalance in the money market. This also enables the landlords to give handy excuses for denying repairs to the old buildings.

    The Committee, therefore, unanimously decided to consider legalisation of the concept of premium transactions as it will have manifold advantages viz :

    The money received by way of "Premium" could be used for the construction of new buildings by the landlords, builders and also to repair and reconstruction of old buildings.
It will fetch large revenue to the State exchequer by way of Income Tax and Municipal Corporation Tax
It will bring down the inflation in the real estate market and reduce the black money.
It will reduce litigation/dispute between landlords and tenants.
It will motivate the tenant to surrender his tenancy by getting amount officially which he can use for hiring better premises or ownership flat.
It will provide unlocking of substantial stock of housing which has been lying unused.


    Notwithstanding anything contained in this Act, it shall be lawful for, -

    The tenant or any person acting or purporting to act on behalf of the tenant to claim or receive any sum or any consideration, as a condition of the relinquishment, transfer or assignment of his tenancy of any premises;

    The landlord or any person acting or purporting to act on behalf of the landlord to receive any fine, premium or other like sum or deposit or any consideration in respect of the grant, or renewal of a lease of any premises, or for giving his consent to the transfer of a lease to any other person.

    Though the premium (pugaree) is legalised at the time of granting renewal or at the time of surrender, the people do not have sufficient guidance for drafting any agreement to this effect.  Some of the people have made inquiries with the Hon'ble Minister of Housing or Department of Housing or Department of Law. However they are yet to receive any guidelines.


    The landlords and tenants need guidance on the following points :

    Attempts are therefore made to guide the people on the basis of existing provisions of law. It must be noted that according to Section 105 of the T.P.Act, prices paid or promised in consideration of granting lease is called premium and it may be in addition to the rent. It represents or supposed to represent the capital value of difference between annual rent and best rent that otherwise be obtained. The landlord and tenants are like the partners in running the management of the building and in case of transfer of tenancy, Provisions of law must be interpreted for the benefit of both or interest of both and loopholes and defects if any should be reduced in the interest of law.

    While deciding what should be the percentage of premium or deposit the landlord should receive and what percentage should be paid to the tenant, it is stated that longer the period of possession and occupation more the percentage in favour of tenant and occupant. For example, if the tenant is staying for 50 years or more, he should get 50% or there about as mentioned below :
50 years or more
40 years or more
30 years or more
20 years or more 
10 years or more

   It will be kept in mind that the longer period of possession, more percentage of premium subject to adjustment and effects in each case.

    While referring     to the question of payment of Stamp Duty on grant of lease or renewal of lease or surrender of lease it must be noted that it is merely right for enjoyment and not for ownership. Article 5 of schedule I of the Bombay Stamp Act provides stamp duty on agreements. The Stamp Duty payable under Article 5 (h) of the Schedule I of Bombay Stamp Act on agreement of Leave and Licence will be Rs.20/- as there is no specific provision as far as agreement of leave and license is concerned.  Article 36 provides stamp duty for deed of lease. Agreement of Leave & Licence does not create any right in the immovable property. The deed of lease creates right in the property as lessee. The Leave and License Agreement is merely a license or permission granted by the owner to guarantee. Section 52 of easement Act is clear on  the point. Thus  agreement  of leave and license cannot be equated with deed of lease.

Under the existing practice though there is no specific circular, the Stamp Duty is collected on the basis of 12.5 years and rent without tenancy right being converted into ownership.

    In the year 1994,  the Maharashtra State Government inserted Section (g-d) to Article 5 of schedule 1 of Bombay Stamps Act, 1958 by Maharashtra Tax Laws (Levy and Amendment) Act, Maharashtra 29 of 1994 wherein Stamp Duty was levied on Agreement relating to transfer of tenancy of immovable property. In Mumbai the Stamp Duty is levied at the rate of Rs.1,000/- per sq.mts. for transfer of tenancy for the purposes of non-residential use and Rs.100/- per sq.mts. for the purpose of residential use. The Stamp Duty livable on transfer of tenancy within the limits of Municipal Corporation of Cities like Mumbai, Thane, Pune, Nagpur and Navi Mumbai, Kalyan, Pimpri - Chinchwad, Amravati, Nashik, Aurangabad, Kolhapur and Sholapur are as below :

Article 5 (g-d) of Schedule I of Bombay Stamps Act, 1958 read as below :-

    Agreement or its records or Memorandum of Agreement relating to transfer of tenancy of immovable property, for every square meter of the area of the tenanted property the right of tenancy which is the subject matter of transfer and situated within the limits of -

The Municipal Corporation of Greater Bombay –
for the purpose of non-residential premises - One thousand rupees
for the purpose of residential premises - One hundred rupees

The Municipal Corporation of the Cities of Thane, Pune, Nagpur and Navi Mumbai.
For the purpose of non-residential premises - Five hundred rupees
For the purpose of residential premises - Fifty rupees

The Municipal Corporations of the Cities of Kalyan, Pimpri-Chinchwad, Amravati, Nashik, Aurangabad, Kolhapur and Solapur.
For the purpose of non-residential premises - Two hundred rupees
For the purpose of residential premises - Twenty rupees.

    While referring to Income Tax, there is difference of opinion as some people have taken view that if it is income the landlord and tenant will be liable to pay the Income Tax. However, according to them, it should be treated as capital gain and unless the landlord and tenant reinvest this amount, for example: the landlord should invest for the purpose of construction of new building or for repairs/reconstruction of old building. If he does not do so, it should be treated as income and must be liable for Income Tax. However if he invests the said amount, he may not be liable for Income Tax. Similarly is the case of tenant and occupant. When the tenant or occupant receive the amount, when he surrender the tenancy right. If he reinvest it to buy another premises he may not be liable for Income Tax. However, if he fails to do so, it should be treated as income.

    It must be noted that in view of the fact that the original member and new member are willing to pay the share of amount of pugaree or premium to the landlord there is no reason why the landlord should refuse or delay the transfer of tenancy rights. Infact there are similar provisions under the rent Act when one member transfer his membership and flat through a member and an objection was raised the Supreme Court held that it is not in public interest to do so. It will be also against the principles of the interest of commerce as stated below :

    "In absence of clear and unambiguous legal provisions to the contrary, it will not be in public interest nor in the interest of commerce to impose a ban on sale ability of these flats by a tortuous process of reasoning. The prohibition if intended by the legislature, must be in express terms (1974) 76 BOM LR 375 Reversed (Para 18,19)" Ref. Ramesh Himmatlal Shah vs. Harsukh J.Joshi AIR 1975 SC 1470.

    There is no absolute prohibition in the Act or in the Rules or in the Bye-laws against transfer of a member in the property belonging to the Society.  The only transfer which is void under the Act is one made in contravention of sub-sec. (2) of Section 17.

    The Flat is owned by the Society and the alottee has a right or interest to occupy the same.  There is nothing in the language of Section 31 to indicate that the right to be sold in auction is not attachable in execution of the decree.  There is nothing in Section 31 to even remotely include a prohibition against attachment or sale of the aforesaid right to occupation of the flat (Paras 17,18)

    The only restrictions under Section 29 (2) are that the member may not transfer his interest in the property prior to one year and the transfer is made to an existing member of the Society or to a person whose application for membership has been accepted by the Society.  It is true that by-law 71D says that a member to whom a tenement is allotted shall to whom a tenement is allotted shall not assign or underlet, vacate or part with the possession of the tenement or any part thereof without the previous consent in writing of the Managing Committee, but there is nothing to show that contravention of this by law makes the assignment void under the Act unlike in the case of a transfer being void under Section 47 (3). There is no impediment to ratification of the assignment by the Committee particularly in view of the legal position arising out of the conjoint effect of Section 29, rule 24 and by-law 9.  Section 29 read with rule 24 shows that there is no prohibition as such against transfer of a share to a member or even to a non-member if he consent to be a member and makes an application for membership by purchasing five shares as provided under by-law 9.

- Ramesh Shah  and Harsukh Joshi AIR 1975 SC 1470
    It must be noted that though the principles arising out of transfer of membership and flat in a co-op. Society in some what similar in case of transfer of tenancy between the old tenant and new tenant. However, there is some difference in as much as in case of Co-op. Society the member owns the flat however, under the Rent Act the tenant has only right to use and occupy the flat. It must be noted that the old tenant cannot force on the landlord new tenant who may have criminal or anti social background however, it must be noted that it would not be proper and fair on the part of the landlord when the new tenant is reasonably good person and necessary share of premium and pugaree is paid to him.

    In case landlord cannot accept the part of his share the both the tenants  can said that amount to the Chief Minister or Housing minister bringing to their notice that the amount is being refused by landlord without reasonable cause. Under no circumstances landlords cannot refuse the amount. At the most we can demand additional amount if the circumstances so warrant

    In view of this new provisions under Section 56, all parties not only the landlord and tenant and estate agent but even the Government and Municipal Corporation are likely to get the benefits substantially. The Central Government would get Income Tax. The state Government will find if more houses are constructed the problems of housing will be solved to that extent. At least the old buildings are repaired or reconstructed there is no building collapse. The Municipal Corporation will get the additional Tax which can be utilised for  civic  amenities which  would  include  even the repairs providing some amount for repairs of building and cleanliness and prevention of pollution.

    Let us hope that the people of Maharashtra should try to get maximum benefits of this new Act and fulfill the object of converting the black money into real money to achieve the real object of life that is peaceful co-existence and better houses at affordable cost and affordable rent.

Q-1 What happens when the Original landlord who has taken Pugaree or Deposit is dead, whether the landlord who has subsequently purchased the property is liable to pay the premium or refund the deposit?
Ans. As the subsequent landlord get certain rights he will also has to shouldier certain responsibilities.  If it is proved that original landlord has taken premium or deposit, The tenant Old or New can insist upon him to refund the premium or deposit.  Before the New Rent Act when premium was taken, it was nothing but substantial price was accepted without receipt; now the difference is that it is accepted under the written and registered agreement with receipt.
Q-2 When the deposit is paid at the time of creating Leave and Licence or Agreement of Lease, if the Landlord or Licensor refuse to return the amount at the time of vacating the premises, what is the remedy to the Licensee or tenant ?
Ans. When the deposit is paid it must be kept in the joint account i.e. of landlord or tenant jointly and that interest payable should be shared equally or by consent Landlord should be allowed to have entirely, and that if the landlord failed to return the deposit after the expiry of the Licence or Lease, he should be prosecuted for criminal breach of trust and that he should be held liable to pay penal interest which may be at the rate of 24% on the deposit.
Q-3 Whether instead of taking money in the form of pugaree, when premises are required to be surrendered, whether it can be done by converting tenancy right into ownership by paying the share of pugaree payable to the landlord ?
Ans. It must be noted that very object of receiving and paying pugaree is to acknowledge the legal rights for possession as a tenant and that either the tenant or occupant can take money in the form of pugaree or deposit.  Some of the tenants and occupants from Girgaon, Lalbaug, Parel or such areas have vacated the premises and have gone to Dombivli, Kalyan and other places.  Instead of taking money in the form of pugaree and going away, tenants or occupants can pay the amount of paguree payable to the landlord as a balance payment and convert the tenancy right into ownership.
Q-4 Under the Old Bombay Rent Control Act, the Landlord himself or any person acting or purporting to act was liable for imprisonment and fine on conviction if he has taken or received any fine premium or a like sum.  However in view of the fact now that this provision is deleted and new Section 56 is included whether the landlord is liable for acquittal?
Ans. According to New Section 46 since the premium or deposit was prohibited, it will be a technical offence and the accused is liable for punishment.  However, in view of the fact that under Section 56 of the New Act, the right is given to the tenant and landlord to receive any amount in the form of premium or deposit etc.  In view of the said facts and in view of judgement of Supreme Court reported in Mohanlal Kotharu Vs. Tribhuvandas 1963 SC 358.
Q-5 Whether it is mandatory for the new tenant and landlord to have agreement in writing and have it registered under the New Maharashtra Rent Control Act 1999?
Ans. Under the new Act, it is stated that notwithstanding anything contained in the Act 1999, it will be lawful for the tenant or any person acting or purporting to act on behalf of the tenant to claim or receive any sum or any consideration as a condition of relinquishment, transfer of assignment of tenant of any premises. It is also in the interest of both to have written agreement in respect of old tenants also
Q-6 Whether the landlord has right to receive lawful charges under the new Act?
Ans. It must be noted that under the old Rent Act 1947, the landlord either himself or through any person acting or purporting to act on his behalf was prevented from taking any fine, premium or lumsum or deposit in respect of grant of renewal or lease of the premises.  Now right is given to him under Section 56, of M.R.C.Act 1999, and it is not an offence.
Q-7 What is the advantage of the legalising the Pugaree?
  1. As a result of legalisation, the landlord can have money for construction of the new building or for repairs or reconstruction of the old building.
  2. As a result of repairs and reconstruction, the old building will not collapse and people will not die.
  3. Relations between the landlord and tenant will remain cordial and there will be less dispute.
  4. The central Government will get a reasonable income tax and State Government will get reasonable stamp duty and municipal corporation will get additional property taxes.
Q-8 Whether the landlord or licensor can insist upon the old tenant or old occupant to pay additional premium or deposit after the commencement of the new Act?
Ans. The new act has conferred certain rights and duties on landlord and tenant.  There are tenants who having the commercial premises are benefited by the use of the premises and on their own they may give some deposit to the landlord on their own.  However, it may not be possible or legal to force an old tenant to pay premium or deposit
Q-9 What are the advantages of giving deposit at the time of receive tenancy rights or renewal interest?
Ans. There may be tenants or occupants who may like to convert the black money into white money and by virtue of adding it as a part of tenancy document.  It becomes a document of title referring to the value of the property and like agreement of ownership flat, which is duly stamped and registered.  This agreement of tenancy right also furnished as a security when the tenant occupant tries to get some loan.
Q-10 Is it mandatory to have a written agreement and have it registered in respect of old tenancy or in case of old licenses?
Ans. The agreements which are executed in writing and registered are beneficial to both the parties.  In the countries all over the world, the agreements are entered into writing.  This helps parties to know their rights and duties.  The execution of an agreement in writing will help both the parties and in no way it will cause any difficult or disadvantage to any of the party and therefore even assuming that it is mandatory under the new law, it is in the interest of both the parties to do so.
Q-11 What happens when the original tenant is dead and rent receipt is not in the name of living person? Whether the living person who is a heir or legal representative can claim damage when he transfer his tenancy right or is surrounder his tenancy right or possession?
Ans. The possession of the terminated premise is considered as a nine point in law.  It is the courts right in favour of tenant and occupant.  He is the court's right in favour of tenant and occupant.  He is entitled for premium when he transfer the premises or surrounder the premises.  However, he will not get the same percentage as ratio of the package, which the living person would get.
Q-12 Whether advisable to take premium (pugaree)and vacate or surrender the premises or it is better to pay because amount and converted into ownership?
Ans. The Pugaree is reward for the length of possession that the tenancy or occupant is in possession of the premises, e.g. If the market value of the premises is Rs.15,00,000/-. And as account of transfer original tenant get 10,00,000/- and landlord get 5,00,000/- as pugaree.  It is better that old landlord pays the landlord Rs.5,00,000/- and get tenancy right converted into ownership rights, let me keep "Paguree" over "Paguree" in real term.
Q-13 Whether the pugaree or deposit is officially received in other countries like U.K., U.S.A. and refunded it at the time of vacating it?
Ans. Yes, when the new tenancy is created premium or deposit is officially accepted and the amount is refunded when the premises are vacated.
THIS AGREEMENT made at Bombay this .….. day  of May, Two thousand BETWEEN (1)Mr./Mrs..................................   through their Constituted Attorney  Shri..............,  residing at .................  .................  Mumbai-400  0.., hereinafter called  "THE  LANDLORD"  (who may be individual , Partenership firm ,Company or such other) (which  expression shall  unless  it  be  repugnant  to the context or meaning thereof  be  deemed to include their heirs, legal representatives,  executors, administrators  and/or   any  survivors  or survivor of them) of the ONE  PART 

AND Mr. / Mrs............................. aged......... residing at  ....................................Room No: ........Floor No: ..........., .............................. Mumbai-400 0.. , hereinafter called "THE  ORIGINAL TENANT" on the SECOND PART; (which expression includes their heirs, legal representatives, executors, administrators) and

AND Mr. / Mrs............................. aged......... residing at  ....................................Room No: ........Floor No: ..........., .............................. Mumbai-400 0.. , hereinafter called "THE  NEW TENANT" on the THIRD PART; (which expression includes their heirs, legal representatives, executors, administrators) 

WHEREAS  the  Landlords  are  seized   and  possessed of or otherwise well and  sufficiently  entitled to the plot of land and building standing  thereon  situate at Plot No.  .....  Ward  No....... Street No....,   .....................  Mumbai-400  0..  and  the  flat/shops  Nos.  ...  and  ...  therein the building  popularly  known  as ................... building; 

WHEREAS  under Section 18 of  Bombay Rents, Hotel and lodging Houses Rates Control Act, 1974 was prevented from receiving any fine premium or like sum or deposit or any consideration other than the standard rent or oermitted increases in respect or grant  renewal or continuance of a lease of any premises or for  giving his consent  to the transfer of a lease by sub-lease or otherwise, such landlord or prson shall on conviction be punished with imprisonment for a term which may extend to six months and shall also be punished with fine which shall not be less than the amount of the fine premium or sum or deposit or the value of the consideration received by him and further where the offence is committed by the landlord in respect of premises which were of his ownership on the date of the offence such premises shall be liable to confasication.

AND WHEREAS having received many representations from the representatives of tenent associations and landlord associations the committee unanimously decided to legalise the concept of premium as it will have manifold advantages such as:

1) The money received by way of "Premium " could be used for the construction of new building by the landlords builders and also to repair and reconstruction of old buildings.

2) It will fetch large revenue to the state exchequer by way of Income Tax and Municipal Corporation Tax.

3) It will bring down inflation in real estate market and reduce the black money.

4) It will reduce litigation/ dispute between landlord and tenants.

5) It will motivate the tenant to surrender his tenancy by getting amount officially which he can used for hiring better premises or ownership flat.

6) It will provide unlocking of substantial stock of housing which has been lying unused.

AND  WHEREAS the party of second part has given Rs......../- (Rupees ____________). In year 1995 or thereabout and having use the premises for period of 5-6 years have decided now to relinquish and the tenancy of the premises as provided under Section 56 of Maharastra Rent Control Act, 1999 by entering into a written agreement.

AND WHEREAS the parties state that there are no further guidelines reguarding the execution of the agreement , However they undertake to pay the necessary stamp duty if any and register the agreement.

AND  WHEREAS  under Section 55  of  Maharashtra Rent Control Act, 1999 the responsibility  of  getting  agreement of Leave and  Licence  or  letting any premises is made obligatory upon the  landlord  such  obligation  is   notwithstanding  anything contained in this Act and any other Law  and  that in case of failure on  conviction  the 
landlord is liable for imprisonment. This agreement therefore is made to fulfill the object  of  this Act. 

AND  WHEREAS  under Section 55  of  Maharashtra Rent Control Act, 1999 the responsibility  of  getting  agreement of 
 Leave and  Licence  or  letting any premises is made obligatory upon the  landlord  such  obligation  is 
 notwithstanding  anything contained in this Act and any other Law  and  that in case of failure on  conviction  the 
 landlord is liable for imprisonment. This agreement therefore is made to fulfill the object  of  this Act. 

 AND  WHEREAS  under section 56  of  Maharashtra Rent Control Act, 1999 right is given  to  tenant/licensee  and 
 landlord/licensor  to  receive  lawful charges 

 i) The tenant/licensee  or  any  person action or purporting to act on behalf  of  the tenant/licensee to claim or receive any  sum  or  any  consideration  as a  condition  of  the  relinquishment,  transfer  or assignment  of  his  tenancy/licence  of any premises 

 ii)  The  landlord/licensor or any person acting or  purporting to act on behalf of the landlord/licensor to  receive  any fine, premium or other like sum  or  deposit  or any consideration  in respect of  the  grant,  or renewal of a license of any  premises  or  for giving his consent to the transfer of  a  lease to any other person. 

 AND  WHEREAS the original tenant and the new has requested  the  landlords  and the landlords through their  Constituted  Attorney  have  agreed to transfer or survive the  said   shops  Nos....  and   ....,   admeasuring  about  ........  sq.ft.  at a  monthly  rent  of  Rs..…../- (Rupees ...........) on the monthly tenancy basis  commencing from 1st day of ......... 2000 and upon  the terms and conditions and subject  to the  convenants hereinafter appearing :- 


1. That in consideration of the premises  and  the  rent hereinafter reserved and of the  covenants, conditions and stipulations,  obligations  and agreements herein contained and on the  part  of the tenant to be observed and performed,  the  landlords  do  hereby let out to the  Tenant  on  monthly  tenancy basis the said shop No....  and  ... on the ....... floor of the said  ..........  building  at Plot No.... .. Ward No.....  Street  No. ......,  ................... Mumbai-400 0..,  admeasuring about ..... sq.ft. TO HOLD UNTO  the Tenant   as   monthly   rent   commencing   from  1st ......2000  YIELDING AND PAYING therefore  and  during  the  said terms the monthly rent of  Rs......./-  (Rupees .........................) payable on or  before  the  1st  day of each  and  every  month without  any deduction or  abatement  whatsoever  and  upon the conditions of the  observance  performance  of covenants, conditions,  stipulations, obligations and agreements on the part of  the Tenant herein contained.

2.The new Tenant has paid to the landlords a  sum  of Rs......./- being the amount  equivalent  to  3  months'  rent in advance  as  a  security  deposit. 

3.The  new  Tenant to the  intent  that  the  obligations hereby continue throughout the  term  hereby  agrees and covenants with the  landlords  as follows :- 

i. To  pay the reserved rent at  the  time ; and in the manner aforesaid; 

ii. To  pay all new rates,  issues,  taxes,  dues,  assessments  in respect  of  the   said  premises;  which  may  be  levied  hereafter or increased in the  existing  rates, cesses, taxes, dues, assessments   etc.,  in respect of the said  premises   which  may  be low be  payable  by  the  Tenant; 

iii. To  pay all charges for electricity  or  to  her power consumed in or  upon  the  said   premises  including  the   meter  charges  and  deposits.  It  shall   be  responsibility  of the Tenant to  apply  and get the meter in her own name. ;

iv. To keep the interior of the said  prem-ises  and the floors, walls,  ceilings,  doors,   windows,  electric   fittings,  sanitary  and other  installations  and  other  fittings including  windows  and  the  glass-panes etc., herein  in  good  and tenable condition wear and tear and  damage by an inevitable accident or avt of  the God alone excepted and  to  re-pair,  make good, reinstage or  replace  any  damage or breakage  caused to  the  same or any part thereof; 

v.  To permit and give all necessary facil-ities  to the landlords,  their  agents  and   servants  surveyors,   Engineers,  Architects, Contractors or workmen  and  all  other  persons authorised  by  the  Landlords to enter upon the said  premises or any part thereof at any  suitably agreed time after 24 hours'  previous  notice for viewing and  inspecting the  conditions and state of  the  said  premises and to eggect such repairs  as  the  Landlords may choose to do and  to  allow and permit all such repairs to be  done without any conpensation therefore 

vi. Not to do or permit to be done upon the  said premises anything which is, in the opinion  of  the landlords, amy  be  or  become  or  grow to be  a  nuisance  or  annoyance or in any way interfere  with  the  quiet or confort of the  landlords  or  any other tenants or  occupiers  of  the said building or the owners and the  tenants  of the  neighbouring  premises  nor  to  use the said premises  or  any  part  thereof  for any  illegal  and/or  immoral purposes; 

vii. The renewal or replacement or repairing  of  the  electric or other  wring tings, fixtures etc., shall be done  by  the Tenant at his own costs and strict-ly  in  accordance  with  the  existing  wiring,  fitting, fitures etc., and  in  compliance  and the existing rules  and  laws  in regard to the supply of  electricity  of Bombay Electric Supply  and Transport   Undertaking   and   through  licensed electrician and under previous  written  intimation  to  the  landlords  under  no circumstances whatsoever  the   landlords whall be liable for the same. 

viii.To  carry out and observe the  restric-tions  that  may be imposed by  law  in  respect of the use of the said premises  or  the services and supplies  attached  thereto;

 ix.To  give  clear three  months  Calender  Notice  in writing before vacating  the  said premises; 

x. If any painting or repainting  including white wash, oil paint or any paints  or polishing is required to be out in the interior of the premises future  the same shal be caried out  by  the tenant at his own costs & expenses. 

4.The landlords hereby agree with the as follows:- 
i.That  the  tenant on  paying  the  rent  hereinabove reserved on the day and  in  the  manner  herein before  stated   observing  and  performing  the  stipulations, conditions, covenants and agreements  on  the  Tenant's  part   herein  contained  may enjoy the said  premises  without  interruption by the  landlords  or   any  person   lawfully   claiming,  through under or in trust for them; 

ii.  Subject  to  the  Tenant's   covenants, conditions and agreements to carry  out  and  do heavy or structural repairs the said premises if and when necessary   or required; 

5. It is expressly agreed by and between  the  parties  that  the Tenant shall be  entitled  to sub-let  the tenanted premises to any  Co-operative or nationalised bank or to any other person  or  persons or firm or company on the terms  and  conditions  which  shall not be contrary  to  or  inconsistent  with the terms and conditions  set  out  in  this agreement. Provided  that  if  the  Bombay  Municipal Corporation levies  any  additional Assessment for such sub-letting, the same  shall be paid by the Tenant. 

6.The Landlords agree that the tenant  shall  be entitled to make any additions or alterations  and/or  any construction of permanent nature  in  the  premises  provided that such  additions  or  alterations  does  not affect the  building  and  that they are done after obtaining proper  sanction from Bombay Municipal Corporation and after  proper prior permission to the landlords. 

7. Any  letter, notice or  communication  required  to be sent to or served upon the  tenant  shall  be  deemed to be properly served  on  the  Tenant  if left at or sent to the Tenant at  the  said premises or forwarded to the Tenant at  her  last  known address or at the said  premises  by  Registered post and/or ordinary post. 

8.As a condition precedent to this agreement  that  Tenant  has agreed to be  a  tenant  after  satisfying herself that the monthly rent  agreed  to be paid by her is standard rent. 

9.It  is agreed by and between  the  parties  that  it shall be lawful for the Tenant to  give  on Leave and Licence basis or for conducting the  said  business  premises  or  any  part  thereof  Provided  That if the Bombay Municipal  Corporation  levied any extra Assessment for the  same,  the tenant shall pay such extra levies. 

10. The NEW TENANT will pay Registration Charges.

IN WITNESS WHEREOF the parties hereto have  hereunto  set  and subscribed  their  respective  hands  to this day and year first  herein  above  written. 

withinnamed Shri .......................   )
.............................................. for   ) 
and on behalf of the landlords in   ) 
the Capacity as Constituted            ) 
Attorney in the presence of            ) 
1. Sd/-                                            (Advocate) 

withinnamed Shri .......................  )
.............................................. the  )
Original Tenant in the presence of ) 
1. Sd/-                                            (Advocate) 

withinnamed Shri .......................  )
.............................................. the  )
New Tenant in the presence of ) 
1. Sd/-                                            (Advocate) 

Advocate Address

RECEIVED Rs......../- (Rupees .................) as  premium or deposit in respect of  the  flat/  room No.... in building known as ..............,  Road....................  Mumbai-400  0..  which  will refunded or adjusted as per terms and condi-tions. 
I say received 


1. ....................

2. ................….


 DATED THIS      DAY OF      2000 










Advocate Name
Telephone / fax


Chargin Section 45(1) : Prerequisites : Capital Asset u/s.2(14) and transfer u/s.2(47).

Transfer inter  alia includes :
Relinquishment (example : release deed)
Compulsory acquisition : (examples : by appropriate authorities under chapter XXC – By BMC of plot coming under reservation for cash or TDR)

Taxability of Tenancy rights cost of acquisition whereof is NII :
Before 01 04 1994 : Ratio laid down in B.C. Srinivasa Setty 128 ITR 294 (SC) would apply From 01 04 1994 : Capital gains would arise as Section 55 (2) amended.

Taxability of alternative accommodation received in place of tenanted premises when transferred : Capital gains would arise – cost of acquisition = fair market value as on date of its acquisition – this view supported by case law in 7 ITD 160 BOM.

Another view : Not taxable as cost of acquisition of alternate accommodation was nil – no decided case law to support this view – In any case this view not be possible in respect of alternate accommodation received after 01 04 1994

Taxability of TDR : When TDR is received in place of land acquired by BMC : taxable as capital asset has been transferred – date of possession to BMC is the date of transfer – fair market value of TDR is the consideration received

Another view : Not taxable as no transaction of commercial nature – development potential in the land acquired has been transformed in DRC – no gains or profits have arisen to the assessee – Fair market value of TDR not easily determinable as will be dependent upon the buyer and in which suburban area he intends to use –

Transfer of TDR will attract capital gains

Analysis of relevant judgements


Interest received on unpaid sale price : (1999) 239 ITR 489 (MAD)

Discharging Mortgage on property (1997) 93 Taxman 389 (SC) – 227 ITR 222 (SC) – 222 ITR 211 KER

Interest on borrowal for acquisition  of property : 152 ITR 247 KAR

Amount paid to tenant for vacating : (1998) 234 ITR 95 AP

Renovation work : (1997) 224 itr 414 (sc)

Legal expenses in compulsory acquisition : 127 ITR 810 KER

Expenses to realize consideration : (1999) 107 Taxman 544

Leasehold rights and valuation : 176 ITR 417 (SC)

Time limit for investment in new residential house – wording u/s. 54 (2) can be beneficially used in favour of assessee

Remodelling a house : (1997) 138 Taxman 243

Flats in self financing type of co-operative societies and institutions : Circular 672 dtd. 16 12 1993

Supreme Court on word purchase u/s. 54 : 120 ITR 46

Date of construction : 165 ITR 571 KAR – ITA No. 5937 BOM – 56 TTJ 417 MAD

New house partly purchased and partly constructed : 129 ITR 218 GUJ

Purchase of more than one house : 16 ITD 195 BOM

Completion Certificate of building : 32 ITD 798 DEL

SEC.230A : Share of co-owner less than Rs.5 lacs : 225 ITR 10 BOM – Application by transferor : (1999) 104 Taxman 653 KER

SEC.195 : Payment of consideration to NRIs

SEC.139 : Submission of PAN/GIR in case transaction above Rs.5 lacs

It is reproduce from the note prepared by T.J. Ghia (Chartered account) at his lecture meeting on 5th June. 2000.

Thursday, July 08, 2000
Part 4 A
Mantralaya, Mumbai 400 032, dated the 8th June 2000


No. RGN.2000/2120/CR-592/M-1- In exercise of the powers conferred by sections 78 and 79 of the Registration Act, 1908 (XVI of 1908), in its application to the State of Maharashtra, read with sub-section (1) of section 55 of the Maharashtra Rent Control Act, 1999 (Mah. XVIII of 2000), the Government of Maharashtra hereby further amends, with effect from the date of issue of this Notification, the TABLE OF FEES prepared under the said section 78 and published under the Government Notification, Revenue Department No. RGN. 1558/67731-N, dated the 17th July 1961, as required by the said section 79, as follows, namely :-

In the said TABLE OF FEES, after Article III, the following Article shall be interested, namely:-
"III A For the registration of a document of agreement  of leave and licence, if such document is relating to the property situated :-

in the area of limits of a
Municipal Corporation  …….. Rupees 1,000
in any other area   …….. Rupees   500

By order and in the name of the Governor of Maharashtra,

Under Secretary to Government

In case, one need further guidance please contact the Secretary, Flat Owners Association, at the address given below:


Gen. Secretary.

© Copyright 2000, The Flat Owner's Association, Mumbai.
Updated on 1st May 2002

23, Hamam Street, 3rd Floor , Above Quality Machine Tools , Fort , Mumbai - 400 023
Tel : +91-22-22650284/22657291 , Fax: +91-22-22657291