DAMODARAM SANJIVAYYA 

NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P., INDIA 

PROJECT TITLE

Critical Analysis on Drafting of a Deeds & Execution of License

SUBJECT

DPC

NAME OF THE FACULTY

Ms BHAGYA LAKSHMI

Name of the Candidate

ATTILI. LEELA NAGA JANAKI RAJITHA
Roll No. 
 2017018
VII Semester

Contents
introduction:...............................................................................................................................2

lease:...........................................................................................................................................2

differnce sale and lease..............................................................................................................3

DIFFERENCE BETWEEN LEASE AND LICENSE...............................................................4

Lease..................................................................................................................................4

License...............................................................................................................................4

Stages of a Lease Deed..............................................................................................................5

difference between Lease Deed and Rental Agreement............................................................6

Legal Aspect of registration:......................................................................................................7

provisons required to draft a lease deed:....................................................................................7

model drafts of a lease deed:......................................................................................................7

important aspects of a well excueted lease deed:.....................................................................26

conclusion:...............................................................................................................................28

bibilography:............................................................................................................................28
Critical Analysis on Drafting of a Deeds
& Execution of License
INTRODUCTION:
Lease deed pertains to the leasing and renting of a property, whereby the terms and
conditions of the renting of the property are enumerated. It acts as the module for the rule of
conduct, including restriction if any and adherence to certain conditions if any by the lessee
and lessor for the property to be leased out. A pre-expressed lease deed has to be clearly
formulated and should be free from ambiguity in order to maintain the cordial relationship
between the lessor and lessee.

LEASE:
The definition of ‘Lease’ refers to the transfer of a right to enjoy the property for a defined
period of time or could be in perpetuity. The consideration for a price paid or promised or of
money, service or any other thing which is of value and that is rendered periodically or such
specific occasion to the lessor by the Lessee

Lessor: In a lease deed the lessor refers to the owner having absolute right on the property
which is the subject to the matter of the lease.

Lessee: In a lease deed the lessor refers to the person acquiring the rights to use and enjoy the
property on lease from the Lessor which is the subject matter of the lease;

Premium or Rent: It is the Premium or on payment of money or any other thing of value,
periodically or on specific occasions or intervals, known as Rent.

Therefore, by executing a Lease Deed, what is transferred by the Lessor to the Lessee is only
his right to enjoy the property, subject to the terms agreed upon, and not the whole or any part
of the absolute ownership rights, this type of transfer in conveyancing parlance is known as a
‘demise’.
 A lease can be understood as the rightful separation of ownership and possession i.e. prior to
the grant of the lease, the Lessor has the right to enjoy the possession of the land but during
the concurrence of the lease, he excludes himself from that right.1

The usage of the term ‘demise’ in a Lease Deed or instrument of lease triggers the Lessor’s
liability for the warranty of quiet enjoyment of the property the Lessee is entitled to remain in
possession until the lease is terminated by due process of law.2

DIFFERNCE SALE AND LEASE

Sale / Purchase Lease

1 The Purchaser gets absolute The Lessee only gets a right to enjoy the property but not
. ownership rights of the property ownership rights

The Lessee’s right to possession and enjoyment of the

2 There is no logical end to the
property comes to an end upon the termination of the lease
. ownership of the property
unless the lease is in perpetuity

The sale consideration is usually

3 The consideration can either be in the form of a one-time
paid once at the time of purchase of
. premium or as rent at periodic intervals
the property

Lease grants only the right to possession and use of the

A sale grants the right to
4 property. Although some arrangements do allow a sublease or
possession, enjoyment of benefits
. transfer of lease but the rights of the Owner are always valid
and the right of further sale
and subsisting

The overall cost of purchasing a

5
property is usually higher than Leasing is a relatively cheaper mode of
.
leasing.

6 The purchaser can enjoy the

The Lessee cannot enjoy the residual value of a property
. residual value of a property

Documents involved are Agreement

7
to Sell, Sale Deed, Transfer Deed, Documents involved are Agreement to Lease or Lease Deed
.
Deed of Conveyance etc.

1
Anwarali vs Jaminilal Roy, AIR 1940 Cal. 89.
2
Jaswantsinh Mathurasinh & Anr. vs Ahmedabad Municipal Corporation & Ors., 1992 Supp. (1) S.C.C. 5, 12.
 DIFFERENCE BETWEEN LEASE AND LICENSE

Lease License

The Lessee gets a right to possession and

1 The Licensee gets a right use the property for a
enjoyment of the property but not ownership
. fixed time and for a predetermined consideration
rights

2 Usually involves a long-term duration, can also Involves a short-term duration, generally for 1 year
. be in perpetuity but up to 5 years at maximum (in Maharashtra)

The consideration can either be in the form of a

3 The consideration is usually in the form of a
one-time premium or as rent at periodic
. monthly license fee
intervals

License can be easily terminated by the Owners

4 The lease cannot be easily terminated by the
considering the temporary nature of the
. Owner
arrangement

Although there is a level of care required the

5 The maintenance and upkeep of the property is
burden of maintenance and upkeep of the property
. the duty/responsibility of the Lessee
falls on the owner

6 A deposit involved in the costs involved are

Relatively higher cost of the transaction
. usually quite less

The preferred mode of transaction for long-

7 Preferred mode of the transaction is short-term
term residential arrangements and commercial
. residential arrangements
setups

8 Documents involved are Agreement to Lease Document involved is a Leave and License
. or Lease Deed Agreement
STAGES OF A LEASE DEED
The entire transaction executing the Lease Deed can be broken down into the following
stages:

1. Negotiation Stage: This is the very first stage of the transaction and it comes into
effect right after the Lessee has identified a property suitable for his use. The
parties involved shall need to discuss the various commercial aspects of the deal
such as duration of the lease, consideration, mode of payment etc. The focus at this
stage is more on the commercial aspects rather than the legal aspects.
2. Preliminary Documentation Stage: Once the commercial aspects of the
transaction have been agreed upon, the parties involved can get into an Agreement
to Lease or preferably a Memorandum of Understanding recording the commercial
aspects of the deal and the broad duties and obligations of the respective parties.
This creation of an Agreement to Lease or Memorandum of Understanding is to
place on record the intention of the parties and thus allow the next stage of the
process.
3. Title Investigation or Due Diligence Stage: The focus of this stage is to verify
the Lessor’s title to the property and the Lessor’s ability to demise the property by
way of the lease in favour of the Lessee. This typically involves a thorough
reading of the title deeds, verification with the Government records by way of a
Title Search at the respective office and finally the issuance of Public Notices
inviting objections. The issuance of Public Notice is not mandatory and can be
avoided based on the situation. At this stage, it is also necessary to see what
permission are mandatory and the steps required to obtain the same.
4. Drafting and Payment of Stamp Duty Stage: The lease can be demised by way
of an Agreement to Lease however the preferred mode is a Lease Deed as it is not
contingent upon a future instrument. Once the document has been drafted taking
into consideration the various terms of the transaction and the draft approved by
the parties; the payment of stamp duty can be undertaken on the Lease Deed. Since
Stamp Duty is a State subject, let us consider an example of Maharashtra; an
Agreement of Lease needs to be stamped as per Article 25 of Schedule I whereas a
Lease Deed can be stamped as per Article 36 of Schedule I of Maharashtra Stamp
Act (Schedule I of The Maharashtra Stamp Act, 1958).
5. Execution and Registration Stage: This stage involves the payment of premium
by the Lessee to the Lessor. The parties can simultaneously exchange the
 consideration amount, take possession of the property and execute the Lease Deed.
Though not mandatory, it is accepted practice for two people to record their
signature as witnesses to the execution of the Lease Deed. Once the instrument has
been executed it can be put up for registration at the Office of the applicable Sub-
Registrar of Assurances having suitable jurisdiction over the property.
6. Post Registration Stage: Once the registration of Lease Deed is done and the
property is in possession of the Lessee, it is advisable that the various
governmental and semi-governmental bodies having jurisdiction over the property
be notified in writing about the change of holder. This would ensure a smooth
transition and make the process of making applications and acquiring Licenses
relatively easy.

DIFFERENCE BETWEEN LEASE DEED AND RENTAL

AGREEMENT
Based on the term and tenure of the agreement, the document can be termed as a lease deed
or rental agreement. Lease deeds and rental agreements are treated differently under the Laws
in force in India.

Lease Deed

Lease deeds are agreements entered for letting out of property for more than 12 months.
Lease deeds have to abide by strict rent control laws that are mostly favorable to the tenants.
Further, rental control laws currently prevent the landlords from overcharging the tenants and
protect the tenants from sudden or unfair eviction.  Also, the right to ownership of the
property gets transferred from the landlords to the tenants in case of a lease agreements,
making it harder for the landlord to vacate a tenant. Hence, most landlords do not prefer to
enter into registered lease deeds that are over 12 months.

Rental Agreement

Rental agreements on the other hand are entered into for a period of 11 months, with an
option to renew the agreement at the expiration of the agreement. As a rental agreement that
is 11 months long is just a license for the tenant to occupy the premises for a short duration,
rent control laws do not apply. Further, rental agreements that are 11 months long allow the
landlord to take more measures in case of eviction of tenant from the property. Hence, most
landlords prefer to enter into a rental agreement that is 11 months long, with an option to
renew at the end of the agreement period.

LEGAL ASPECT OF REGISTRATION:

According to the Section 107 of the transfer of property Act, 1882 and pursuant to section
sub-clause 1(d) of section 19 of the Transfer of Property Act, 1882 and Section 19 (1) (d) of
the India Registration Act, 1908 respectively it is mandatory to register the lease of an
immovable property for a term exceeding one year or in such as a system of yearly payment
of rent. . In case a lease deed is not registered then it should be mandatorily registered
otherwise the deed shall be treated as void.

PROVISONS REQUIRED TO DRAFT A LEASE DEED:

The lease deed must clearly state the following:

 The rent amounts and

 The time required to pay it
 The notice period for terminating the rent (mostly one month)
 The provisions for security deposit
 The penalty against damage of any property

MODEL DRAFTS OF A LEASE DEED:

The following is an example draft of standard lease deed and commercial lease deed is as
follows:

LEASE AGREEMENT

This Lease Agreement (“The Agreement”) is made and executed at Gurgaon on this ……..
day of ………………… 2012

BY AND BETWEEN
Mr. Manish Kishore son of Shri Vijay Krishna Sinha and Mrs. Russell Kishore wife of
Shir Manish Kishore both resident of Flat no. 2014, Plot no. 35, Great Lyall Pur CGHS Ltd.,
Sector – 10, Dwarka, New Delhi - 110075 hereinafter referred to as “Lessor” (which
expression shall unless repugnant to the context or meaning thereof be deemed to include its
successor or successors and assigns) of the FIRST PART ;

AND

M/s ALCOR SPA, a proprietorship firm having its office at 401, Sector – 9, Gurgaon –
122001, Haryana through its Proprietor Mr. Mohnish Sapra hereinafter referred to as ‘Lessee'
(which expression shall, unless it be repugnant to the context or meaning thereof, include the
successor or successors and permitted assigns) of the SECOND PART.

WHEREAS:

The Lessee has expressed its desire to take on lease, and the Lessor has agreed to lease a
commercial space being shop no. FF-23 on the First Floor admeasuring approximately
929.19 sq.feet. Super Built-up Area situated in Commercial cum Shopping complex known
as “MGF MEGACITY MALL” in and around Sikanderpur Ghoshi, Mehrauli Gurgaon
Road, Gurgaon 122002, Haryana..

The Lessor has agreed to lease the same to the Lessee on the terms and conditions recorded
hereunder.

NOW THEREFORE THIS LEASE AGREEMENT WITNESSETH AND IT IS HEREBY

AGREED BY AND BETWEEN THE PARTIES HERETO AS HEREUNDER:

TERMS OF LEASE:
The Lessee agrees to take on lease and the Lessor hereby agrees to lease a commercial space
being shop no. FF-23 on the First Floor admeasuring approximately 929.19 sq.ft of Super
Built-up Area in the said “MGF MEGACITY MALL” (hereinafter referred to as the
“Demised Premises”).

That in consideration of the monthly rent herein fixed and the other covenants herein
contained, the Lessor hereby agrees to grant to the Lessee a lease in respect of the Demised
Premises for a period of 9 years commencing after the fit out period of 60 days. The
Lease rent shall commence w.e.f. 01.03.2013

That the rent shall be subject to an escalation of 15% (Fifteen percent) every 3 (Three) years
over the last corresponding rental paid.

The Lessee shall have the right to terminate the lease by giving to the Lessor a 3 (three)
months written notice after the expiry of initial Lock-In period of 36 months commencing
after fit-out period of 60 days.

RENT, SECURITY DEPOSIT & MAINTENANCE CHARGES:

That the Lessee shall pay to the Lessor the rent of Rs. 65,973/- (Rupees Sixty Five Thousand
Nine Hundred Seventy Three only) per month (calculated @ Rs. 71/- per sq. feet. on super
built up area) in advance by the 7th (seventh) of the each calendar month by account payee
cheques, subject to deduction of tax at source and such other statutory deduction as shall be
applicable from time to time. The Lessee also agrees to pay the service tax as applicable on
the rental. The Lessee agrees that in case of the rent not being paid for more than a period of
2 (two) consecutive months, the Lessor shall be entitled to charge an interest @ of 18%
(eighteen percent) per annum for the delayed period. However, this liberty is given to the
Lessee for only once during the term of the Lease and on subsequent default of this nature the
Lessors shall be entitled to terminate this Lease Agreement in the manner stated hereinafter.

That the Lessee shall pay to the Lessor an interest free refundable security deposit of Rs.
1,31,946/- (Rupees One Lac Thirty One Thousand Nine Hundred Forty Six Only) equivalent
to Three (2) months lease rent in the manner hereinafter stated (“The Security Deposit”).

Out of the aforesaid security deposit, the Lessee has paid an amount of Rs. 65,973/- (Rupees
Sixty Five Thousand Nine Hundred Seventy Three only) at the time of signing of the Letter
of Intent as per below :

Cheque no. Dated Amount Drawn on

……………. ………………. …………………

…………………………

……………. ………………. …………………

…………………………

The lessee shall pay the balance security deposit amount of Rs. 65,973/- (Rupees
Sixty Five Thousand Nine Hundred Seventy Three only) on the date of signing of this Lease
Agreement as per the details mentioned below :

Cheque no. Dated Amount Drawn on

……………. ………………. …………………

…………………………

……………. ………………. …………………

…………………………
The aforesaid security deposit shall be refunded to the Lessee on the expiry of this Lease
agreement or earlier termination thereof and on simultaneous vacation of Demised Premises
and after adjustment of dues, if any, against arrears of Rent, Electricity charges, Water
charges, Common Maintenance/Mall Management charges and/or other dues, charges etc.
which may be due and payable by the Lessee for and or in connection with the premises.

That the Lessee shall pay the charges for maintenance and use of common areas including but
not limited to air conditioning, power back-up etc. in line with the other occupants of MGF
MegaCity Mall. In addition, the Lessee shall deposit a sum of Rs. 92,919/- (Rupees Ninety
Two Thousand Nine Hundred Nineteen only) @ Rs. 100/- (Rupees One Hundred only) per
sq. ft. of the super area with the maintenance agency as interest free refundable security
deposit and shall also enter into a separate Maintenance Agreement with the maintenance
agency. Provision of adequate air conditioning and power supply shall be provided to the
Lessee. The Lessee shall be liable to maintenance charges and service tax as applicable, from
the date of possession of the demised premises has been handed over to the Lessee for the fit
outs.

That in the event the Lessee does not vacate the Premises on the expiry of the Lease and
extended period of Lease, the Lessee shall be liable to pay damages to the Lessor at the rate
of Rs. 8,000 /- (Rupees Eight Thousand Only) per day for the period of illegal retention of the
Premises in addition to the lease rental and maintenance charges for the said period of illegal
retention. The same is without prejudice to the rights of the Lessor to recover the vacant
physical possession of the Demised Premises from the Lessee. All costs related to the said
acts relating to the Lessor’s recovery of the Demised Premises from the Lessee shall be made
good for by the Lessee.
USER:

(a) That the lease of the premises by the Lessor to the Lessee is for the purpose of the
lawful business of Optical products and accessories under the brand name “ALCOR SPA”
and matter connected herewith or incident or thereto.

(b) That the Lessee shall not carry out any prohibited, illegal or such business which may
be harmful either to the neighborhood or the “MGF MEGACITY MALL” building and if any
loss or damage is occasioned to any article or the “MGF MEGACITY MALL” building on
account of the Lessee’s negligence, the same shall be made good by the Lessee.

(c) The Premises shall be used by the Lessee for the purpose of operating and running a
shop /commercial establishment as permitted/permissible under the lease. The Lessee shall
not raise any objections in the event the Lessor sells/assigns/transfers the Premises to any
third party. The Lessee shall have no right to change the usage from retail to restaurant or any
other usage as the same would affect the air-conditioning load, regulatory requirements, and
it’s nominated authorized person, provision of CPT, financials etc.

STRUCTURAL REPAIRS:

That during the Term the Lessor and its nominated authorised persons shall have the right
and privilege to enter upon the Premises for inspections, repairs of any electrical equipment
or structure and/or repairing, laying or relaying any electric cables, water lines etc., which
may be passing or are to pass through the Premises and in the fair opinion of the Lessor are
required to be repaired or redone in the general interest and for proper use and enjoyment of
the Premises as well as for the structural stability of the Premises, in particular as well of
“MGF MEGACITY MALL” in general. The Lessor shall be entitled to do so by giving a 24
(twenty-four) hours notice in writing and carry out the repair or other works during that time
only, which gives minimum inconvenience to the Lessee.
5. UTILITIES:

The Lessor shall provide a maximum electricity load of 5 KW excluding air-conditioning

load in the Premises for which the Lessee shall pay charges as per the meter readings directly
to the authority/mall maintenance agency.

COMPLIANCE WITH BYE-LAWS:

That the Lessee shall fully comply with all such conditions, rules, regulations, bye laws and
orders etc. of all the Central / State Govt., local authorities or any other departments, builders,
society, Mall Management agency etc. as applicable to the Lessee or its business. The Lessor
shall not be responsible for non-compliance and any consequences thereof and the Lessee
shall keep the Lessor indemnified against any such claim, demand or actions caused due to
non-performance / compliance on the part of the Lessee.

MISCELLANEOUS:

That the Lessee shall be fully responsible for all its business operations including taxes
related to the activities involved in its business operations in the Premises and the Lessor
shall in no way be responsible for the same.
That the Lessor(s) shall be responsible for all taxes related to the property i.e. Property Taxes,
Municipal Taxes, House Taxes, Ground Rent etc. of the premises and the Lessee shall in no
way be responsible for the same.

No amendment of this Agreement shall be effective unless it is in writing and signed by both
the parties or by their duly authorized persons.

That in the event the rent / maintenance charges remaining unpaid by the Lessee for a period
of 2 (two) consecutive months from the date when the same is due, the Lessor shall have the
right to terminate this Agreement, provided the Lessor has given a written notice calling upon
the Lessee to pay the lease rent and the Lessee has not paid the rent/charges within 15
(fifteen) days of such written notice. This right is without prejudice to all or any other right
available to the Lessor under this agreement or under laws or otherwise and the Lessee shall
have no objection to it.

That in the event of the Lessee committing any breach under this Agreement or under the
maintenance agreement that is entered into between the Mall Maintenance agency and the
Lessee, the same shall be required to be rectified by the Lessee within 15 (fifteen) days of the
date of written intimation to the Lessee. In the event Lessee fails to rectify the said breach,
Lessor without prejudice to the other rights and remedies as available to it under law or
otherwise shall have the right to terminate this agreement and enter into the Premises by
serving 30 (thirty) days written notice onto the Lessee.

That if the Lessor during the Term of the Lease sells and/or transfers its rights in the Premises
to any person or persons / company then in that event this lease of the premises shall attorn to
such transfer on the same terms and conditions as contained herein in this Agreement. The
Lessor shall cause the new transferee / purchaser to confirm that the terms and conditions
contained herein, in this Agreement shall be binding on the transferee / purchaser and he/it
will also acknowledge the security deposit, paid by the Lessee to the Lessor the benefits
whereof shall be transferred to the new transferee / purchaser and all adjustment shall be
made accordingly. All other terms and conditions as mentioned herein and in the Agreement
shall remain unaltered and unchanged and shall remain the same for the new transferee /
purchaser. The Lessee would not be responsible for payment of any taxes, stamp duty,
charges etc in case the Lessor sells the property to another person . The buyer would be
responsible for payment of all such charges arising due to change in ownership.

That the Lessee shall execute all necessary documentation for taking possession for fit outs
and for taking possession of the Premises after payment of all dues as contained in part 2 (b).
The lessor would in turn make sure to take the possession from the developer after paying all
necessary charges related to the said property before handing it over to the Lessee.

The Lessee undertakes, assures and guarantees that he/it will not put any sign-board/name-
plate, neon-light, publicity material or advertisement material etc. on the face/facade of the
“MGF MEGACITY MALL” or anywhere on the exterior of the “MGF MEGACITY MALL”
or common areas but only at the places provided by the Lessor or the Mall Maintenance
Agency for the same. Further, the Lessee agrees to get prior approval of the Lessor in writing
in respect of format, type, design, size and lettering of the aforesaid sign-board/name-plate,
neon-light, publicity material or advertisement material etc. The Lessee shall also not change
the colour scheme of outer walls or painting of the exterior side of the doors and windows
etc. or carry out any change in the exterior elevation or design. The provisions of this clause
are equally applicable to and enforceable against any / all occupiers and/or subsequent lessee
of the Premises. The Non-observance of the provisions of this clause shall entitle the Lessor
to enter the Demised Premises, if necessary, and remove all non-conforming fittings and
fixtures at the cost and expense of the Lessee. The Lessee shall be responsible for any loss or
damages arising out of breach of any of the aforesaid conditions.

That the Lessee shall discard garbage from midnight till 8:00 AM and ensure that it is
separated into bio-degradable and non-biodegradable waste as per the norms laid down under
the relevant laws and as applicable to “MGF MEGACITY MALL”.
The Lessee shall have no objection to the Lessor raising finance/loan by creating a
Charge/Mortgage on the Premises.

The Lessee will not sublet or part with the possession of the Premises at any time of the
Lease period or its further extensions as mentioned herein and all obligations under the said
Agreement shall exclusively rest with the Lessee alone.

The Lessee shall strictly comply with all the provisions of the Prevention of Food and
Adulteration Act, 1954 and shall indemnify the Lessor from all claim, demand, penalty or
actions (civil or criminal) caused due to non-performance / non-compliance of the above Act
and shall indemnify against any loss or damage occurs due to non compliance of any
applicable statute.

8. INSURANCE:

That the Lessor shall get the Premises suitably insured comprehensively against fire, flood,
earthquake, riot militancy, etc. However, the aforesaid insurance by the Lessor shall not
cover the interior work, fittings, fixtures and equipments constructed, owned and installed
within the Demised Premises by the Lessee, which shall be the responsibility of the Lessee.

9. ALTERATIONS:

The Lessee shall be entitled to make and construct at its own costs and expenses any
additional fittings and fixtures in the Premises and other plant equipment, pipes, cables,
wooden partitions, screen, shelves, racks, sub-blinds and/or the fittings and thing without
thereby causing any damage to the Premises. On termination of the lease, the Lessee shall
restore the Premises to its original condition at its own costs and expenses, normal wear and
tear excepted. In case the Lessor so desires, it may request the Lessee not to restore the
Premises to its original condition but to leave the Premises as it is, with all the fittings and
fixtures in position, at the time of expiry and / or earlier termination of the Lease and the
Lessee may if it so wishes, leave the Premises with all fittings and fixtures in return for a
suitable compensation which has to be acceptable to the Lessee.

10. GOOD CONDITION:

During the Term, the Lessee shall keep the Premises in good repairable and tenantable
condition. The Lessee shall attend to all minor repairs but major repairs, including but not
limited to structural components, such as water and power distribution systems and other
electrical systems, pipe conduits, drains, cables and other facilities within the Premises shall
be carried out by the Lessor within the Premises.

11. NOTICE:

That any notice in terms of this Agreement by either Party will be in writing and will be
given at the address stated herein above by Registered A.D. post unless a different address
has been intimated in writing against receipt. Upon the receipt of any notice order, direction
or any other thing from any competent authority (including notices, affecting the rates, taxes
or other outgoings) in respect of the Premises payable in whole or in part by the Lessee, the
Lessee shall immediately deliver a copy of the necessary documents, etc., to the Lessor.

12. FORCE MAJEURE:

Both the parties shall not be liable for failure to perform or any delay in performing their
obligation under this Agreement when and to extent that such failure or delay is due to force
majeure. The term “force majeure” shall include, but not limited to accidents, fires, floods,
acts of God or the public enemy, embargoes, wars (declared or undeclared), riots, civil
commotion, interference by civil or military authorities, terrorist acts, Government actions,
order(s) or request(s), including (without limitation) certification, clearance or other
document, or any other cause or contingency beyond the control of the parties and in any of
the aforesaid events.

13. DISPUTE RESOLUTION:

In the event a dispute arises in connection with the validity, interpretation, implementation or
alleged breach of this Agreement, the Parties shall attempt in the first instance to resolve such
dispute through negotiation. If the dispute is not resolved through negotiation then either
party may refer the dispute for resolution to the Arbitration of a Sole Arbitrator in
consonance with the provisions of the Arbitration and Conciliation Act, 1996 or any
subsequent enactment or amendment thereto, and the decision of the Arbitrator shall be
binding upon the Lessor and the Lessee. The Lessor and Lessee shall appoint an arbitrator
within thirty (30) days of the receipt by such party of the other party’s request to initiate
arbitration. However, during the pendency of the dispute, in case the Lessee enjoys the
benefits of the Premises, the Lessee shall not stop payment of Rent and the other charges
mentioned herein. The seat of Arbitration shall be at Delhi. The provisions of this Article
shall survive the term/termination of this Agreement. Each party shall bear its own cost of
the arbitration.

14. JURISDICTION:

Subject to the preceding clause the parties agree to submit to the exclusive jurisdiction of the
competent courts in Gurgaon with regard to any question or matter arising out of this
agreement and other documents that may be executed by the parties in pursuance hereto or
arising here from.
15. REGISTRATION AND STAMP DUTY:

That the cost of stamping and registration related miscellaneous expenses of this agreement
will be borne equally by THE LESSOR and THE LESSEE

IN WITNESS WHEREOF the parties hereto have executed this at the day and year first
mentioned hereinabove.

Lessor(s) Lessee

______________________ _____________________

Manish Kishore son of Shri Vijay Krishna Sinha M/s ALCOR SPA

Russell Kishore wife of Shir Manish Kishore Prop. Mr. Mohnish Sapra

WITNESSES:

1.

Mr ABC

S/O PQR

D/No. 7-24
Pinnacle apartments

Hyderabad.

2.

Ms XYZ

D/O RTY

D/No 7308

Enchantment towers

Secundrabad

RECIEPT

Received with thanks from M/s ALCOR SPA. a sum of Rs. 1,10,000/ being the annual lease
rent for the 1st year of the lease of the Scheduled premises by way of __________________
___________________________________________________________________________

I say Received,

Manish Kishore.

COMMERCIAL LEASE AGREEMENT

This Commercial Lease Agreement (hereinafter referred as ‘Agreement’) was made at [.]on
this [.] day of [.], 20[.] (‘Effective Date’).

BY AND BETWEEN

Mr. [.], son of Mr. [.], aged [.] residing at [.], (herein after referred to as the “LESSOR”),
which terms or expression shall unless repugnant to the subject or context mean and include
his legal heirs, executors, successors, administrators, legal representatives and assigns of the
FIRST PART;

AND
Mr. [.], son of Mr. [.], aged [.] residing at [.], (hereinafter referred to as the “LESSEE”),
which terms or expression shall unless repugnant to the subject or context mean and include
his legal heirs, executors, successors, administrators, legal representatives and assigns of the
SECOND PART.

WHEREAS, the Lessor, is the owner of the premises bearing no. [.], having total area
measuring about [.] sq. metres, situated at [.], hereinafter referred to as the “Demised
Premises”.

AND WHEREAS, the Lessor has agreed with the Lessee to grant to the Lessee under the
terms of this Deed the Demised Premises with all fittings, fixtures and furniture installed
therein and as fully described in Annexure-I detailed hereunder annexed and forming part of
this Deed. The lessee has agreed to take on lease the same, subject to the covenants,
conditions and stipulations, hereinafter in these presents expressed and contained.

NOW IT IS HEREBY MUTUALLY AGREED BY AND BETWEEN THE PARTIES

HERETO AS FOLLOWS: 

The Term of Lease shall be for a fixed period of 11 Months which shall commence from the
effective date.

The Lease for the demised premises measuring is fixed as Rs. [.] ([.] only) per month.

The security deposit for the demised premises is fixed as Rs. [.](Rupees [.] only) which is
repayable at the termination of this agreement, without interest.

The Lease amount shall be calculated from the [.]of every month to [.] of the subsequent
month.

This Lease agreement shall be according to English calendar month, and the Tenant shall pay
the above said Lease amount for every month in advance on or before the [.] of every month
through CASH/CHEQUE/ECS/BANK TRANSFER to the Owner.

DECLARATIONS

The Lessor hereby declares that he is the absolute owner of the Leased premises being let out
to the Lessee and is lawfully entitled to execute this Agreement. And the Lessee hereby
declares that the premises in question shall only be used for the purposes of business of the
company and agrees that any other use of the property not authorized in advance in writing
by the Lessor shall entitle the Lessor to unilaterally terminate this Agreement.

LATE CHARGES AND FAILED CHEQUES

If Lease amount is paid after the fifth day of the month, then the Lease amount will be paid
along with late charges of [.] per each month. If any cheque given by Lessee remains unclear
due to any reason, then the Lessee will pay return cheque charges of Rs. [.]/- to the Lessor.

SECURITY DEPOSITS

Upon the execution of this Agreement, the Lessee shall pay the Lessor a security deposit of
Rs. [.]/- (Rupees [.] only) to be held as security for the payment of Lease amount and the due
compliance by the Lessee of all of its obligations in this Agreement. The total of the security
deposits with observance to the terms and conditions of this agreement shall be refunded to
the Lessee within 10 days after the premises have been completely vacated.

Lessor may deduct any amount necessary from the security deposit, and ask for further
payment from the Lessee of any amount necessary if such amount exceeds the value of the
security deposit, to cover the Lessee’s default in any/some/all of the following:

a. any unpaid Lease amount,

b. cleaning costs,

c. key replacement costs,

d. cost for repair of damages to premises and/or common areas exclusive of expected
ordinary wear and tear, and

e. any other amount legally allowable under the terms of this agreement.

A written accounting of said charges shall be presented to Lessee within 10 days of move-
out. If the costs are over and above the deposits the Lessee shall immediately pay said
additional costs for damages to the Lessor.

POSSESSION OF THE PREMISES

If Lessor is unable to deliver possession of the premises for any reason not within Lessor’s
control the Lessor will not be held liable for the same. The agreement is not void or voidable.
The Lessee do not have to pay any Lease amount until actual possession of the premises.

If Lessor is unable to deliver possession within 5 days after the agreed commencement date,
the Lessee may terminate this Agreement by giving written notice to Lessor. The Lessor must
refund all money and security deposits paid. The failure of Lessee to take possession of the
premises on the said date shall not relieve them of their obligation to pay Lease amount on
the agreed date.

INSPECTION OF THE PREMISES

Before the delivery of residency by the Lessee, the Lessor and the Lessee shall inspect the
premises and shall record any existing damages to the premises on a check list. (Annexure –
I). Both parties shall receive copies of the Document which should be duly signed by both the
parties.

At the termination of the agreement and before possession is restored to the Lessor, the
Lessor shall inform the Lessee of his right to be present at the final inspection. The Lessor
shall notify the Lessor of the time and date of the inspection, which must be within seventy-
two hours of the termination of occupancy.

DUTIES AND OBLIGATIONS

The Lessee hereby undertakes to not to sublet, assign or transfer the said Leased premises
whole or any part thereof to any other person or concern in any manner whatsoever, without
obtaining written consent from the landlord.

The accommodation under the lease shall be used as the registered office of the Company.

The Lessee shall not make any material addition or alteration to the accommodation under the
lease as let out without the previous consent of the owner in writing.

The Lessee shall not to do or cause to be done anything in or upon the demised Premises
which is or may grow to be a source or nuisance or annoyance to the Lessor.
The Lessee agrees to indemnify and hold harmless the Lessor for all its business activities
including but not limited to statutory dues, municipal taxes and other charges.

The lessee shall not bring or cause to be brought into or store at the Demised Premises or any
part thereof any hazardous goods articles of combustible or inflammable mature, except in
small quantities for normal uses as permitted by law nor carry out any activity which is illegal
in nature and not permissible by law.

The Lessee shall keep the premises let out to them in good condition and shall carry out all
minor repairs at his own cost and expenses.

The Lessee however, shall have the right to locate such fixtures and or fittings and wooden
temporary partition or structure as shall be required to execute partitions, chambers, office
rooms, etc. However, the Lessee agrees to vacate the property in the same condition he
received it in, carrying out repair work to cover up any alterations, permissible under this
clause, made by him during the period of the lease.

The Lessee further acknowledges that he received the premises in question in excellent
condition with freshly painted walls.

The Lessor shall have the right to enter and inspect the premises as per their convenience
during reasonable hours of business and the Lessee agrees to create no impediments for the
same.

The lessee here by agreed to pay the service tax if applicable.

MISCELLANEOUS

Notwithstanding any other provision of this agreement, the Lessor shall have the right to
terminate this agreement at any point of time during the period of the lease.

The provisions of this Agreement shall be governed by the Laws in force in the Union of
India, and any dispute arising from this Agreement shall be subject to the laws of [.].

The Courts in [.] shall have sole jurisdiction to entertain disputes arising from / out of / as a
result of this Agreement.

The Parties hereto agree that this Agreement shall be Registered in [.].
The Lessee will pay property taxes in respect of the demised premises due to the government
and corporation.

10. TERMINATION

The agreement may be terminated by either party by issuing a notice thirty days prior to the
agreed expiry of the Lease period. Where laws require "just cause", such just cause shall be
so stated on said notice. The Premises will be deemed vacated only after all areas including
storage are vacated by the Lessee and the property provided by the Lessor for the Lessee and
the keys returned to the Lessor. If the Lessee does not vacate within 4 weeks the Lessee is
liable to pay the Lessor additionally to cover the damages caused due to the owner’s loss of
prospective tenants.

11. EXTENSION OF LEASE

At the end of the period as stated in the agreement, the lease will automatically covert to
month to month. In the event of termination, a written notice must be served by the Lessee or
the Lessor to the other at least thirty days prior to the end of the agreement. If the Lessee
decides to continue, he will pay the monthly rental or decided otherwise and fulfil all other
obligations in the agreement.

12. CHANGE OF TERMS

The terms and conditions of this agreement are subject to future change by the Lessor after
the expiry of the Lease Period after issuing a thirty-day notice stating such change delivered
to the Lessee. All changes made will be as per the governing law in existence at the time of
the Notice.

14. SEVERABILITY

Each paragraph of this lease agreement shall be and remain separate from and independent of
and severable from all and any other paragraphs herein except where otherwise expressly
indicated or indicated by the context of the agreement. The decision or declaration that one or
more of the paragraphs are null and void shall have no effect on the remaining paragraphs of
this lease agreement.
15. ENTIRE AGREEMENT

This document constitutes the entire Agreement between the Lessee and Lessor. This
Agreement cannot be modified except in writing and must be signed by all parties. Neither
Lessor nor Lessee have made any promises or representations, other than those set forth in
this Agreement and those implied by law. The failure of Lessee or their guests or invitees to
comply with any term of this Agreement is grounds for termination of the agreement with
appropriate notice to Lessee and procedures as required by law.

IN WITNESSETH WHEREOF the parties hereto have herein unto set and subscribed their
respective hands on the day and year mentioned hereinabove.

Signed, Sealed and Delivered by:

LESSOR

___________________________

Name:

LESSEE

___________________________
Name:

In the presence of Witnesses:

1)__________________________

2)___________________________
IMPORTANT ASPECTS OF A WELL EXCUETED LEASE DEED:
Here is a checklist of key elements to consider and include when drafting a lease deed for
commercial purposes:  

1. Property Description: A detailed description of the property should be provided

along with the area, the exact location, respective Survey No.(s) etc. It is also
advisable to include a description of all the structures standing on the property
along with the list of all the fittings and fixtures thereon.
2. Term: The exact duration of the lease should be mentioned along with the
commencement date and expiry date.
3. Title Search: Proper Title Search should be conducted and public notices issued
to ensure that the Lessor is entitled to give the property on lease and that there is
no legal impediment in the property being demised in favour of the Lessee.
4. Lock-In Period to be mentioned if any.
5. Termination: The grounds for termination of lease like breach, non-payment of
rent, force majeure, failure to pay rent etc., to be included along with the agreed
process for termination by the parties and the notice period.
6. Rent Payment: The quantum of rent, the mode of payment, due dates, the
procedure for delay, rent escalation etc., to be discussed and reduced to writing.
7. Security Deposit, if any.
8. Maintenance Charges and Land Taxes: Who is responsible for payment of
maintenance charges, society charges, land taxes and other government charges?
Effect of non-payment and the process for dealing with that.
9. Utility Charges: It should be clearly defined whose obligation it is to pay for the
utilities such as water, electricity, telephone, internet etc and in whose name the
receipts are to be generated.
10. What are the permitted uses of the demised property?
11. Whose obligation is it to ensure the maintenance and upkeep of the demised
property and the procedure with repairs.
12. Restriction of material alteration of the property without the express consent of the
Lessor.
 13. Sub Letting: Whether sub-letting of the demised property is permitted and if so
then under what terms and only with the express approval of the Lessor.
14. Inspection of the demised property should be permitted by the Lessee at
reasonable hours and with prior notice.
15. Study the applicable law pertaining to the payment of Stamp Duty and
Registration of the Lease Deed and ensure that adequate payments are made and
the correct forum followed.
16. Legal Charges: Whose obligation is it to pay the Stamp Duty, Registration Fee
and other governmental and incidental charges in the transaction?
17. Procedure for the handover of possession at the end of the lease and the
execution of a Deed of Surrender of Lease, if applicable should preferably be
mentioned in the Lease Deed itself.
18. It is recommended that either of the parties get their own insurance cover on the
demised property to protect against any unexpected event.
19. Clearly identify the jurisdiction of the relevant Court and the dispute redressal
mechanism in the event of a dispute arising between the Lessor and Lessee.
20. Respective Indemnities: Ensure that there are adequate Indemnity clauses in the
Lease Deed to cover foreseeable incidents like defaults in payment of rent, damage
to property, breach of terms, wrongful representations and warranties, defect in
title etc.

CONCLUSION:
The paper gave an idea of lease and the difference between sale, license and lease and also
the difference between the lease deed and rental agreement. It gave an idea to draft a lease
deed and also the important things to look after during the drafting of lease deed. It discussed
about the importance of drafting a lease deed. The paper also discussed step to step process of
executing a lease deed.

A corporate lease deed needs to be drafted and scrutinized more thoroughly than a lease of
residential premises or tenancy as there are various aspects of commercial transactions of
commercial use of a property which are not present or do not have a very large role to play in
non-commercial transactions.
BIBILOGRAPHY:
 https://blog.ipleaders.in/draft-lease-deed/
 https://www.indiafilings.com/learn/lease-deed-format/
 https://www.scribd.com/document/260687152/Draft-Lease-Agreement-ALCOR-SPA
 https://www.lawnn.com/lease-deed/