INDIA Law and Practice Contributed by: Vivek Chandy, Archana Tewary, Kumarmanglam Vijay and Megha Arora, JSA
6.18 Right to Assign a Leasehold Interest
No asset class distinctions relating to leases have been introduced due to the COVID-19 pandemic. 6.15 Effect of the Tenant’s Insolvency It is market practice to include a termination event in the lease that is triggered by the ten - ant’s insolvency, as the tenant would not be able to comply with its obligations under the lease. However, where the tenant is under a CIRP pro - cess, from the date of the admission of the appli - cation by the relevant authority, a moratorium is declared with the effect of, inter alia, prohibiting the recovery of any property by an owner/lessor where such property is occupied by or in pos - session of the tenant under insolvency. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations Payment of IFRSD/premium is the most com - mon security provided to the landlord. At times, the landlord may require the tenant to provide a bank guarantee for securing certain payment obligations. 6.17 Right to Occupy After Termination or Expiry of a Lease If contractually permitted, the tenant may con - tinue to occupy the premises as a monthly ten - ant after the expiry/termination of the lease or if the landlord does not refund the IFRSD in time. In all other cases, the tenant would have to leave the premises on the date of the expiry/termina - tion of the lease, failing which the landlord can approach the court to evict the tenant, who will be a trespasser. The landlord can also claim mesne profits from the tenant for such unau - thorised occupation.
Under TOPA, a lessee may transfer absolutely, or by way of mortgage/sublease, the whole or part of their interest in the property, and any trans - feree of such interest or part may again transfer it, subject to the lessee not ceasing any of the liabilities attached to the lease and there being no contract to the contrary. In respect of a statu - tory tenant, state legislation (such as the Maha - rashtra Rent Control Act 1999) also prescribes restrictions on transfers. The sublessee has to abide by the lease agreement executed between lessor and lessee. 6.19 Right to Terminate a Lease Events of default and termination rights are contractually agreed between parties, including granting a cure period following such event of default. Such events would be standard events, such as breach of lease terms, failure to pay rent Leases of immovable properties from year-to- year or for more than 12 months or reserving a yearly rent require mandatory registration at the SRA. The Registration Act requires the deed to be registered within four months of its execu - tion. An additional four-month extension may be granted at the discretion of the SRA, by levying a penalty, provided such non-presentation of the instrument within four months of execution was due to unavoidable circumstances. After regis - tration, the lease is recorded in the local Registry of Deeds. for more than two rent cycles, etc. 6.20 Registration Requirements Stamp duty is payable on the lease deed before it is registered, by the buyer, unless it is other - wise agreed to be shared between the parties. Most stamp acts provide that, where there is no agreement to the contrary, stamp duty will be
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