COLD STORAGE LEASE AGREEMENT
BETWEEN
__________, __________, of __________, PAN __________ (the "Lessor", which expression includes its successors in interest and permitted assigns);
AND
__________, __________, of __________, PAN __________ (the "Lessee", which expression includes its successors in interest and permitted assigns).
The Lessor and the Lessee are each a "Party" and together the "Parties".
RECITALS
B. The Lessee has requested a lease of the Premises, comprising the cold storage facility and the Cooling Plant described in Schedules II and III, for its business, and the Lessor has agreed to grant one on the terms set out below.
C. The Parties intend this Deed to create a lease within the meaning of s.105 of the Transfer of Property Act, 1882, transferring to the Lessee the right to exclusive possession of the Premises for the Term, and not a licence. The Parties further record that the Lessee will store its own goods at the Premises, so that this Deed does not make the Lessor a bailee of the Lessee's stock under ss.148 to 171 of the Indian Contract Act, 1872, as clause 13 states.
D. The Term of this lease exceeds one year and reserves a yearly rent. The Parties accordingly execute this Deed as a registered instrument, as s.107 of the Transfer of Property Act, 1882 requires, and shall have it registered under s.17(1)(d) of the Registration Act, 1908.
E. Three provisions of this Deed each identify the place in which the Premises lie — Recital A and Schedule I, the stamp duty computation in clause 23.2, and the rent statute identified in clause 25.1. The Parties confirm that they have read those three provisions together before executing this Deed and that each of them describes the same jurisdiction.
NOW THIS DEED WITNESSES as follows.
- 1. DEFINITIONS
1.2 "Term" means the period stated in the Grant clause.
1.3 "Rent" means the monthly rent stated in the Rent clause, as escalated from time to time under this Deed.
1.4 "Security Deposit" means the deposit stated in the Security Deposit clause, as topped up under this Deed.
1.5 "Cooling Plant" means the compressors, condensers, evaporators, refrigerant system, defrost and monitoring equipment described in Schedule III, together with any replacement or addition to them during the Term.
1.6 References to a statute are to that statute as amended or re-enacted, and include a statute as extended to the place where the Premises are situated. Headings do not affect interpretation. The singular includes the plural.
- 2. GRANT AND TERM
2.3 The Lessor shall deliver possession of the Premises to the Lessee on the Commencement Date in the condition described in Schedule I, with the Cooling Plant described in Schedule III installed and in working order, and sanctioned electricity available. The Parties shall sign a joint inspection record on the Commencement Date, including a record of each chamber's temperature at handover, which shall be annexed to and form part of Schedule I.
2.4 Where the Lessor holds the Premises under a lease or sub-lease of its own, the Lessor warrants that the unexpired residue of that lease or sub-lease at the Commencement Date exceeds the Term, and that nothing in it prevents the grant of this lease.
- 3. RENT
3.2 Rent shall be paid by electronic transfer to the Lessor's bank account, or to such other account in the Lessor's name as the Lessor notifies in writing at least fifteen days in advance.
- 4. SECURITY DEPOSIT
4.2 The Security Deposit secures the Lessee's obligations under this Deed. The Lessor may deduct from it only: unpaid Rent; unpaid utility or other charges the Lessee owes under this Deed; the reasonable documented cost of making good damage to the Premises or the Cooling Plant caused by the Lessee's breach of its maintenance responsibility under clause 8, fair wear and tear excepted; amounts payable by the Lessee on early termination under the Lock-in clause; the reasonable documented cost of any reinstatement the Lessee was obliged to carry out under the Expiry and Reinstatement clause and did not; and any statutory dues that the Lessee was liable to pay and did not.
4.5 The Lessee shall not adjust the Security Deposit against Rent without the Lessor's written consent.
4.6 Within thirty days of each escalation of Rent, the Lessee shall top up the Security Deposit so that it continues to represent the same number of months' Rent as it did on the date of this Deed. The Parties note that for premises in the Union Territory of Chandigarh stamp duty is charged on the refundable security deposit, never on advance rent, and that whether the registering office treats an increased deposit as attracting further duty on the increment is a point to be confirmed at that office before the first top-up is paid.
- 5. TAXES
5.2 The Parties acknowledge that renting immovable property for use in the course or furtherance of business is a supply of service under GST law. Where the Lessor is registered under GST, the Lessor shall raise a proper tax invoice for each month and pay the tax, so that the Lessee may take input tax credit where available. Where the Lessor is not registered under GST and the Lessee is registered, tax on the renting of commercial immovable property is payable by the Lessee under the reverse charge mechanism as notified from time to time.
5.3 TDS: The Lessee shall deduct tax at source on the Rent under s.194-I of the Income-tax Act, 1961 where the rent payable attracts deduction under that section, deposit it within the prescribed time, file the return and furnish Form 16A to the Lessor. Where GST is charged and shown separately on the invoice, deduction shall be made on the amount excluding that tax. If a higher rate applies for want of a valid PAN under s.206AA of that Act, the resulting shortfall is the Lessor's burden.
5.5 Any new tax, cess or levy imposed on this letting after the date of this Deed shall be borne by the Party on whom the law imposes it, unless this Deed provides otherwise.
- 6. UTILITIES
6.1 The Lessee shall pay for electricity, water and other utilities consumed at the Premises, as metered, directly to the supplier, and shall produce receipts on request. The Parties acknowledge that a cold storage facility draws power continuously and at a high load, and the Lessee shall not exceed the sanctioned load without the Lessor's prior written consent and, where required, the utility's own approval.
6.2 The Lessee may apply for an enhanced sanctioned load; the Lessor shall sign the consents required from the owner, at the Lessee's cost, and shall not unreasonably delay doing so.
6.3 Utility dues relating to the period before the Commencement Date are the Lessor's liability, and the Lessor shall clear them.
- 7. THE CHAMBERS AND THE COOLING PLANT
7.1 The chambers comprised in the Premises, their capacities and their rated temperature ranges are described in Schedule II. The Cooling Plant is described in Schedule III.
7.2 The Lessor warrants that the Cooling Plant, as at the Commencement Date, is capable of holding each chamber within its rated temperature range stated in Schedule II under normal operating conditions.
- 8. PLANT MAINTENANCE, POWER AND SPOILAGE RISK
8.2 The Party responsible for maintaining the Cooling Plant under clause 8.1 shall maintain a maintenance and service log for it, open to inspection by the other Party on reasonable notice, and shall notify the other Party promptly of a fault materially affecting a chamber's ability to hold its rated temperature range.
8.6 Neither Party's liability under this clause is reduced by the existence of insurance the other Party could have taken out but did not; clause 12 states each Party's own insurance obligations, which are independent of this clause.
- 9. HAZARDOUS SUBSTANCE AND SAFETY COMPLIANCE
9.2 The Lessee shall permit inspection of the Cooling Plant and the safety systems around it by a statutory inspector or the Lessor's own safety consultant on reasonable notice, and shall promptly correct a deficiency notified to it in writing that falls within its own compliance responsibility under clause 9.1.
- 10. PERMITTED USE, THE ALLOTTING AUTHORITY AND COMPLIANCE
10.3 The Lessee shall obtain and maintain at its own cost every registration, trade licence, fire safety approval, pollution control consent and other permission its business at the Premises requires, over and above the hazardous-substance compliance in clause 9. The Lessor shall sign any consent, no-objection or application form required from the owner for those approvals, at the Lessee's cost, and shall not unreasonably delay or refuse.
10.4 The Lessee shall not use the Premises for any unlawful or nuisance-causing activity beyond the ordinary and lawful operation of a cold storage facility, and shall observe the building's rules notified to it in writing.
- 11. REPAIRS
11.1 Subject to clause 8 (which governs the Cooling Plant specifically), the Lessor shall keep in good repair, at its own cost, the structure, roof, external walls, insulation panels, foundations, water-proofing and common services, and shall remedy latent defects and any defect existing at the Commencement Date. The Lessor shall carry out such repair within thirty days of written notice, or immediately in an emergency affecting the ability to hold temperature. If the Lessor fails to do so, the Lessee may carry out the repair and set off the reasonable documented cost against Rent, up to two months' Rent for any one instance, after giving the Lessor a further seven days' written notice.
11.2 The Lessee shall keep the interior of the Premises, its own racking, fixtures and installations in good repair and condition, shall keep the Premises clean, and shall make good damage it or its employees, contractors or visitors cause, fair wear and tear excepted.
- 12. INSURANCE
12.1 The Lessor shall insure the building and the structure of the Premises, and the Cooling Plant if the Lessor is responsible for maintaining it under clause 8.1, against fire and special perils, and, where appropriate to the equipment, machinery breakdown, for their reinstatement value, and shall keep that cover in force for the Term.
12.2 The Lessee shall insure its own stock stored at the Premises, its own fit-out, racking and equipment, shall maintain public liability cover appropriate to its business, and, where it is itself responsible for maintaining the Cooling Plant under clause 8.1, shall insure that Plant for machinery breakdown. Each Party shall produce evidence of its cover on the other's written request.
12.3 Neither Party shall do anything at the Premises that voids or prejudices the other's insurance.
- 13. NO BAILMENT OF THE LESSEE'S STOCK
13.1 The Lessee stores its own goods at the Premises under this Deed, in exercise of the exclusive possession granted to it, and not as a service provided to the Lessee by the Lessor. This Deed accordingly does not make the Lessor a bailee of the Lessee's stock under ss.148 to 171 of the Indian Contract Act, 1872, and the Lessor takes on no duty of care over that stock beyond the obligations this Deed expressly states in clause 8.
13.2 Where the Lessee stores goods belonging to a third party at the Premises as a paid service to that third party, the Lessee is itself a bailee of those goods to that third party under a separate arrangement to which the Lessor is not a party, and this Deed creates no relationship, and no liability, between the Lessor and that third party.
- 14. LESSOR'S COVENANTS
14.1 The Lessor has good title to, or authority over, the Premises and full power to grant this lease, and there is no subsisting agreement, encumbrance, allotment condition or proceeding that prevents the Lessee's quiet enjoyment.
14.2 So long as the Lessee pays the Rent and observes this Deed, the Lessee shall peacefully hold and enjoy the Premises for the Term without interruption by the Lessor or anyone claiming through it.
14.3 The Lessor and its representatives may enter the Premises to inspect or repair at reasonable times on forty-eight hours' prior written notice, or without notice in an emergency, and shall take reasonable care not to compromise the temperature of a chamber while doing so.
14.4 The Lessor may transfer the reversion, but shall procure that the transferee assumes this Deed in writing and receives the Security Deposit, and shall notify the Lessee of the transfer.
- 15. LESSEE'S COVENANTS
15.1 The Lessee shall pay the Rent and all other sums when due, use the Premises only as permitted, comply with applicable law in the conduct of its business, permit inspection as provided above, and not part with possession except as this Deed allows.
15.2 The Lessee shall not do anything that creates a charge or encumbrance on the Premises, and shall not claim any right in the Premises beyond the leasehold interest granted by this Deed.
- 16. ASSIGNMENT AND SUB-LETTING
16.2 Any assignment, sub-letting or parting with possession that this clause does not permit is void as against the Lessor and is an event of default.
- 17. LOCK-IN, NOTICE AND TERMINATION
17.1 Neither Party may terminate this Deed before the expiry of the Term except as this clause, the Default clause or the Damage, Destruction and Force Majeure clause allows.
- 18. DEFAULT AND RE-ENTRY
18.1 Each of the following is a default by the Lessee: Rent or other sums remaining unpaid for thirty days after written demand; breach of a material term not remedied within thirty days of written notice; an admitted petition for insolvency, winding up or liquidation of the Lessee that is not withdrawn or stayed within sixty days; a breach of the hazardous-substance compliance in clause 9.1 not remedied within the time a statutory authority allows, or fifteen days if none is stated; or an assignment or sub-letting in breach of this Deed.
18.2 On a default by the Lessee that continues, the Lessor may terminate this Deed by fifteen days' written notice and recover possession, without prejudice to its right to recover arrears and damages.
18.3 The Lessor shall recover possession only in accordance with law, and where the Applicable Rent Law clause requires possession to be recovered through a statutory forum, only through that forum. The Lessor shall not take forcible possession of the Premises, lock out the Lessee, remove its goods or disconnect electricity otherwise than by due process — a step that, for a cold storage facility with stock inside it, risks causing the very spoilage this Deed otherwise allocates carefully between the Parties.
18.4 Each of the following is a default by the Lessor: failure to carry out a structural repair, or a repair to the Cooling Plant where the Lessor is responsible for it under clause 8.1, within the time that clause or clause 11.1 requires; disturbance of the Lessee's quiet enjoyment; or an encumbrance, allotment condition or proceeding that materially affects the Lessee's possession. On such a default that is not remedied within thirty days of written notice, the Lessee may terminate this Deed by thirty days' written notice, and in that event the Security Deposit is refundable in full and no early-exit compensation is payable.
- 19. RENEWAL
19.1 Except as stated in this clause, the Lessee has no right to renew or extend this lease, and this Deed ends on the expiry of the Term.
- 20. EXPIRY, REINSTATEMENT AND HANDOVER
20.1 On expiry or earlier termination, the Lessee shall hand over vacant and peaceful possession of the Premises to the Lessor in good condition, fair wear and tear excepted, together with all keys and the Lessor's fixtures.
20.3 The Lessee shall clear all utility and statutory dues relating to its occupation up to the date of handover and produce the final bills and receipts.
20.4 Anything the Lessee leaves at the Premises more than fifteen days after handover, including any stock left in a chamber, may, after written notice to the Lessee, be removed and disposed of by the Lessor at the Lessee's cost.
- 21. HOLDING OVER
21.1 Subject to clause 4.4, if the Lessee remains in occupation after expiry or termination without a fresh registered lease, it does so as a tenant at sufferance. The Parties record that such occupation is not with the Lessor's assent and is not a holding over with assent within the meaning of s.116 of the Transfer of Property Act, 1882.
21.3 This clause does not limit the Lessor's right to recover possession in accordance with law, and is subject to the Applicable Rent Law clause.
- 22. DAMAGE, DESTRUCTION AND FORCE MAJEURE
22.1 If the Premises are destroyed or rendered substantially unfit for the permitted use by fire, flood, earthquake, tempest, civil commotion or other event not caused by the Lessee, the Rent abates proportionately from the date of the event until the Premises are again fit for use. If they are not made fit within ninety days, either Party may terminate this Deed by written notice, in which case the Security Deposit is refundable in full, less only sums already accrued and unpaid at the date of termination, and no early-exit compensation is payable. This is in addition to the Lessee's right under s.108(B)(e) of the Transfer of Property Act, 1882. This clause governs destruction of the Premises; clause 8 separately governs spoilage of the Lessee's stock caused by a plant, power or temperature failure.
22.2 Neither Party is liable for failure to perform an obligation, other than an obligation to pay money already accrued, where the failure is caused by an event beyond its reasonable control. The affected Party shall notify the other within seven days and use reasonable efforts to resume performance.
- 23. INDEMNITY AND LIABILITY
23.1 The Lessee shall indemnify the Lessor against claims, losses, penalties and reasonable legal costs arising from its use or occupation of the Premises, the acts or omissions of its employees, contractors and visitors, its breach of this Deed, and its non-compliance under clause 9.1.
23.2 The Lessor shall indemnify the Lessee against claims, losses and reasonable legal costs arising from a defect in the Lessor's title or authority, a prior encumbrance, a breach by the Lessor of the conditions of any allotment or lease under which it holds the Premises, or its breach of this Deed.
23.3 Neither Party is liable to the other for indirect or consequential loss, or for loss of profit, except in respect of sums expressly payable under this Deed, and clause 8.5 separately caps liability for spoilage where the Parties have chosen a cap.
- 24. CONFIDENTIALITY
24.1 Each Party shall keep the commercial terms of this Deed confidential, except that either may disclose them to its professional advisers, auditors, lenders and group companies, and where disclosure is required by law, by a regulator, or for stamping, registration or the enforcement of this Deed.
- 25. STAMP DUTY AND REGISTRATION
25.1 The Term of this lease exceeds one year and reserves a yearly rent. This lease must therefore be made by a registered instrument under s.107 of the Transfer of Property Act, 1882 and is compulsorily registrable under s.17(1)(d) of the Registration Act, 1908.
25.4 Two witnesses shall attest this Deed and shall attend the registering office with the executants.
25.5 Neither Party shall dispute the validity of this Deed on the ground of insufficient stamping or non-registration where that state of affairs results from its own failure to perform this clause.
25.6 This Deed is executed in duplicate, or in such greater number of copies as the registering office requires. Whether the duplicate or counterpart itself attracts stamp duty, and at what rate — Article 25 of Schedule I-A to the Indian Stamp Act, 1899 as applicable — shall be confirmed at the registering office before the duplicate is engrossed.
- 26. NOTICES
26.1 Notices under this Deed shall be in writing and delivered by hand against acknowledgment, or by registered post or reputed courier with proof of delivery, to the Lessor at __________ and to the Lessee at __________, or to such other address as a Party notifies in writing.
26.2 Email is sufficient for routine correspondence, but a notice of termination, default or renewal must be given by hand, registered post or courier. Notice of a plant, power or temperature fault under clause 8.2 shall additionally be given by the fastest means reasonably available, including telephone confirmed in writing.
- 27. APPLICABLE RENT LAW
27.2 Nothing in this Deed excludes, and neither Party is to be taken to have waived, any right or protection conferred by the rent statute identified in clause 27.1.
27.3 A dispute about recovery of possession that a rent statute reserves to the Rent Controller or to the Rent Authority is not referable to arbitration.
27.4 Where clause 27.1 records that no rent statute governs this tenancy, clauses 27.2 and 27.3 have nothing to operate on, and possession is recoverable by an ordinary civil suit as clause 27.1 states.
- 28. DISPUTE RESOLUTION AND GOVERNING LAW
28.1 The Parties shall first attempt to resolve any dispute by discussion between their authorised representatives within thirty days of written notice of the dispute.
28.4 This Deed is governed by the laws of India as in force at the place where the Premises are situated.
- 29. GENERAL
29.1 This Deed, with its Schedules, is the entire agreement between the Parties about the Premises and supersedes all prior discussions, term sheets and letters of intent.
29.2 No amendment is effective unless made in writing and signed by both Parties; an amendment to the Rent, the Term or the extent of the Premises shall be made by a supplementary deed, duly stamped and registered.
29.3 A failure or delay in enforcing a right is not a waiver of it, and a single or partial exercise does not prevent further exercise.
29.4 If any provision is held invalid or unenforceable, the rest of this Deed continues in effect, and the Parties shall replace that provision with a valid one of the nearest effect.
29.5 Nothing in this Deed creates a partnership, joint venture or agency between the Parties.
29.6 The clauses on Security Deposit, Taxes, No Bailment of the Lessee's Stock, Hazardous Substance and Safety Compliance, Expiry and Reinstatement, Holding Over, Indemnity, Confidentiality, Stamp Duty and Registration, Applicable Rent Law, and Dispute Resolution survive the expiry or termination of this Deed.
SCHEDULE I — THE PREMISES
Boundaries and the floor plan of the Premises are as shown in the plan annexed to this Deed and initialled by both Parties. The joint inspection record signed by the Parties on the Commencement Date under clause 2.3 forms part of this Schedule.
SCHEDULE II — CHAMBERS AND TEMPERATURE RANGES
SCHEDULE III — COOLING PLANT SPECIFICATIONS
SIGNED AND DELIVERED by the LESSOR
__________
PAN: __________
Signature: ______________________________
SIGNED AND DELIVERED by the LESSEE
__________
PAN: __________
Signature: ______________________________
WITNESSES