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Lease dispute, Ardee Foundation, Hector Jose Neves Mascarenhas, Rent arrears, Eviction, Order XV-A CPC, Bombay High Court, Structural stability, Tenant rights, Landlord rights
01 Apr, 2026
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Ardee Foundation Vs. Hector Jose Neves Mascarenhas
As per case facts, Ardee Foundation, a trust (tenant), leased a property from Hector Jose Neves Mascarenhas and others (landlords) to establish a school. A lease deed was executed with
...a rent-free fit-out period and a lock-in period. During the fit-out period, the tenant discovered the building was structurally unsound and unsafe for habitation, leading them to terminate the lease prematurely. The tenant sought a refund of the security deposit and compensation, alleging misrepresentation by the landlords. The landlords, however, refused the termination and subsequently filed a suit for recovery of lease rents, later amending it to include a prayer for eviction. Both parties suffered financial hardship as the property remained unutilized for a considerable period, and possession was eventually taken by the landlords years after the initial dispute. The Civil Court directed the tenant to deposit a monthly amount towards arrears of rent. Both the tenant and landlords challenged this order in separate Writ Petitions, with the tenant seeking a reduction in the directed deposit and the landlords seeking a higher amount covering the entire period of alleged possession until actual handover. The question arose as to the extent of the Civil Court's discretion under Order XV-A of the CPC (High Court of Bombay Amendment) in determining the quantum of interim rent or arrears to be deposited by a tenant in an eviction suit, especially when there are serious allegations of misrepresentation, non-use of property, and a dispute over lease termination. Finally, the High Court directed the tenant to deposit half the arrears of rent for the period from the end of the fit-out period until the landlords took possession. The court allowed the tenant to adjust the security deposit with interest and a previously deposited amount against this liability. The High Court also noted that the ultimate issues of lease termination legality, misrepresentation, and damages would be decided by the Civil Court on its own merits without being influenced by the interim observations, and urged for an expedited trial.
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