In short. Rent a shop, showroom, office or warehouse purely for business, and any fight over it is a commercial dispute. If the claim over rent, eviction, a deposit or a lock-in is Rs 3 lakh or more, it goes to a Commercial Court. We wrote this page for landlords and tenants of business premises around Delhi NCR. Mediation normally comes first. That takes three to five months. If the case is then fought, expect one to three years, less where the facts are admitted. First, collect the lease, rent records and every notice. Then find out whether rent control law reaches your premises.
Is this your situation?
- Your tenant hasn't paid rent on the shop since Diwali. The shutter still goes up every morning, and he won't talk about leaving.
- The lease ran out months ago, or you ended it by notice. The tenant's still sitting there.
- You handed back the office keys in March. By April the landlord had stopped answering calls about your deposit.
- Your tenant walked out halfway through the lock-in, and you want the rent for the months that were left.
- The landlord cut the power to your shop last week and has hinted the shutter will be locked next. There's no court order.
- It started as an argument over CAM charges or the yearly escalation. Now it's about fit-out costs and who damaged the flooring as well.
- A mediation notice from the Legal Services Authority, or a suit over a commercial lease, has just landed on your desk.
When does a lease fight count as a commercial dispute?
The test is whether the dispute arises from an agreement about immovable property used exclusively in trade or commerce. That's straight from Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. A market shop usually passes. An office floor in Nehru Place, a highway showroom, a godown in an industrial area or a food court unit in a mall will normally pass too. A flat rented to a family won't.
Most arguments are about one word, "exclusively". The Supreme Court took a strict view of Section 2(1)(c)(vii) in Ambalal Sarabhai Enterprises v. K.S. Infraspace LLP (2020). It isn't enough that someone means to use the land for business one day. The property must actually be used, or be in use, for trade or commerce. A building that's partly someone's home isn't automatically commercial either. Picture a doctor renting a ground-floor clinic with the family flat upstairs, all under one lease. The other side will almost certainly challenge the Commercial Court's jurisdiction.
Value matters as well. The specified value has to be at least Rs 3 lakh, failing which the suit goes to the ordinary civil court, however obviously commercial the shop is. Most lease disputes clear that bar quickly. Arrears, mesne profits (what a tenant owes for using the premises after the tenancy has ended), interest and the deposit add up fast.
Check this first: does a rent control law cover the premises?
Before anything else, find out whether a rent control law applies. If it does, the case can leave the civil and commercial courts altogether. Most people skip this step entirely, and then find out months later that it decided the whole route. Don't.
Delhi is fairly simple. Section 3(c) of the Delhi Rent Control Act, 1958 takes out of the Act any premises whose monthly rent is above Rs 3,500, which today covers almost every shop and office lease in the city. Those tenants get no rent control protection. The landlord just files a regular suit for possession, arrears and mesne profits. Simple. The exceptions are old tenancies on very low rents, the kind you still find in Chandni Chowk or Karol Bagh. They may well be protected, and they go to the Rent Controller.
UP works differently. There, the Uttar Pradesh Regulation of Urban Premises Tenancy Act, 2021 reaches urban premises generally, shops and offices included, and gives tenancy disputes to the Rent Authority and the Rent Tribunal. Under Section 38, civil courts can't decide anything the Act hands to the Rent Authority. The Allahabad High Court has enforced that bar more than once. So an eviction from a Noida or Ghaziabad shop may have to begin before the Rent Authority. Not the commercial court. Some claims sit outside the Act, though, such as damages under a separate development or fit-out deal, and those may still go to the commercial court.
Haryana has the Haryana Urban (Control of Rent and Eviction) Act, 1973, with its own coverage rules and exemptions. Whether a Gurugram or Faridabad lease falls inside it depends on the building, when it was built and what the lease says. We check that against the actual papers. We don't assume.
The shop and office lease fights we see most
- Rent arrears. The tenant pays late, pays in bits or stops paying, and often keeps trading from the premises the whole time. The claim is for the arrears with interest.
- Possession after termination. The lease has run out, or the landlord has sent a notice ending it, and the keys aren't coming back. The landlord wants possession, plus mesne profits from the day the tenancy ended.
- Security deposit not returned. The tenant has moved out. The landlord holds on to the deposit, pointing to damage, an unpaid electricity bill or the lock-in clause.
- Lock-in period claims. The tenant leaves before the agreed lock-in is over, and the landlord asks for rent for every month that's left.
- Escalation, maintenance and CAM charges. Rows over the yearly rent increase, over common area maintenance in malls and office complexes, and over who was meant to pay property tax.
- Fit-out and rent-free period. The tenant put serious money into interiors on the strength of a long lease. Then the landlord ends it early, or won't execute the registered deed.
- Illegal dispossession. Locks changed overnight. Power or water cut, or goods carried out, with no court order anywhere in sight.
- Sub-letting and change of use. The landlord says the tenant sub-let, brought in a franchisee, or switched to another business without asking.
The provisions a court will look at
Section 106, Transfer of Property Act, 1882
Where the lease doesn't say otherwise, a lease for manufacturing purposes runs year to year and ends on six months' notice. A lease for anything else runs month to month and ends on fifteen days' notice. The notice has to be in writing and signed. Since 2003, a notice isn't invalid just because the period stated is short, as long as the suit is filed after the period the law requires has passed.
Sections 108, 111, 114 and 116, Transfer of Property Act
Section 108 fills in what the parties didn't write down. One default duty is that the tenant returns the premises in the state they were taken, fair wear excepted. Section 111 is the list of ways a lease comes to an end, like expiry, notice, surrender, or forfeiture after a breach. Under Section 114, a tenant facing forfeiture purely for unpaid rent can be saved if the arrears are paid along with interest and costs. Section 116 is the one that catches landlords out. Go on accepting rent once the lease is over and the tenancy may be treated as renewed.
Sections 17 and 49, Registration Act, 1908
A lease from year to year, or for more than one year, has to be registered. An unregistered lease can't be used to prove its terms. It can still be relied on for a collateral purpose, like showing what kind of possession the tenant had. In practice, an unregistered 3-year lease is often treated as a month-to-month tenancy. Its lock-in clause may be hard to enforce.
Order XII Rule 6 and Order XX Rule 12, Code of Civil Procedure, 1908
Order XII Rule 6 lets the court give judgment on admissions, without a trial. In an eviction suit, if the tenant admits the tenancy, the rent and that the termination notice was received, the landlord can ask for an early decree of possession. Order XX Rule 12 lets the court decree possession together with past and future mesne profits, and order an inquiry to fix the figure if it needs one.
Section 12, Commercial Courts Act, 2015
Section 12 is how the specified value gets worked out. A money claim is valued at the amount claimed plus interest. If the relief relates to immovable property, Section 12(1)(c) looks at the property's market value. Courts have disagreed over which figure applies when a landlord sues to evict. Don't shrug that off. It can decide whether you belong in the district court or the High Court.
Where to file: court, value and territory
Possession suits are filed where the property sits. That's Section 16 of the Code of Civil Procedure. A claim purely for money, a deposit refund for instance, has more options: where the defendant lives or does business, or where the cause of action arose. Many lease deeds say only the courts of a particular city will have jurisdiction. That clause can't create jurisdiction a court doesn't have. In a possession suit, the location of the premises decides it.
Delhi first. If the suit is worth up to Rs 2 crore, it's heard by the District Judge (Commercial Court) in whichever district the shop or office falls. South Delhi mostly means Saket. New Delhi means Patiala House. Central and West Delhi go to Tis Hazari, East and Shahdara to Karkardooma, the North West to Rohini, and the South West to Dwarka. Cross Rs 2 crore and you're in the Commercial Division of the Delhi High Court. There's been a proposal since late 2025 to raise the district court ceiling, so confirm the current limit before filing. How value is worked out is covered on our page about which commercial court will hear your case.
Outside Delhi, in Ghaziabad, Gautam Buddh Nagar (Noida and Greater Noida), Gurugram and Faridabad, each district has a designated Commercial Court. Appeals from the UP districts go to the Allahabad High Court and from the Haryana ones to the Punjab and Haryana High Court. Check rent control first. In UP especially, the Rent Authority may have to hear the case before any court does. An arbitration clause in the lease changes things again. Then an arbitrator may be the right forum, and the court side of that is on arbitrationlawyer.in.
How a landlord's case usually moves
This is the usual path for a landlord in Delhi who wants possession, arrears and mesne profits from a commercial tenant. A tenant chasing a deposit or damages follows much the same road, starting at the notice.
Go through the lease and the payment history
Look at the term, the lock-in, the notice clause, the escalation clause, and whether the deed was registered and stamped. Then make a month-wise statement of rent due and rent received. Most of the arguments later on come out of gaps in that statement.
Send a termination and demand notice
Terminate the tenancy properly, following Section 106 and whatever the lease says. Fix a date for handing over vacant possession, and claim the arrears and use and occupation charges from that date. Use registered post and email both, and save the tracking report. Eviction suits get stuck on careless notices more than on anything else. Our page on a legal notice for recovery of business dues covers what goes in one.
Apply for pre-institution mediation
Unless you need urgent interim relief, Section 12A of the Commercial Courts Act makes you apply for mediation through the Legal Services Authority before you file. It takes up to three months, and two more can be added with consent. Plenty of lease disputes end right here, with a date to vacate and a payment plan. See mandatory mediation before a commercial suit.
File the suit with every document
The plaint asks for possession, arrears, mesne profits and interest, and carries a statement of truth. Under Order XI as amended for commercial suits, every document in your power goes in with the plaint, with a list. Hold something back and you may not be allowed to use it later.
Ask for early orders
After the written statement comes in, look at an Order XII Rule 6 application if the tenant has admitted the tenancy, the rent and the notice. There's a second tool. Order XXXIX Rule 10 lets the court direct the tenant to deposit use and occupation charges while the suit is pending, and Delhi courts make that order often in shop and office cases.
Trial, decree and execution
Where admissions don't end it, issues are framed and there's a case management hearing under Order XVA, which sets the evidence timetable. Once there's a decree, possession comes through execution. The police help if the tenant resists. See execution of decree.
A tenant who's been sued has 30 days from service of summons to file a written statement. That can stretch to 120 days at most. After 120 days, the right is gone. Our page on the 120-day written statement deadline explains why commercial tenants can't be casual about it.
Time and costs in a commercial lease suit
| Stage | What happens | Usual time | Costs (apart from lawyer fees) |
|---|---|---|---|
| Notice and reply | Termination notice and demand, then the other side's reply | 15 days to 2 months | Postage and courier, nothing more |
| Section 12A mediation | Sessions at the Legal Services Authority, ending in a settlement or a non-starter report | 3 months, plus 2 if extended | A modest fee under the 2018 Mediation Rules, split between the parties. Ask the authority for the current figure |
| Filing the suit | Plaint, documents, statement of truth and court fee | 1 to 3 weeks to prepare | In Delhi, court fee for possession is generally worked out on one year's rent, plus ad valorem fee on arrears and mesne profits. Check the current schedule |
| Service and written statement | Summons served, defence filed | 30 days, outer limit 120 days | A small process fee |
| Admissions and interim orders | Judgment under Order XII Rule 6, deposit of use and occupation charges | 3 to 9 months from filing, where facts are admitted | Usually no separate court fee |
| Trial | Issues, case management, evidence by affidavit, cross-examination, arguments | 1 to 3 years if contested | Copying, typing and witness expenses |
| Mesne profits inquiry | Fixing compensation for the period the tenant stayed on | Can run alongside the decree or after it | Balance court fee on whatever amount is fixed |
| Execution | Warrant of possession, attachment for the money | 2 to 6 months, longer if objections come in | Process fees, plus bailiff and police assistance charges |
If you're the tenant: what you can claim, and what protects you
Tenants can go on the attack as well. The claim we see most from tenants is for the security deposit, which is often several months' rent, plus interest. If you fitted out the premises because the landlord promised a long lease, and then got pushed out early, you may have a damages claim for breach of contract under Sections 73 and 74 of the Indian Contract Act. Same rules as any contract. Our page on breach of contract covers how compensation is worked out.
The best protection you have is simple. No decree, no eviction. Changing locks, cutting the electricity, carrying goods out of the shop, all of it is illegal self-help. A tenant who's been thrown out can sue under Section 6 of the Specific Relief Act, 1963 within six months of dispossession and get back in without proving title. If the landlord is still only threatening, ask for an urgent injunction to protect possession. Because that relief is urgent, you can usually file without going to mediation first.
Know about Section 114 of the Transfer of Property Act too. Where the landlord seeks forfeiture only because rent wasn't paid, the court can relieve you if the arrears, interest and costs are paid. It won't help if your lease has simply expired. It does matter when the landlord is leaning on a forfeiture clause in a running lease.
Lock-in clauses and security deposits in court
Under a lock-in clause, the lease can't be ended during an initial period, either by anyone or just by the tenant. Tenants who leave mid lock-in usually face a claim for rent on every remaining month. Will a court enforce it? In a registered lease, yes, courts do. But they treat it as a claim for compensation under Section 74 of the Contract Act, which means the landlord may still have to show that the loss was real, and if the premises found a new tenant within a few weeks, the figure is likely to shrink a good deal.
An unregistered lease is a bigger problem. Section 49 of the Registration Act means it can't prove its own terms, and courts have often refused to enforce the lock-in in an unregistered deed for more than one year. The landlord may end up with just a month-to-month tenancy and notice-period rent. That's all. Whenever Advocate B.K. Singh looks at a lock-in claim, two questions come before anything else. Was the deed registered? And did the landlord try to re-let?
On deposits, the landlord can deduct genuine unpaid dues: rent, electricity, water, maintenance, and the cost of fixing damage beyond normal wear. A flat refusal to refund is harder to defend. So is a charge for repainting a shop that was handed over as a bare shell. Keep the handover photos and the joint inspection note. In our experience they settle more deposit fights than any argument in court.
Section 12A mediation in lease disputes
Lease fights suit mediation better than most. Usually both sides want out cleanly, with the tenant needing a few weeks to move stock and staff and the landlord wanting the keys back along with some of the money. It's a deal waiting to be done. A settlement can set the vacating date, a payment schedule and what happens to the deposit, and under Section 12A it carries the status of an arbitral award. That makes it enforceable like a decree.
Don't skip it. The Supreme Court's 2022 ruling in Patil Automation v. Rakheja Engineers means a suit filed without mediation, where there was no genuine need for urgent interim relief, can be thrown out under Order VII Rule 11. Landlords wanting possession and arrears almost never need urgent relief in the legal sense. For them, mediation is effectively compulsory. A tenant about to be forcibly evicted is another matter.
Mediation time doesn't count towards limitation. For rent arrears you get three years from the date each month's rent fell due (Article 52 of the Limitation Act, 1963). For possession, a landlord has twelve years from the date the tenancy came to an end (Article 67). The twelve years rarely matter. The three years do. Any month's rent that's older than three years on the filing date, without a written acknowledgment, is usually lost for good. Acknowledgments and part payments can restart the clock, and our guide on time limits to recover unpaid dues shows how.
Papers to keep ready
If you're the landlord
- The lease deed or leave and licence agreement, with registration and stamp duty details
- Title papers or other proof that you own the premises
- The rent ledger, bank statements showing rent coming in, rent invoices and GST records
- TDS certificates (Form 16A) the tenant issued, which often prove both the rent and the tenancy
- The termination notice, postal receipts, tracking reports and any reply
- Emails and WhatsApp messages about arrears, extension or vacating, with a Section 63 Bharatiya Sakshya Adhiniyam certificate for the electronic records
- Photos of the premises with the business running from it
- Evidence of market rent for mesne profits, such as recent leases in the same market
If you're the tenant
- The lease deed and any side letters about the rent-free period, fit-out or lock-in
- Proof that you paid the security deposit, and of every rent payment
- Fit-out invoices and proof of payment, if you're claiming damages
- The handover letter, the joint inspection report, and photos or video from the day you moved in and the day you left
- A receipt for the keys, or courier proof that you sent them back
- Letters and messages to the landlord about repairs, disconnection or threats
- A copy of the police complaint, if you were forcibly thrown out
An invented example: the showroom tenant who stopped paying
This one is invented. A landlord owns a ground-floor showroom in a South Delhi market. He's let it to a furniture retailer under a registered five-year lease at Rs 2.4 lakh a month. Sales slump in year three, and for four months the tenant pays nothing at all, though the showroom stays open every day and the staff keep selling sofas. Not a rupee.
The landlord sends a notice ending the tenancy and asking for possession within fifteen days, plus arrears and use and occupation charges. The tenant replies that the landlord had promised a rent cut on a phone call. The landlord applies for mediation through the District Legal Services Authority. Two sessions happen. The tenant offers half the arrears but wants another year in the showroom, and the landlord says no. A non-starter report is issued.
So the landlord sues in the commercial court at Saket. He asks for possession, roughly Rs 9.6 lakh in arrears, mesne profits at market rate running from the termination date, and interest. The tenant's written statement admits the lease is registered, admits the rent figure and admits the notice arrived. Then it repeats the phone-call story. That's enough for the landlord to move under Order XII Rule 6. He also files a separate application under Order XXXIX Rule 10 asking that use and occupation charges be deposited. The court has two obvious options. It can decree possession on what's admitted and send the money claims to trial, or it can direct deposits while the suit continues. Whichever it picks, a promise made on the phone doesn't stand up well against a registered deed and months of TDS certificates for the full rent.
None of this predicts anything. Real cases turn on the papers, the judge, and how both sides behave.
What usually goes wrong
- Accepting rent after terminating. Keep taking rent after the termination date and you've handed the tenant a Section 116 argument that the tenancy was renewed. Take money only as use and occupation charges. Say so in writing, every time.
- A notice that doesn't actually end the tenancy. Notices that only demand arrears, or give a woolly date, leave the tenancy alive. The possession suit then fails, or waits for a fresh notice.
- Leaning on an unregistered long lease. The landlord drafts a 9-year lease, never registers it, and finds out later that the lock-in and escalation clauses can't be proved.
- Self-help. Cut the power or change the locks, and a strong landlord case turns into a police complaint and a tenant's injunction suit.
- Ignoring the forum question. A commercial suit filed in UP where the Rent Authority has exclusive jurisdiction, or in Delhi for a protected old tenancy, just burns months.
- Tenants missing the 120-day limit. Some tenants keep asking for adjournments to talk settlement and never file a written statement. They can lose the right to defend altogether.
- No exit evidence. Hand back the keys without a receipt or photos, and the deposit fight gets much harder than it needed to be.
How it plays out for different kinds of business
Individual landlords with a shop or two usually care more about getting possession and a clean slate than about every rupee of arrears. Mediation with a firm vacating date often suits them better than a three-year trial. Property companies and mall owners are different. With many tenants, one tenant's settlement terms become the next tenant's demand, so they tend to fight over the clause and not just the case.
Retail chains and restaurant groups sit on the tenant side with heavy fit-outs and lock-ins that often bind both parties. What they fight about is usually early exit, rent relief for periods the outlet was shut, and deposits that run into several lakh. Coworking startups are a different case. Most are licensees, not tenants. A leave and licence agreement gives them no interest in the property, so their remedies are mostly contractual. Even so, once a deposit or lock-in dispute crosses Rs 3 lakh, it's a Commercial Court matter.
MSMEs running a unit from a leased shed in Okhla, Sahibabad, the Noida sectors or the Gurugram and Faridabad industrial belts face one particular risk. A lease for manufacturing purposes that says nothing about notice runs year to year, and needs six months' notice to end. Landlords who send a fifteen-day notice to a factory tenant often have to start over. It happens more than you'd think.
Defending a lease suit
Served with a suit? Find the date of service before anything else. Your 30-to-120-day window for the written statement starts then, not when you finally got round to opening the envelope. The defence must go paragraph by paragraph through the plaint, saying plainly what you admit and what you deny. Under the amended Order VIII, a bare denial counts as an admission. We see commercial tenants caught by this all the time, usually after filing a short, general reply.
There are genuine defences. Notices are often defective. Rent control law may still protect the tenancy. The landlord may have taken rent after the termination date, or renewed the lease in a letter he's now forgotten about. Mesne profits are frequently claimed at a figure well above what the market pays, and deposit deductions are sometimes pure invention. A tenant with a real money claim of its own, like fit-out costs the landlord agreed to reimburse, can bring it as a counter-claim in the same suit. When tenants bring their defence to Advocate B.K. Singh, the law is rarely the weak point. The paperwork is. Rent paid in cash with no receipt, a promise nobody wrote down. Our page on defending a commercial suit walks through the whole timeline.
What to do this week
If you're the landlord, don't take any more rent without a written reservation. Pull out the lease and rent record and read the registration and notice clauses. Leave the locks alone. If you're the tenant, write to the landlord recording the dates and amounts you dispute, take photos of the premises, and put all your payment proofs in one file. And whichever side you're on, check whether rent control law or an arbitration clause changes the forum. Do that before paying for a suit.
Most of the lease disputes we see are decided by papers created long before anyone thought of court. If you'd like your lease, rent record and notices checked before you send a notice or answer one, share them with Advocate B.K. Singh's team through the contact page.
Frequently asked questions
Is a shop rent dispute a commercial dispute?
Yes, provided the shop is used only for business and you're claiming Rs 3 lakh or more. Section 2(1)(c)(vii) of the Commercial Courts Act brings in agreements about immovable property used exclusively in trade or commerce. Mixed use is shakier ground. Part home, part shop may not qualify.
Can a landlord evict a commercial tenant in Delhi without going to the Rent Controller?
Yes, where the monthly rent is more than Rs 3,500. The Delhi Rent Control Act doesn't reach those premises. The landlord ends the tenancy by notice and sues for possession in the civil or commercial court. Old tenancies on low rents can still be protected. Those go to the Rent Controller.
How much notice is needed to end a commercial lease?
Start with what the lease says. If it's silent, Section 106 of the Transfer of Property Act gives six months' notice for a lease for manufacturing purposes and fifteen days' notice for other leases. Either way, the notice must be in writing and signed.
Is mediation compulsory before a suit against a commercial tenant?
In most cases, yes. Unless the suit genuinely needs urgent interim relief, Section 12A of the Commercial Courts Act requires pre-institution mediation first. Suits for possession and arrears hardly ever qualify as urgent, and plaints filed without mediation have been rejected.
My landlord is not returning my security deposit. What can I do?
Write to the landlord demanding it. Set out the deposit amount, the date you handed over and any deductions you're willing to accept. At Rs 3 lakh or more, apply for mediation, then file a commercial suit for the refund with interest. Under Rs 3 lakh, it's an ordinary civil suit.
Can a landlord recover rent for the lock-in period if the tenant leaves early?
Often, if the lease is registered. Courts see it as compensation under Section 74 of the Contract Act, though, and can reduce it, say where the premises were re-let quickly. In an unregistered lease of more than one year, the lock-in may not be enforceable at all.
What are mesne profits in a commercial tenancy?
It's what a tenant owes for staying in the premises after the tenancy has ended. The usual measure is market rent, often well above the rent in the old lease. Under Order XX Rule 12 of the CPC, the court can award both past and future mesne profits.
My landlord locked my shop without a court order. Is that legal?
No. Eviction needs a decree, executed through the court. Go to the police with a complaint. You can also sue for possession under Section 6 of the Specific Relief Act within six months, and ask the court for an urgent injunction.