Lease of Jute Mill
This lease is made between XY Jute Mill Co. Ltd., a company registered under the Companies Act 1956 having its registered office at ………… ………………… (hereinafter called the LANDLORD which expression shall where the context so admits include its successors and assigns) of the First Part and AB Co. Ltd., a company registered under the Companies Act 1956 having its registered office at ……………………………… (hereinafter called the TENANT which expression shall where the context so admits include the TENANT’s successors and permitted assigns) of the Second Part and EF Co. Ltd., a company registered under the Companies Act 1956 and carrying on business at ………………………………… (hereinafter referred to as the SURETY which expression shall include its successors) of the Third Part.
WHEREAS the LANDLORD is carrying on business as manufacturer of and dealer and exporter in jute goods at ……………………… for the last 30 years.
And WHEREAS the LANDLORD is seized and possessed of the said XY Jute Mill along with the land in which the Mill is situate and has a good Title thereto.
And WHEREAS the main promoter of the said XY Jute Mill Co. Ltd. intends to concentrate on his business in England and desires to leave India as soon as circumstances permit.
And WHEREAS there are no other competent person at the moment to look after and run the XY Jute Mill in the absence of the main promoter.
And WHEREAS the TENANT is carrying on business as manufacturer of and dealer in and exporter of jute goods in its own Mill and can conveniently utilise the capacity of XY Jute Mill Co. Ltd.
And WHEREAS there have been discussions and negotiations between the LANDLORD and TENANT whereby the LANDLORD has agreed to let out the Mill premises along with the Mill comprising of plant, machinery, fittings and fixtures on monthly rental basis and the TENANT has agreed to take on rent the said Mill as a going concern and to run the Mill and keep the plant and machinery in working condition.
And WHEREAS the parties intend that if the TENANT can run the Mill successfully the LANDLORD will ultimately sell the same to the TENANT.
And WHEREAS the LANDLORD has agreed to meet the liabilities of the said XY Jute Mill Co. Ltd. from the rent that might be paid by the TENANT and that the TENANT will have no responsibility to the creditors and bankers of the LANDLORD.
And WHEREAS it has been agreed between the LANDLORD and its creditors including bankers that they will not proceed against the assets of the Jute Mill and will get their payments out of the rents receivable by the LANDLORD and that they will not disturb the running of the Mill by the TENANT so long as the TENANT goes on paying the rent regularly fixed herein.
And WHEREAS the SURETY has guaranteed the timely payment of the rent by the TENANT which the surety under its Memorandum of Association and Resolution of the General Meeting is authorised to do.
Now these presents witnesseth and the parties hereby agree as follows:
1. The LANDLORD hereby demises unto the TENANT all those premises described in the First Schedule hereunder being premises No. …………… …………… being the Jute Mill with all structures, sheds, plant, machinery, fittings, fixtures, furniture, privileges appurtenant thereto (hereinafter called the “DEMISED PREMISES”) with all permits, licences, consents and rights set out in the Schedule except those reserved and mentioned in the Schedule to hold unto the TENANT for a term of 15 years from January 1999 paying therefor in advance by monthly instalments on the first day of every month Rs. 1 lakh the first payment to be made on the execution hereof and thereafter by the first day of every month and also paying by way of additional rent a sum representing the interest @ 15% per annum or the prevailing commercial bank rate whichever is higher on the due date for rent payment on the arrears of rent by more than 7 days from the date on which the payment fell due until payment is made in full. Such rent shall be enhanced by 10% every 3 years and such increased rent shall be payable by the TENANT as aforesaid.
2. The TENANT hereby agrees and covenants with the LANDLORD as follows:
(a) To pay such rent at the time and in the manner aforesaid;
(b) To pay all rates, taxes, assessments and outgoings of a periodically recurring and non-capital nature payable in respect of the demised premises during the term of the tenancy except, however, the outgoings as the owner is by law bound to pay notwithstanding any contract to the contrary.
(c) To pay all charges for gas, electric current and telephone services including rent supplied to or used on the demised premises during the tenancy. The metre readings at the commencement of the tenancy are electric current 1001 and gas 501.
(d) To keep the whole and every part of the demised premises the Jute Mill with all plant, machinery fittings and fixtures in good substantial repair and condition and properly operative and productive throughout the said term.
(e) To obtain and keep renewed in force all Licences, permits, entitlements, as are in force and that might be required by any law and observe all formalities and statutory requirements so that the Mill may run smoothly.
(f) To permit the LANDLORD and its agents at all reasonable hours in the day time to enter upon and inspect the condition of the DEMISED PREMISES and to give notice in writing to the TENANT of all defects found which the TENANT is liable to make good under the covenants hereinbefore contained and if the TENANT does not proceed diligently within 60 days of such notice to repair and to make good all defects, then to permit the LANDLORD to enter the demised premises with labourers to execute such repairs, the cost of so doing to be payable by the TENANT on demand and if not so paid the amount to be recoverable as if the same were rent in arrears.
(g) To permit the LANDLORD and its agents with all necessary workmen and equipment at all reasonable times to enter the demised premises for the purposes of carrying out the repairs to the adjoining property of the LANDLORD provided that except in case of emergency the LANDLORD shall give not less than 48 hours notice of his intention to exercise such right and shall make good all damage caused by such entry.
(h) To pay on demand a proportionate part of cost of repairing, maintaining, cleansing and replacing all roadways, sewers, drains, gutters, pipes, wires, and cables and electrical, water and other services and things which serve the demised premises jointly with other property of the LANDLORD.
(i) To keep such parts of the DEMISED PREMISES as are not built upon in a proper and neat order and condition and not to store anything on them.
(j) To insure and keep insured the DEMISED PREMISES to their full reinstatement value thereof with an Insurance Company approved in writing by the LANDLORD in the joint-names of the LANDLORD and the TENANT against loss or damage by fire, explosion, storm, flood and earthquake including the surveyor’s fees and loss of two years’ rent and such other risks as may from time to time be required in writing by the LANDLORD and upon the request of LANDLORD to produce the Policy and the receipt for the last premium and cause all sums received to be forthwith laid out and expended in rebuilding or repairing or otherwise reinstating the demised premises in accordance with the building plan or otherwise as may be approved in writing by the Landlord and to make up any deficiency in the Insurance money out of Tenant’s own funds.
(k) To deliver to the LANDLORD a copy of every notice relating to the demised premises served on the TENANT by any competent authority and comply with the requirements thereof.
(l) To execute or cause to be executed or done all such works and things as under any law directed or necessary to be done or executed and not to do or permit or suffer to be done any such act, matter or thing as contravenes such law and at all times to keep the LANDLORD indemnified against all claims, proceedings, demands and liability in connection therewith.
(m) To keep in force all licences, permits, sanctions, quotas, export rights and entitlements of the Mill and preserve unobstructed all rights of light and other easement appertaining to the DEMISED PREMISES in any way and at all times to afford to the LANDLORD such facilities and assistance as may enable the LANDLORD to prevent the acquisition by anyone of any right of light or other easement over the DEMISED PREMISES.
(n) Without prior written permission of the LANDLORD not to assign, underlet or otherwise part with possession of the DEMISED PREMISES or any part thereof.
(o) When Landlord’s consent has been obtained the TENANT to give notice to the LANDLORD in writing setting forth the name, address and description of the assignee or person in whose favour the devolution has taken place and to produce the Instrument of Assignment or Devolution.
(p) Without the consent of the LANDLORD the TENANT shall not erect or permit to be erected on the demised premises any building or erection, boundary walls or fences and not to make or allow to be made any alterations or additions in the DEMISED PREMISES.
(q) Except within the DEMISED PREMISES the TENANT shall not part or permit the parking of any cars, bicycles or vehicles by its servants, visitors or agents or customers not to deposit any materials on or otherwise obstruct any roadway adjoining to or forming a part of the Landlord’s adjoining property nor permit any loading or unloading to be carried on therefrom.
(r) Not to discharge any noxious matter or trade waste or effluent from any building or drain on the demised premises into the sewers of the LANDLORD which has or may have an injurious effect on the sewage therein or the said sewers or the local sewerage disposal works or the water flowing through the said sewers.
(s) Not to store or bring upon the DEMISED PREMISES articles which are combustible inflammable or of dangerous nature and not to do or permit or suffer anything to be done by reason of which any insurance on the building or the adjoining property may be rendered void or voidable or whereby the rate of premium thereon may be increased.
(t) To ensure that none of water, electricity, gas, telephone and other services serving all or any of the DEMISED PREMISES and the Landlord’s other adjoining property are obstructed, terminated, diverted or interfered with in any manner.
(u) Not to use or permit to be used the DEMISED PREMISES or any part thereof for any trade or business other than the existing business.
(v) Not to do or suffer to be done on the DEMISED PREMISES anything which might be a nuisance or annoyance to the LANDLORD or to its TENANTS or other owners or occupiers of the adjoining lands thereof and not to use nor permit to be used the demised premises for any illegal, immoral or improper purposes.
(w) Without prior written approval of the LANDLORD the TENANT shall not affix or display or permit on the DEMISED PREMISES fixing or displaying any advertising sign or notice.
(x) To indemnify the LANDLORD against all proceedings, costs, claims and demands in respect of any injury or death of any person and any damage to any property or destruction of any right, easements or privileges that might arise directly or indirectly from the condition of the DEMISED PREMISES.
(y) To bear and pay all costs and expenses incurred or that might be incurred by the LANDLORD in connection with or incidental to the preparation of the lease and the counterpart thereof and any application for any approval or consent to any authority concerned whether or not any right of re-entry or forfeiture has been waived by the LANDLORD.
(z) On the expiry or sooner determination of the said term, the TENANT to yield to the LANDLORD the demised premises with all the buildings and additions made thereto in the meantime and all plant, machinery, fixtures in such good and substantial repairs and condition including any additions thereto.
3. The LANDLORD hereby covenants that the TENANT paying the said rent and observing and performing all obligations statutory and under this agreement may quietly enjoy and run the Mill, the demised premises, without any interruption by the LANDLORD.
4. The parties hereby agree and declare that:
(a) Whenever the said rent or any part thereof is in arrear for two months, whether demanded or not, or if the TENANT becomes insolvent or makes any arrangement with its creditors or commits any breach of any of the provisions herein contained then the LANDLORD may re-enter upon the DEMISED PREMISES with benefit of all licences, permits, entitlements, quotas and rights relating to the Mill and thereupon the tenancy hereby created shall stand determined but without prejudice to any remedy for any antecedent breach by the TENANT of any of the provisions hereof.
(b) In the event the DEMISED PREMISES or any part thereof are destroyed or damaged by any cause other than the act or default of the TENANT or his visitors or servants and are not re-built or restored within twelve months after the happening of such destruction or damage, then the rent hereinbefore reserved or a fair and just proportion thereof according to the nature and extent of damage shall be suspended during the period the demised premises or the destroyed or damaged part thereof remain unfit for use by reason of such damage or destruction.
(c) The TENANT shall not become entitled to any easement or right which would restrict or interfere with the free use of any adjoining property of the LANDLORD by the LANDLORD or any person deriving title under the LANDLORD for building or for any other purposes.
5. The SURETY hereby covenants with the LANDLORD that the TENANT shall pay the rent hereby reserved on the days and in the manner aforesaid and shall perform and observe all the Tenant’s covenants hereinbefore contained and that in the case of default in payment of such rent or the performance and observance of such covenants as aforesaid, the SURETY shall pay and make good to the LANDLORD on demand all losses, damages, expenses and costs arising or incurred by the LANDLORD, provided always and it is hereby agreed that any neglect or forbearance of the LANDLORD in endeavouring to obtain the payment of rent when the said becomes payable or entitled to the performance of the several stipulations herein on the tenant’s part contained or any time which may be given to the tenant by the LANDLORD shall not release or exonerate or in any way affect the liability of the SURETY under this covenant.
6. It is further agreed as follows:
(a) if the TENANT is desirous of purchasing remainder of the rights of the LANDLORD, the TENANT shall give six months’ notice to the LANDLORD before expiry of the term of the lease hereby granted then the LANDLORD shall on the expiry of the notice and upon payment of a sum to be mutually agreed convey the demised premises to the TENANT or as it directs free from all encumbrances;
(b) the TENANT has already investigated the title of the landlord to the demised premises and accepted by him;
(c) the sale shall be made in all other respects as might be mutually agreed to.
In witness whereof the parties hereof put their signatures and seals and execute these presents on this 5th day of November 1999.
Signed, sealed and delivered by
Mr. ……………………… pursuant to a
Board Resolution of XY Jute Mill Co. Ltd.
dated 10th January 1999 in the
presence of: Signature
Signed, sealed and delivered by
Mr. ……………………… pursuant
To Board Resolution
dated 7th January 1999 of AB Co. Ltd.
in the presence of: Signature
Signed, sealed and delivered by
Mr. ……………………… pursuant
to the Board Resolution
dated 10th January 1999 of EF Co. Ltd.
in the presence of: Signature