RE: LEGAL OPINION IN CONNECTION WITH THE LEASE
We refer to your letter dated 21.06.2005 on the above subject.
We have perused the contents of your letter and the documents enclosed therewith. It appears from the documents/papers referred to us that Mr. X has been vested with the possessory right of 8(eight) shops, measuring in total 2250 square feet (approximately) being No. 339/B-12, B-13, B-14, B-15, B-16, B-17, B-18 & B-18A, situated on the ………… vide several Lease Agreements (Lease Agreements) executed by Ms. A (Original Lessor).
It also appears from the terms of the Lease Agreements executed between Ms. A and Mr. X that:
- All the Lease Agreements are effective for three years, i.e. upto 17.04.2008, which are renewable at the option of First Lessee, i.e. Mr. X; and
- The First Lessee, i.e. Mr. X can transfer the aforesaid shops upon intimating the same to the Original Lessor,i.e. Ms. A.
In such situation the matter has been referred to us for our opinion as to whether the BANK 1 (the “Bank”) may take lease of the above space..
Our opinion is as follows:
Note that, our law does not recognise any possessory right. Rather any possessory right is treated as tenancy. In the premises, any subsequent lease under the same right shall be treated as sub-lease.
In the instant case, the Lease Agreement do not expressly provide any conditions as to the power of sub-lease by Mr. X. As such, we are of the view that the Bank, before entering into any sub-lease agreement with Mr. X, should ask Mr. X to obtain a written permission from the Original Lessor as to sub- lease.
It appears that the Bank is intending to take lease of the premises for 10(ten) years. We are of the view that the sub-lease in question cannot be of a term more than the term provided under the original Lease Agreement. The tenure of the original Lease Agreements will expire on 17.04.2008.
In the premises we are of the view that subject to the obtaining of permission as aforesaid, the Bank may initially enter into a sub-lease agreement with Mr. X for a validity upto 17.04.2008. In the sublease agreement a term should be incorporated to the effect that the term of the sub-lease agreement shall be extended in the line of the original Lease Agreement.
We are waiting for your further instructions in this regard. Upon obtaining your further instructions, a draft of sub-lease agreement shall be sent to you.
Should you have any further query, please revert back to us.
For: “The Lawyers & Jurists”