CHAPTER-I

INTRODUCTION
Transfer of property means an act by which a living person conveys property, in present or in
future to one or more other living persons or to himself and one or more other living persons: and
to transfer property is to perform such act.

ESSENTIAL ELEMENTS OF TRANSFER OF PROPERTY

1.Transfer: The essence of the term transfer is to convey. It therefore implies conveyance of
property by a person entitled to it to a person having no title to it.

2. Living person: A transfer usually involves two distinct living person. The term living person
includes a company or association or body of individuals, whether incorporated or not.

3. Conveyance: Section 5 while defining the term transfer of property says that transfer of
property means an act by which a living person conveys property. The word conveys is used in
Section 5 in a very wide sense. The following do not constitute a transfer of property within the
meaning of Section 5.

a) Family arrangements

b) Settlement of disputed claim

c) Release relinquishment and surrender d) Partition.

4. Property: the term property is not defined in the act Section 9 of the Act however says that
property of any kind may be transferred. This means the term property is used in the act in very
wide sense and is left open for Judicial Interpretation.

5. In present or in future: Transfer of property may take place in present or in future but the
property must be in existence.

Kinds of Transfer

The Act contemplates the following kinds of transfers:

(1) Sale,
(2) Mortgage,

(3) Lease

(4) Exchange, and

(5) Gift.

Sale is an out-and-out transfer of property. In mortgage, there is a transfer of limited interest in

property. A lease is a transfer of a right to enjoy immovable property for a certain time or in
perpetuity. Exchange is like a sale, but differs from it as regards the consideration. In sale, the
consideration is money, while in exchange, the consideration is another thing. In a gift, there is
no consideration.

IMMOVABLE PROPERTY

Definition of immovable property in Section 3(26) of General Clauses Act, 1897, is also not
exhaustive. It defines immovable property as it shall include land, benefits to arise out of land,
and things attached to earth. Thus we find that while Transfer of property excludes certain
things. General Clauses Act, includes certain things under the head ‘immovable property’. By
combing both definitions, we may say that, the term includes land, benefits to arise out of lands,
and things attached to the earth, except standing timber, growing crops and grass.

(A)Land: It means a determinate portion of the earth’s surface, which may be covered by
water, the column of surface above the surface, the ground beneath the surface. All the objects
which are on or under the surface in its natural State are included in the term land. Also all
objects placed by human agency on or under the surface with the intention of permanent
annexation are immovable property, e.g., Building, wall, fences.

(B) Benefits to arise out of land: Apart from physical point of view, every benefits arise out
of land is also regarded as immovable property. Registration Act also includes as immovable
property benefits to arise out of land, hereditary allowances, right of way, lights, ferries and
fisheries. In Anand Behera v. State of Orissa, AIR 1956 SC 17, the right to catch away fish from
chilka lake, over a number of years, was held to be an equivalent of profits a pendre in England
and a benfits to arise out of land in India. Similarly, a right to collect a rent and profits of
immovable property, right to collect dues from a fair or heat or market on a land are immovable
property.

(C)Things attached to earth: Section 3 of transfer of property defines the expression

‘attached to earth’ as including (1) things rooted in the earth, (2) things embedded in the earth,
(3) things attached to what is so embedded, and (4) chattel attached to earth or building.

(1) Things rooted in earth include trees and shrubs, except standing timber, growing crops and
grasses (Section 3, TPA). Whether tress regarded as movable or immovable depends upon the
circumstances of the case. If the intention is that trees should continue to have the benefit of
further sustenance or nutriment by the soil (land), e.g., enjoining their fruits, then such tree is
immovable property. But if the intention is to oust them down sooner or later for the purpose
utilizing the wood for building or other industrial purpose, they would be timber and of
accordingly be regarded as movable property (Shantabai v. State of Bombay, AIR 1958 SC 532)
determining whether the tree is movable or immovable, the intention if party is important if the
parties intend that the tree should continue to have the benefit of further nutriment to be afforded
by soil, the tree is immovable property. But if intention is to withdraw the tree from land, and the
land is providing it only as a warehouse, it is to be treated as movable property.

(2)Things embedded in earth: It includes such things as house, buildings, etc., however certain
things like an anchor imbedded in the land to hold a ship is not an immovable property’ to
determine whether such things are movable or immovable property, depends upon circumstances
of each case and there are two main conditions to indicate intention:

 the degree or mode of annexation, e.g. tie-up seats fastened to the floor of cinema halls
are immovable property on brick-work and timber and tapestries;

 the object of annexation, for, e.g., Blocks of stone placed one on the top of other without
any mater or cement for the purpose of forming a dry wall, will become part of land, so
immovable property, but not the stones deposited in the builder’s yard.

(3) Things attached to what is so embedded must be for the permanent beneficial enjoyment of
the to which it is attached, as section says for, e.g., door and windows of a house are immovable
property to be permanent, like electric fans or window blinds, they are movable property.
(4)Chattel attached to earth or building if a chattel, i.e., movable property is attached to earth or
building, if is immovable property. The degree, manner, extent and strength of attachment are the
main features to be regarded in determining the question. Standing timber, growing crops and
grasses are regarded as severable from land and they are regarded as movable property. However
if they and the land on which they stand is sold, such standing timber, growing crops or grasses
will pass to purchases.

(d) Standing timber: The word standing timber includes Babool Tree, Shisham, Nimb, Papal
Banyan, Teak, Bamboo, etc. The fruit berating tree like Mango, Mahua, Jackfruit, Jamun, etc.,
are not standing timber, and they are immovable properties ( Fatimabibi v. Arrfana Begum, AIR
1980 All 394). But if intention is to cut them down sooner or later for the purpose utilising them
as timber, and not to use them for the purpose of enjoying their fruits, they are regarded as
movable property. (T.A. Sankunni v. B.J. Philips, AIR 1972 Mad 272).

(e) Growing crops: Growing crops includes creepers like pan, angoor, etc., millets (Wheat,
Sugarcane, etc.), Veg like Lauki, Kaddo, etc. These crops don’t have any own independent
existence beyond their final produce.

(f) Grasses: It can only be used as fodder, and no other use is possible. Therefore it is movable.
But a contract to cut grass will be an interest in chattel, so is immovable property. The following
has been judicially recognised as immovable property:

(1) Right to collect rent of immovable property.

(2) Right to dues from a fair on a piece of land.

(3) A right of fisheries.

(4) A right of terry.

(5) A right of way.

(6) Hereditary offices.

(7) The interest of a mortgagee in immovable property.

Minerals: Upon transfer of immovable property, things not only rooted to it, but also anything
found deep down below the property goes along with the transfer. All minerals below the land
sole are immovable property.

Movable Property

Transfer of property does not define movable property. In General Clauses Act, it is defined as
“Property of every description except immovable property”. Some examples are right of
worship, royalty, machinery not attached to earth which can be shifted, a decree for arrear of
rent.

LEASES OF IMMOVABLE PROPERTY

DEFINITION OF LEASE

Lease can be of a movable or an immovable property. It is a contractual arrangement calling for

the lessee (user) to pay the lessor (owner) for use of an asset.

Under the Transfer of Property Act, 1882 (in short T.P. Act) the subject of “Leases of
Immovable Property” is dealt with in Chapter 5.
Section 105 of the Transfer of Property Act, 1882 defines a lease of immovable properties.
A lease of immovable property is a transfer of a right to enjoy such property for a certain time, or
in perpetuity, in consideration of price paid or promised or money, a share of crop, service or any
other thing of value to be rendered periodically or on specified occasions, to the transferor by
transferee, who accepts the transfer on such terms.
Essentials of the Valid Lease

1) The lessor-He must be competent to contract and he must have title or authority.
2) The lessee- He also must also be competent to contract at the date of execution of the lease. A
sale or a mortgage to a minor is valid. But a lease to a minor is void, as the lease is to be
executed both by the lessor and the lessee. (S 107)
3) The subject matter of the lease must be immovable property.
4) There must be transfer of a right to enjoy such property.
5) Duration of lease- A lease must be made for a certain time, express or implied, or in
perpetuity.
6) Consideration- Like every agreement, a lease must have consideration, which may be
premium plus rent, as well as premium alone or rent alone.
7) The lessee must accept the transfer.
8) It must be in mode indicated by S 107.

Difference between agreement to lease and lease:-

An agreement to lease does not give rise to right in rem. It creates only a personal obligation,
which may be enforced by a suit for specific performance under specific relief Act, provided that
agreement to lease is in writing and is accompanied by delivery of possession. In this respect, it
materially differs from an agreement to sell. The latter agreement may be specifically enforced
even if oral and unaccompanied by delivery of possession; but not in respect of agreement to
lease. A lease does but an agreement for lease does not establish the legal relationship of
landlord and tenant between the parties. This is so, because a lease is a transfer of a right to enjoy
property, whereas an agreement to lease is not.
Difference between lease and licence:-
The term ‘lease’ and ‘license’ are defined under Section 105 of the Transfer of Property Act and
Section 52 of the Indian Easements Act respectively.
Section 105 of Transfer of Property Act:
“Lease Defined. A lease of immovable property is a transfer of a right to enjoy such property,
made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or
promised, or of money, a share of crops, service or any other thing of value, to be rendered
periodically or on specified occasions to the transferor by the transferee, who accepts the transfer
on such terms.”

Section 52 of the Easements Act, 1882:

“License, Defined. Where one person grants to another, or to a definite number of other persons,
a right to do, or continue to do, in or upon the immovable property of the grantor, something
which would, in the absence of such right, be unlawful, and such right does not amount to an
easement or an interest in the property, the right is called, a license.”
“Lease” is a word which everyone is aware of, and hears it day in and day out while dealing the
transactions related to immovable property. Lease can be defined as the right to enjoy an
immovable property for a certain period of time, in consideration of a price paid by the person
getting possession of the property.
Under Black’s Law dictionary, “Lease” can be defined as a conveyance of lands tenements to a
person for life, for a term of years, or at will, in consideration of rent or some other recompense.
Oxford Dictionary of Law defines it as “a contract under which an owner of property grants
another person exclusive possession of the property for an agreed period, in return for rent and
sometimes for a capital sum known as a premium.
Section 105 of Transfer of Property Act, 1882 defines lease and one would be easily able to
derive some of the important characteristics of a lease such as transfer of an interest, parties to
the lease, subject matter of lease etc. But, there is another provision or legal principle which at
sometimes is confused with the concept of lease i.e. Licence.
Black’s Law Dictionary defines “Licence” in the context of property law as an authority to do a
particular act or series of acts upon another’s land without possessing any estate therein. Oxford
Dictionary of Law defines it as Permission to enter or occupy a person’s land for an agreed
purpose.

Both the provisions look similar, then what make them different is a very important question,
which has to be resolved, and it is abstruse to do so. Sometimes, there arise some situations,
which abridge difference between them. In order to understand the difference between these two
provisions and to know the situation, which they may conflict, it becomes very important to
understand the basic features of both Lease and Licence.

Generally, a lease contemplates the following:

a) a demise or a transfer of a right to enjoy property;
b) for a term or in perpetuity;
c) in consideration of a price paid or promised, or of money, a share of crop or services or other
things of value to be rendered periodically or on specified occasions to the transferor.
The essential characteristic of a lease are:
1. transfer of an interest;
2. parties to a lease;
3. subject matter of lease;
4.types of lease;
5. duration of lease; and
6. consideration for lease
Transfer of Interest
A lease a transaction with respect to immovable property and creates a right to enjoy such
property for a certain term and for consideration on the conditions mentioned in it. The right to
possess and enjoy the property is transferred in favour of the lessee and he acquires this interest
through the conveyance of the lease. After the creation of such an interest, a tenant or a sub-
tenant is entitled to remain in possession thereof until the lease is duly terminated and eviction
takes place in accordance to law. The relationship of landlord and tenant can come into existence
only after the transfer of an interest in immovable property pursuant to a contract and creates a
right in rem. Where there is no transfer of interest there is no lease. Further, if an option is given
to the lessor by the lessee himself to resume the leasehold, it is a personal covenant and does not
create an interest in the land.
Parties in Lease
The parties to the lease are the transferor, who is called the lessor or landloard, and the
transferee, who is called the lessee or tenant. Both the parties must be competent to contract. The
lessor and the lessee cannot be the same person, they have to be two different persons. A lessor
can be an absolute owner of the land or a joint tenant or a lessee himself but above all must be
competent to contract. Thus minors, or unregistered associations cannot be lessees.

Subject Matter of Lease

The subject matter of a lease is a specific immovable property such as land, houses, factories,
shops, minerals, buildings etc. Usually a lease of a house and a shop includes not only the
superstructure but also the site, unless the same is specifically excluded from the definition of the
land in the lease deed. However, terrace and air space above a tenanted multi-storeyed building
are not included in lease.
Duration of Lease
The lease need not be for fixed period but its duration should be definite. An uncertainty as to the
duration of the term will be detrimental to the lease. When the lease is for specific period, its
period cannot be infinite by mere provisions of renewal every year.
Consideration for Lease
There must be a consideration fixed for lease for lease that may be in the form of:
a) money;
b) money’s worth such as a share in crops;
c) service or any other thing of value, to be rendered periodically or on specified occasions to the
transferor by the transferee. Consideration may be termed as rent plus premium as well as rent
alone or premium alone. Also, a lease without consideration is invalid.
Licence
A licence is a right to do or continue to do, in or upon the immovable property of the grantor,
something which would in the absence of such right is unlawful, and such right does not amount
to an easement or an interest in the property. Further, it is an authority to do a particular act or
series of acts upon another’s land without possessing any estate therein.
Thus, the primary distinction between a lease and a licence is that the lease is a transfer of a right
in a specific immovable property, whereas, licence is a bare permission and a licencee is not
entitled to notice to quit before evidence.
Primary distinctions between Lease and Licence:
1. A lease is a transfer of an interest in a specific immovable property, while licence is a bare
permission, without any transfer of an interest.
2. A lease creates an interest in favor of the lessee with respect of the property, but a licence does
not create such an interest.
3. A lease is both transferable and heritable, a sub tenancy can be created by the tenant and on
the death of the tenant, the tenancy can be inherited by his/her legal heir, whereas, licence is
neither transferable nor heritable.
4. A licence comes to an end with the death of either the grantor or the guarantee, since it is a
personal contract, but a lease does not comes to an end on either the death of the grantor or
grantee.

5. A licence can be withdrawn at any time at the pleasure of the grantor but the lease can come to
an end only in accordance with the terms and condition stipulated in the contract of tenancy
agreement.

6. A lease is unaffected by the transfer of the property by sale in favour of a third party. It
continues and the purchaser has to wait till the time period for which the tenancy was created is
over before he can get the possession, whereas, in case of a licence, if the property is sold to a
third party, it comes to n end immediately.
7. A lessee has a right to protect the possession in his own right. Whereas, a licensee cannot
defend his possession in his own name as he does not have any proprietary right in the property.
8. A lessee in possession of the property is entitled to any improvements or accessions made to
the property, while a licensee is not.
Whether a Lease of a Licence
A finding on the question whether the person in possession is a tenant or a licensee is a finding
of fact. To ascertain if a document creates a lease or a licence, the substance of the document
should be preferred to its form. Where it creates an interest in the property, it is a lease; but, if it
only permits another to make use of the property, of which legal possession and control
continues with the owner, it is a licence. A licence does not create any estate or interest in the
property to which it relates. Thus, whether an instrument operates as a lease or licence is not a
matter of words contained in the instrument creating it, but of its substance. The decisive
consideration is the intention of the parties, but the intention must be gathered on a true
construction of the agreement and not merely from the description given by the parties.
Where, on point of intention the document is ambiguous, the question is to decide in the context
of the surrounding antecedent and consequent circumstances, and parole evidence. A document,
which expresses the intention of both parties or of one party to create license will nevertheless
create tenancy if the rights and obligations enjoyed and imposed satisfy the legal requirements of
tenancy.

The mere use of words appropriate to a lease will not preclude its being held a license; so even a
document referring to ‘rent’ maybe a license. Transfer of exclusive possession generally
indicates an intention to create a lease even though the sum is described as a ‘license fee’, but it
is no longer a conclusive test and there maybe cases where transferee in excusive position is a
licensee. Where, after the expiry of the original period of lease, the lessee continues in
possession and the lessor accepts from him premium for the subsequent period, it is a lease and
the lessee could not be ejected without the termination of the freshly created lease.
Difference between Mortgage and Lease
Lease and Mortgage are species of the same genus viz., the ‘transfer of property’. Both of them
bring about transfer of property, but with a substantial change as to the nature of disposition. The
principal objective of a mortgage is to provide security for repayment of amount, whereas the
one under lease is that the owner of an item of immovable property permits another to use it on
payment of rent. Except in the case of usufructuary mortgage and mortgage through conditional
sale, the possession of the property continues to be with the mortgagor.
In the case of lease, the transferee invariably gets the possession of the property. Apart from the
broad difference, there are certain minute important aspects that differentiate the mortgage from
lease. Once a transaction of mortgage is brought about, the mortgagor gets the right to redeem
and the mortgagee gets the corresponding tight to foreclose the mortgage. The nature of decree to
be passed in a suit for foreclosure of mortgage differs substantially from the one to be passed in a
suit for recovery of possession of property from a lessee. A preliminary decree is to be passed
and it is followed by final decree. Chapter IV of the Transfer of Property Act, 1882 confers
rights and places obligations on the mortgagors, on the one hand, and mortgagees, on the other
hand, which are typical and germ atone to such transactions.
Prescription of any fixed term is alien to mortgages. Lease, on the other hand, involves, just the
permission being accorded by an owner of property, to another, to use it. The consideration
therefor is the rent fixed with the consent of the parties. In a given case, the lease may be
nominal or phenomenal. Further law does not prohibit the rent being paid in the form of
adjustment from the amount due from the lessor to the lessee. What becomes important is the
objective underlying the transaction, namely use of the property belonging to the lessor by the
lessee, on payment of rent and for a stipulated term.
Chapter V of the Act enlists the rights, which a lessor has against the lessee and vice versa.
Termination of lease on the one hand, and foreclosure/redemption of mortgage, on the other
hand, have nothing in common. When such is the radical difference between the two
transactions, it is not at all possible to take the one for the other. Gita Cotton Trading
Company v.CCRA, Hyderabad and another.
Duration of Lease

Section 106 of the Transfer of Property Act, 1882 which draws the provision of the duration of
lease. This paper will productively investigate the distinction between the lease for
‘manufacturing or agricultural purpose’ and a lease for ‘any other purpose’. This research paper
would also make it very conspicuous for the reader that there are diverse angles in which section
106 wasn’t appropriate as a law of the land as a result of which there were various amendment
which took place regarding this.

Proceeding towards the content it would also deal with the scope of legislative history of this
section, differentiation, notice etc. But considering the name of section duration of lease lets first
discuss what a lease is. It’s been described in section 105 of the Transfer of Property Act, 1882.

So considering all the parameters related to this institution which came up at 1882 lease has
come up as one the most vital part of the statute and thus in light of the same, in this research
paper, the researcher has tried to address the uncertainty that may emerge in such debate in a
straightforward yet clear way.

Considering the scope of section 106 of the Transfer of Property Act, 1882 it’s of the widest
amplitude the section establishes a rule for duration of leases which are not governed by a
contract or a local law or usage, i.e. where the period of lease is not specified and thus then
thereafter various amendments were proposed some passed some not.

Section 106 of the Transfer of Property Act, 1882 lays down a general rule that a lease of
immovable property for agricultural or manufacturing purpose shall terminate on six months’
notice by either the lessor or lessee, while fifteen days is the time period in the case of a lease of
immovable property for a purpose other than agricultural one. Every notice under this section has
to be in writing, signed by or on behalf of the person giving it; either sent by post or is delivered
personally.
This section has been amended and altered several times. By the amendment act of 1929, “either
be sent by post to the party who is intended to be bound by it or be tendered or delivered
personally to such party” has been substituted with “tendered or delivered personally to the party
who is intended to be bound by it.”

By local acts, the following two changes have been brought in the section. Firstly, ‘expiring with
the end of a year of the tenancy’ and ‘expiring with the end of a month of the tenancy’ have been
omitted. Secondly, the words ‘fifteen days’ and ‘notice’ have been substituted by the words
‘thirty days’ and ‘notice’.

The purpose of the provision in sec. 106 is to terminate the relationship of lessor and lessee
before the lessor sues for possession. He has no right of entry till the tenancy is disrupted.
Further, the idea is that every lessee must have some reasonable notice before he is asked to
vacate the premises.

There are various controversies related to section 106 and all of this started with the wrong
interpretation of the case ofMangilal vs. SuganChand, Years after the notice and the filing of
the suit, the court would be compelled to declare the notice invalid, though the defendant had
more than the prescribed time of six months or fifteen days by the date of filing of the suit or by
the date of judgment dismissing the suit.

Also In the case where the lessess plea was accepted regarding commencement of tenancy this
technicality has been leading to too much of an injustice to the plaintiff though no prejudice at all
is caused to the defendant. This was all because of the case of Mangilal vs. SuganChand.
In Dattonpant vs. Vithalrao similar principle was applied which clearly led injustice to the
lessor.

The 108th report on ‘Amendment to sec.106 of the Transfer of Property Act, 1882’ of Law
Commission of India, suggested that some provisions of the section needs to be amended. The
committee proposed that the provision of expiry should be removed and the duration of 15 days
must be substituted by 60 days. This proposal has not been approved yet by the union of India.

The scope of this section is limited to certain conditions.

They are:-

CONTRACT TO THE CONTRARY – There is not a necessity is this section that the contract to
the contrary should be expressed only, rather it can be implied also the only condition being that
the contract needs to be valid. All the stipulated provisions under section 106 of the act will
remain active until there is a contract to the contrary as to the time of the duration of the lease in
the lease agreement. Now the major limitation of this section is that if there is a contract to the
contrary with different provisions regarding duration of lease then the statutory requirement of
notice is of no use.

In the landmark case of Moosa Ruty v Thekka, the court held that it is not necessary to send a
notice to the lessee about the land; a demand will be sufficient if the lease carries a condition that
the concerned land will be surrendered whenever required.

In the case of V. Sidharthan v PattiortiRamadasan, the court held that the lessee is bound to
surrender the premise on demand of the lessor. This would show a “contract to the contrary”.
Also in the very case of Amar Singh v. Hoshir Singh, the court explicitly held that the lessor
has the right to evict the lessee without even presenting a prior notice if the lessee fails to pay the
agreed rent.

LOCAL LAW TO THE CONTRARY – The presumption considered in this section as to certain
leases being deemed to be from year to year or from month to month, can be raised only in cases,
where there is no local law to the contrary. It can’t be made if there is a law unexpectedly. Such
law must be in force at the time of the judgment. Thus the local law would prevail if the law of
the land has stopped to be in force.

Likewise in Uttar Pradesh understanding that the system for interpretation of section 106 of the
Transfer of Property Act was prompting foul play convincing the lessor to record the crisp suits
after quite a long while have slipped by. The legislature of UP had, by Act 24 of 1954, precluded
the words “terminating with the end of a month of the tenure”. It had likewise expanded the time
of notice of 15 days on account of month to month tenures to 30 days. After the said UP
amendment, the first part of sec. 106 reads as follows:
The said contrary view is reflected in Gorakh Lal v. Maha Prasad Narain Singh which also
adhered to the principles of the UP act.

USAGE TO THE CONTRARY – many times the provisions stated in section 106 have been
doubted and were only considered applicable if there is no usage to the contrary. Utbandi, a
custom in Bengal, is a tenancy at will, which can be terminated by a verbal demand for
possession. If we talk about usage, then there is a sharp contrast between the usage in Bombay
and Punjab. In Bombay it is mandatory to serve a notice to quit at least a month before whereas
in Punjab, the notice period is 15 days.In the case of Surendranath Satkar v. Poornachandra
Mukherji, the court held thatUtbandi, a custom in Bengal, is a tenancy at will, which can be
terminated by a verbal demand for possession. If we talk about usage, then there is a sharp
contrast between the usage in Bombay and Punjab. In Bombay it is mandatory to serve a notice
to quit at least a month before whereas in Punjab, the notice period is 15 days.

DIFFERENTIATION

This section clearly differentiates between the procedure and conduct of lease of immovable
property for agricultural or manufacturing purposes and lease of immovable property for any
other purpose.

LEASES FOR AGRICULTURAL OR MANUFACTURING PURPOSES –

In case of agriculture purpose, the provisions declared by the state government will be applicable
to all or one such lease. In most of the cases, the agricultural tenures are controlled by local acts.
Some agriculture tenancies are made at the sole discretion of the zamindar but still, these are not
considered deviated even if they don’t abide to the statutory provisions.

For manufacturing purposes, the leases are from year to year, terminable by a six months’ notice
by either of the parties, i.e. the lessor or the lessee.

The act in itself does not give a proper definition of the term “manufacture” but a clear and
acceptable definition is given in the case of South Bihar Sugar Mills Ltd. v. Union of India.
To identify that whether a lease is for manufacturing purpose or not, the following requirements
should be fulfilled given in the case of Bachulal Sah v. M.S. Gita Timber Co.

Production of a certain commodity-

 Involvement of either labour or machinery in the production of goods.

 The finished product must have a unique feature, a unique name and should be put to
some specific use.

 In simple words, the finished product should be entirely different from its original
composition and character. For example, polishing cannot be considered a manufacturing
process.

LEASE FOR ANY OTHER PURPOSE – all the other kinds of the lease which don’t come in the
ambit of agriculture and manufacturing purpose shall be from month to month terminable by a
15-day prior notice which expires at the end of the month of tenancy. Technically, a lease for
several purposes like setting up a printing press or library etc. which does not fall under the
ambit of “manufacturing purpose” as interpreted by section 106 of the act will be known as a
lease for ‘any other purpose’.

NOTICE TO QUIT

As per section 106 of the Transfer of Property Act, 1882, a notice to quit has to be sent by the
lessor to the lessee in order to terminate the lease agreement. The lease agreement can be
terminated by issuing a notice of 15 days in cases of monthly tenancy which deals with ‘any
other purpose’. If the lease is for agricultural or manufacturing purpose, the notice to quit can be
served by giving a prior notice of six months as it is on yearly basis.

There is a list of conditions which need to be fulfilled and procedure in which a notice is to be
served. The following conditions are:

 The notice must be candid and unequivocal. The notice terminating the tenancy must be
with respect of the property leased, and not in respect of the proportion of the lease and if
made it would be considered invalid.
  It should be signed by or on behalf of the person giving it. Similarly, if the notice of the
lessor is signed by his attorney or by his sons after his death is considered to be valid.

 The notice must indicate with certainty the intention on the part of the person giving it to
terminate the existing tenancy.

 Notice to quit may be served personally or by post. Although the publication of a notice
in a local new-paper or publishing the notice in any other public domain, like telegraph,
etc, is not a valid notice. In the same way in case of a corporation, the notice must be sent
to an authorized officer. A registered notice would always be presumed to be service of
the notice.

 Affixing the notice to the property is the last resort. The only thing which has to be taken
care of is that the notice should be regarding the whole demised property not in
proportion otherwise the notice would be ineffective.
DATE OF EXPIRY OF NOTICE
The concerned section clearly states that if the lease is from year to year, a notice will expire
with the end of the year of the tenancy. And, if the lease is from month to month, a notice will
expire with the end of the month of the tenancy.

The only thing which has to be taken care of is that the time should not be less than the
prescribed time in the statutory provision although the time can be exceeded. The notice should
expire at the end of the year or the month otherwise it would be invalid as decide in the very case
of Maya Chanda & others v. Krishnan Lal Dey & Anr.

Leases how made

1) A lease of immovable property can be made from year to year, or for any term exceeding one
year, or reserving yearly rent only by a registered instrument.
2) In any other case, either by a registered instrument, or by oral agreement accompanied by
delivery of possession.
Rights and Liabilities of Lessor and Lessee
Rights and Liabilities of Lessor
1. The lessor is bound to disclose all material defects in the property to the lessee. he must also
disclose all the known latent defects in the property to the lessee. However, he need not disclose
the defects which are discoverable with ordinary care. This based on the principle of "Caveat
Emptor".

2. The lessor is bound to put the lessee in possession of the leased property. The lessee however
must first request the lessor tp out him in possession. If the lessee does not do so and fails to take
possession, then he must not pay the rent for lease.

3. The lessor must indemnify the lessee for all losses incurred by the latter due to the
interruption in the enjoyment of the property. In other words,it is an implied covenant that lessee
will have free and quiet enjoyment of the property. The covenant for title runs with the land.

4. If the lessor transfers the leased property, then the transferee gets all the rights and liabilities
of the lessor. However, for making the transferee liable, the lessee must elect to treat the
transferee as the person liable to him. Further, the transferee is not entitled to any arrears of rent
due before the transfer.

Rights and Liabilities of the Lessee :

1. During the continuation of the lease, if any accession is made to the property, then such
accessed property must also be returned with the main property to the lessor. In other words,
"Accessory follows the principle" in the accessed lands.

2. If part of the property is destroyed by fire then the lease becomes void at the option of the
lessee. However, such destruction of the property must not be due to the wrongful act of the
lessee.

3. If the lessor neglects to make sufficient repairs even after notice by the lessee. The lessee can
make such repairs himself and can deduct the expenses of such repairs with interest from the
rent.
4. If the lessor neglects to make payment of revenue,tax,etc.,then the lessee can make such
payment and deduct such payments from the rent with interest or recover the amount from the
lessor with interest.

5. After the termination of the lease, the lessee can remove all the things, which he had attached
to the earth but the must leave the property in the same state as he received it.

6. If the lease is terminated by some uncertain events, then the lessee or his legal representatives
can get all the crops harvested by them and to have ingress and egress together with the produce
and carry them.

7. The lessee may sub lease or mortgage the property in the absence of any express provision in
the lease deed.

8. The lessee is bound to disclose to the lessor any material increase in the value of the property
known to him only.

9. The lessor is bound to pay the premium or the rent to the lessor or his agent at the proper time
or place.

10. The lessee is bound to keep the property in good condition. He must return the property in
the same condition as he obtained it. He must allow the lessor and his agent to enter upon the
land and inspect the condition of the land at all reasonable time of the day. He must give notice
of all the defects in the land to the lessor.

11. The lessee must use the property as a person of ordinary prudence. He must not use the
property for any purpose other than the purpose for which it was leased.

12. If the lessee becomes aware of any encroachment on the property, he must give immediate
notice to the lessor for taking steps against such encroachment.

13. The lessee must not construct any permanent structure on the leased property without the
lessor's consent. But for agriculture purpose, he can construct such permanent structure, even
without the consent of the lessor.

14. After the termination of the lessee, the lessee is bound to return the leased property to the
possession of the lessor.
Rights of lessor’s transferee

This section deals with the case of an assignment of the reversion, i.e., the lessor's interest. An
assignment of the reversion may be :

(i) an assignment of the whole reversion, or

(ii) an assignment of the reversion in part of the property, or

(iii) Part of an assignment of the reversion.

This section tries to protect the interest of two parties they are the Transferee and the Lessee. In
case of lessee it tries to protect his interest from being doubly liable to the Transferor and
Transferee and in case of Transferee it tries to protect his interest from diversing him all the
Rights of the original Transferor. Supposedly, "sub-tenant, who is in possession, is a tenant only
of his lessor; and he will have neither a privity of contract nor privity of estate so far as the
superior lessor (in the present case the landlord) is concerned. An order of eviction obtained
against the chief tenant can be executed by evicting the sub-tenant who was not made party in
the application for the eviction. Since the rights of a sub-tenant who has not been the party, are
sufficiently protected by the general provisions contained in Order 91, Rules 98 to 103, the
obstructor's rights in the present case are sufficiently protected and the order passed to remove
the obstruction put forward by the obstructor would be correct.

In this Article i have also dealt with the English law provision in this regard and the scope and
applicability of Indian provision.

Principle:-

This section is an illustration of the equitable principle that a man may renounce a right, but not
one coupled with a duty. There can be no renunciation of rights and consequent destruction of
duties prescribed by an absolute law. 2 The principle underlying Sec. 109 of the Act is that the
rights attached to property which arises out of possession and control of property will pass with
the property. "Qui in jus deminiumve alterius succedit jure ejus uti debet". When A ceased to
have any right, title or interest in the suit property he ceased to have any right, title or interest in
the suit property he ceased to be the tenant's landlord and it is B who became the landlord, and
the right to recover rent vested in B with effect from the date of relinquishment.
Whenever there is an assignment of the interest of a lessor or the interest of a lessee in a lease a
new relationship comes into existence between the two sets of persons, one of whom was not
party to the original agreement. In England, at common law, an assignment was not complete
without attornment by the lessee to the assignee of the original lessor except when the
assignment was by will. Later, it was realized that his necessity of an attornment by the lessee
was a restriction on the right of a lessor to transfer and assign his interest in a lease, and so this
necessity of attornment was done away by legislative interference. This Law of Property Act,
1925, which replaced the earlier statute, has also made it clear that in such a situation, attornment
by the lessee was not necessary. In India, in view of sec. 109 of the Act which says that if the
lessor transfers the property leased, the transferee in absence of a contract to contrary shall
possess all the rights, and if the lessee so elects, be subject to all liabilities of the lessor as
to property so transferred, there is no requirement of attornment by the lessee. In view of the
provisions, the assignee of the lessor has against the lessee all the rights that the lessor had and
can enforce not only covenants but even conditions. The right to receive rent from the lessee in
terms of the lease is one of such right which passes to the assignee and a lease cannot say that he
is not bound to pay the same as he has to pay merely because there is no privity of contract
between him and the assignee who is now landlord. The matter will be different if subsequent to
the assignment, any fresh contract is entered into between the new assignee and the lessee to
alter the terms of the lease, including the date of the commencement of the monthly tenancy and
rate of rent which will be payable. The plaintiffs as assignees in absence of any fresh agreement
between them and original lessor, the vendor of the plaintiffs, possessed. If it is held that since
the date of assignment a new tenancy commenced, it will lead to an anomalous position, because
then it will have to be held that after assignment a new tenancy or lease has come into existence,
the terms of which are not known because there has been no agreement between the assignee and
the old lessee or the tenant. In such a situation, it is difficult to hold that since the date of the
assignment a new monthly tenancy is created in eye of law without there being any agreement to
that affect between the parties.6

Scope and Applicability:-

Sec. 109 clearly and obviously deals with the cases where a lessor while there is a subsisting
lease in his favour transfers his interest in the land to a third party, and in that case the third party
or the transferee takes it subject to certain liabilities if the lessor's tenant or lessees so elect. But
where at date of so called transfer the lessor had no interest left in the property leased, it is
difficult to understand how any question can arise of the lessor transferring the property to the
transferee.7

Section 109 applies when the lessor transfers the property leased, or any part thereof, or any part
of his interest therein. When the transfer is of the entire property leased, there is no difficulty and
the transferee get all the rights of the lessor including the right to terminate the tenancy by
issuing a quit notice. In such a case, there is no severance of tenancy and the transferee like the
lessor can terminate the tenancy. There is no difficulty when the lessor transfers a part of his
interest in the property leased. By "any part of his interest" is meant not a fractional share but
something less than the entire interest of the lessor. If the lessor sells the property, the transferee
gets whole of the lessor's interest; but if the lessor, instead of selling the property, mortgages or
leases the property, the interest so transferred is a part of his interest in the property leased. In
such a case also the mortgagee of the lessor or the lessee of the lessor can terminate the lease n
the same manner in which the lessor could have terminated the lease. The difficulty arises only
when the lessor transfers part of the property leased or any part of his interest in a part of
the property leased. The question that then arises is whether the transfer can by a quit notice
terminate the lease in respect of the part of the property transferred to him. Section 109 has the
effect of severing the tenancy in respect of the part of property transferred by the lessor and the
transferee can terminate the tenancy of the part transferred to him. An indication of this is found
in the last clause of Sec. 109 which provides for apportionment of rent in respect of the
transferred even without the consent of the lessee. As enacted therein, the lessor, the transferee
and the lessee may determine what proportion of the premium or rent reserved by the lease is
payable in respect of the part transferred, and, in case they disagree, such determination may be
made by any court having jurisdiction to entertain a suit for the possession of the property leased.
The effect of this clause is to enable apportionment of rent with respect to the part transferred
even without the consent of the lessee by order of the court. The provision for appointment of
rent without the consent of the lessee is an indication that Sec.109 intends to affect a severance
of the lease. A right to terminate the lease by a quit notice is a lessor by virtue of the transfer "as
to the property or part transferred". The section thus enables the transferee to exercise all the
rights of the lessor including the right to termite the lease. The provisions in sec. 109 to continue
the liabilities of the lessor imposed upon him by the lease unless the lessee elects otherwise is on
the principle that a person can only transfer rights and not liabilities unless the person for whose
benefit the liabilities exist consents. The provision so made in sec. 109 applies even when the
transfer is of the whole of the leased and when the transferee admittedly can terminate the
tenancy by a quit notice. Therefore, the continuance by sec. 109 of the liabilities of the lessor
does not show that there is no severance of the lease when a part of a property leased is
transferred and that the transferee of the art cannot terminate the lease of the part transferred to
him. The words "any part of his interest therein" as used in sec. 109 do not refer to any fractional
share but only to an interest which is not the entire interest of the lessor but something less than
that; for example, where the lessor, instead of selling the property leased or a part thereof,
mortgages, or leases the same it would be said that he had transferred a part of his interest
therein. Cases where there is only a transfer of a fractional share in the property leased or in a
part thereof would be governed by sec. 37, and not by sec. 109. A transferee of a share in
the property leased or in any part thereof will become a co-owner with the lessor and will stand
in the same position as a co-lessor.8

There can be no doubt that under sec. 109 of the Transfer of Property Act if a landlord transfers
the property leased or any part of it, the transferee, in the absence of any contract to the contrary,
shall possess all the rights of the landlord. But the transferee cannot acquire any greater or
different right than the transferor had.9

Transfer of Lease Property:-

Section 109 enacts the law laid down in Wordsley Brewery Co v Halford that on the lessor
assigning the reversion wholly or in part, the assignee shall possess all his rights, and be also
subject to all the liabilities of the lessor provided the lessee agrees thereto. By a mere
assignment, the lessor is not discharged from liabilities unless the lessee agrees to exonerate him,
and hold the assignee as the person liable. The transfer may be of the whole property or a part of
it, or it may be a part of the lessor's interest therein. The grant of a lease passes the reversion so
that where a person has let his lands for 30 years, and he lets to another for 40 years, this passes
the reversionary interest.

Determination of Lease
A lease terminates in eight ways:

1) by efflux of time-
2) If the duration of the lease is until the happening of some event-when that event happens.

Thus for instance,if a lease is for twenty years and at the same time made conditional upon life of
lessee, the lease terminates on the death lessee, even if death of lessee takes place within
stipulated period of twenty years; if the lessee does not die within this period lease terminates at
the end of the period.

3)If the lessor's interest in the property is to terminate on the happening of some event- when that
event happens.

This clause operates in cases where the lessor has only limited interest or limited power to grant
a lease. Thus it has been held that a lease by hindu widow who is entitled only to a life-estate
terminates on her death.

4) Merger that is when the interest of the lessee and the lessor in the whole of the property
becomes vested at the same time in one person in same right.

Merger may take place either by act of parties or by operation of law.

5) By express surrender by lessee.

6) By implied surrender by lessee.

Thus if a lessee accepts from his lessor a new lease of leased property to take effect during the
continuance of existing lease, this is an implied surrender of former lease, and such lease
terminates thereupon.

7) By forfeiture
8) on the expiry of a notice to terminate the lease,or to quit (or of intention to quit) the property
leased duly given by one party to the other.

A valid notice must satisfy the following three requisites Viz-

A) It must expressly convey the intention to terminate the tenancy.

B) It must specify the date on which the tenancy is to expire.

C) It must be unconditional. Thus a notice given by a tenant that he will quit when he gets
another suitable accommodation is not valid.

Waiver of forfeiture

Section 112 of the Transfer of Property Act, 1882 lays down the provision regarding the waiver
of forfeiture. It says that forfeiture under section 111, clause (g), is waived by acceptance of rent
which has become due since the forfeiture, or by distress for such rent, or by any other act on the
part of the lessor showing an intention to treat the lease as subsisting. In all these cases the lessor
is estopped from, afterwards, enforcing forfeiture. But, of course, there can be no waiver of that
the lessor does not know., and the rule is therefore subject to the proviso which enacts that lessor
shall not be deemed to have waived forfeiture under any of the above circumstances unless “he is
aware that the forfeiture is incurred” at the time he elects to waive it. This section is intended
only for the benefit of the landlord and whether or not there was a waiver or not there was a
waiver of forfeiture depends upon the action of only one party, namely, the landlord independent
of tenant.

ii. Waiver: Meaning

Waiver is an intentional relinquishment of a known right or such conduct as warrants an
inference of the relinquishment of such right.[9] It was also held in Surendra v. Smt. Panchi Bibi
that the foundation of waiver is the knowledge of the person who said to waive his rights and
there cannot be waiver in ignorance. Unless, therefore, the lessor is aware that forfeiture has been
incurred there cannot be any question of waiver of forfeiture. In the ultimate analysis on the
juristic foundation the concept of waiver is in essence based on agreement. In other words, the
landlord must agree to waive the forfeiture or more accurately the breach of the express
condition which leads to forfeiture.

iii. Waiver of Forfeiture : A Detailed Explanation

Sec 112 enacts that a forfeiture incurred under Sec 111(g) could be waived in any of the
following cases:-

(1) By Acceptance of rent accrued due after thye forfeiture was incurred, but if it be accepted
after institution of an ejectment suit against the lessee it is no waiver.
(2) By distress for rent accrued due after the forfeiture was incurred.
(3) By the lessor doing an act shewing an intention to treat the lease as subsisting.

Provided, that the lessor was aware of his rights that the forfeiture was incurred.

(1) Acceptance of Rent

A forfeiture incurred u/s 111 (g) is waived by the lessor or his agent having a general authority to
receive rent accepting rent accrued due after the forfeiture has been incurred. But acceptance of
rent after institution of a suit to eject lessee on the ground of forfeiture is no waiver. The election
to forfeit is complete and irrevocable once the suit for ejectment is instituted. The acceptance of
rent after the determination of the lease would not amount to waiver since the payment of rent by
a statutory lessee does not amount to lease money in the true sense of rent but it is a statutory
solatium which a lessee is required to pay to the landlord, there being no element of contractual
liability. Therefore, in W. Suryabhan v. Maharashtra Revenue Tribunal, Nagpur, where the
landlord recovers the rent from statutory lessee after obtaining an order of termination of lease
under Berar Regulation of Agricultural Leases Act, 1951, it was held that there is no waiver of
his right to obtain the possession of land. The institute of the suit is simply a mode of
manifesting the possession of land. On re-admission after determination of the tenancy upon the
forfeiture the old tenancy is not revived. The lessee is bound to pay compensation for use and
occupation.

Also the waiver of the past breaches does not preclude the lessor from enforcing forfeiture when
the same or any other condition is subsequently broken, the condition being such that the breach
thereof provides for re-entry.

The rent accepted which is pleaded as a waiver under Sec. 112, T.P. Act, must have accrued after
the date of the forfeiture and not prior to it.
Distress for rent
Forfeiture is waived by distress for rent due since the forfeiture. In case of a continuing forfeiture
as for non-repair, there is no waiver after the time of distress. Distress is regulated by the
Presidency Small Causes Courts Act.

However, proviso 1 of the Sec.112 lays down that no waiver is operative unless the lessor waives
with knowledge that the forfeiture has been incurred. The onus would be on the lessee to prove
knowledge of the lessor. Similarly the Proviso 2 expressly says that where rent is accepted after
the institution of suit to eject lessee on ground for forfeiture, such acceptance is not a waiver. In
State v SS Devi, it was held that he rent claimed for the period subsequent to the forfeiture in a
suit for eviction on ground of forfeiture can be accepted by the landlord only after the institution
of the suit. It was further laid down that if the acceptance itself does not amount to waiver, the
mere claim acceptance in respect whereof can take place only after the institution of the
institution cannot be said to be under the mischief of the clause ‘any other act on the part of the
lessor showing an intention to treat the lease as subsisting’ in Sec112. Once the election to forfeit
is complete and irrevocable by the institution of the suit, claim for rent in that suit cannot be
taken as waiver of forfeiture.
However, there is an exception to the general rule. The section provides that acceptance of rent
due after forfeiture has been incurred is not waiver, if it be accepted after the institution of a suit
in ejectment against the lessee.

Scope of the Section

An act of forfeiture on the part of the tenants as contemplated by Cl. (g) of sec 111 of the Act
only renders the lease voidable at the option of the landlord. The landlord, after such forfeiture
has taken place by the happening of any of the event specified in Cl. (g) of the Sec 111, is
obliged to make an election as soon as he becomes aware of the tenant’s default either to forfeit
the lease or alternatively to treat the lease as still continuing by waiving the act of forfeiture.
Essentially, the rule of waiver of forfeiture is designed to prevent the landlord from taking two
consistent positions. He cannot be allowed to both approbate or reprobate. But if he chooses to
do something such as demanding or receiving the rent which can only be so consistently with the
existence of continuance of lease or tenancy he cannot thereafter be heard to say that he has
elected the forfeiture. The waiver of a right to forfeit is to be treated as an aspect of wider
doctrine of election. However, Halsbury has observed that a landlord does not waive the
forfeiture by merely standing by and seeing it occur where, for instance, the tenant makes
alterations in breach of covenant and the landlord does not interfere; there must be some positive
act of waiver.

Similarly, as per Sec 111(h) of the Act, lease is also determined by a notice to quit which is
explained hereunder.

Determination of lease by Notice to Quit

Sec 111(h) talks about the determination of lease by notice to quit. A lease may be terminated by
a notice to quit given by the lessor, or of his intention to quit given by the lessee. A lease may be
terminated on the expiration of a notice to determine the lease, or to quit, or of intention to quit,
the property leased, duly given by one party to another. In other words, a tenancy at will is
terminated by a demand for possession. A tenancy for a fixed term determines on the expiration
of the term. A periodic tenancy, however, is terminated only by a proper notice to quit. Since
notice is a unilateral act performed in the exercise of a contractual right, it must conform to the
terms of the contract; and the onus of proof of its validity is upon the person who gives it.
Waiver of Notice to Quit
According to Section 113 of the Transfer of Property Act, 1882; a notice to quit is waived with
the implied or express consent of the person to whom it is given, by any act on the part of the
person giving it showing an intention to treat the lease as subsisting.

Principle
Once a valid notice is given, the tenancy will be determined upon its expiration. The parties can
waive the notice. The consent of the parties makes a new agreement. The parties can nullify the
operation of the notice as to quitting, by agreeing upon a new tenancy, whether on the terms of
the former or not, to commence from the time of its expiration. However the tenant has to
establish that the rent taken by the landlord was legal rent indicating his assent to the former’s
continuing in possession.

A waiver of notice to quit cannot be merely inferred by an act on part of one of the parties and
either one of the actions or any act which thereby does not spell a contract or agreement between
the parties to a particular effect spelling a waiver. Waiver essentially presupposes an election by
the landlord and also on the part of the tenant where the tenant consents to the notice being
waived. An election is not a matter of inference but is a matter of positive choice. Hence an
election should not be merely inferred from the circumstances that after the institution of the suit
for the ejectment, payment was received by the landlord.

Section 113 would come into picture only when there is an act on the part of the lessor showing
an intention to treat the lease as subsisting. There could not be any occasion for the landlord to
show such an intention when he has already filed a suit on the basis of the termination of
tenancy. In such a case, it is the suit that has to be decided and mere payment of some amount of
rent would be irrelevant, unless a party pleads and proves that on account of the said payment,
there was a compromise of the suit.

ii. Detailed Explanation of the section

In order to understand the provision properly, a detailed explanation is required which is
explained under.

According to the section, once a valid notice to quit has been served it automatically brings the
tenancy to an end on the expiration of the notice and cannot be withdrawn or waived. After a
valid notice to quit has been served, however, the landlord and the tenant may expressly or by
implication for the grant of a new tenancy to take effect on the expiry of the notice.
Questions of waiver usually arise when some act is done by the landlord after the expiration of
the notice, which either necessarily or prima facie imports the recognition of an existing
tenancy.Where a landlord having instituted a suit pursues it in spite of receiving rent, there is no
question of waiver, although he may not specifically call it compensation for use and occupation
and may inaccurately call it rent.
The payment of the rent by the tenant for a period subsequent to the termination of the tenancy
and acceptance of the same has been laid down as a statutory proof of the intention of both the
parties to treat the lease as subsisting. Undoubtedly, it one of the modes of proof of the
agreement to treat the lease as subsisting. But the amount is paid as rent and received as such.

In order to constitute waiver the two ingredients must exists concurrently. Otherwise, the act of
acceptance of rent by itself without reference to the intention of the lessor cannot be deemed to
be waiver. In addition to the receipt of the rent by the landlord to establish waiver there should
be other conclusive evidence to show that the landlord is inclined to treat the lease as subsisting.

The notice can be waived by the mutual consent of the lessor and the lessee. The consent of the
lessee can be given expressly or by implication, it can be inferred and the intention on part of the
lessor to continue to treat the lease as subsisting can be shown by any act of the lessor. The
acceptance of rent expiry of the notice by itself may not constitute waiver. But it is an act on the
part of the lessor which will go to show the intention on his part to treat the lease as subsisting. If
after the service of notice landlord accepts rent Section 113 of the Act will be attracted.
The acceptance of rent subsequent to the filing of the suit will not operate as a waiver in the
usual course. There is no warrant for the view that mere receipt of rent, whatever may be the
intention of the lessor, should be of its own force, divorced from the circumstances of the case,
be regarded as amounting to a waiver.

Scope of the Section

If after determining the tenancy by notice the landlord chooses to accept rent again from the
tenant, a notice for determination of the lease already given by the landlord to the tenant will be
deemed to have been waived. No question of waiver arises after the landlord has brought a suit
on the basis of a valid notice given for determination of the lease, though it is always open for
the landlord to renew the lease at any time he pleases.
Section 113 clearly indicates that there should be an indication on part of both lessor and lessee.
In order to determine the question of waiver of a notice to quit, it is necessary to find out from
the conduct of the landlord, whether the lease is intended to be treated as subsisting or not.

Applicability
Section 113 of The Transfer of Property Act, 1882 can hardly come into play in the case of a
statutory tenant, that is, a person who is entitled to remain in possession of the premises by virtue
of the provisions of a Rent Control Act. Section 113 is restricted to a notice given under Section
111(h) of The Transfer of Property Act, 1882, namely, the consequences of waiving a notice to
determine the lease or to quit the property. However, in the case of a statutory lease, he is bound
to pay the amount of lease money not only till the statutory lease comes to end by an order of the
Court but until possession is given. The right being created by statute, the corresponding
obligation to pay the statutory rent until possession is delivered is implicit in such a situation.[43]

v. Impact of Rent Control Legislation

The Rent Restriction Act creates a kind of statutory tenancy with certain incidents not to be
found in ordinary relation of landlord and tenant. Under such an Act a tenant includes which
under the ordinary law of landlord tenant is an ex-tenant. In an English decision,[44] it is made
clear that the tenant governed by the Rent Restriction Act continues to be in possession even
after the notice to quit and if the tenant pays rent, the landlord has no choice but to accept it and
cannot sue for trespass or for mesne profits because it is provided in The Transfer of Property
Act, 1882, that notwithstanding notice to quit the tenant cannot be treated as a trespasser so long
as he pays rent and performs other conditions of the lease.
 CHAPTETR-II

LEGISLATIVE PROVISION
SECTION 105.

Lease defined.—

A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain
time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of
money, a share of crops, service or any other thing of value, to be rendered periodically or on
specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is
called the lessee, the price is called the premium, and the money, share, service or other thing to
be so rendered is called the rent.

SECTION106.

Duration of certain leases in absence of written contract or local usage.—

(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable
property for agricultural or manufacturing purposes shall be deemed to be a lease from year to
year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of
immovable property for any other purpose shall be deemed to be a lease from month to month,
terminable, on the part of either lessor or lessee, by fifteen days' notice.

(2) Notwithstanding anything contained in any other law for the time being in force, the period
mentioned in sub-section (1) shall commence from the date of receipt of notice.

(3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period
mentioned therein falls short of the period specified under that sub-section, where a suit or
proceeding is filed after the expiry of the period mentioned in that sub-section.

(4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person
giving it, and either be sent by post to the party who is intended to be bound by it or be tendered
or delivered personally to such party, or to one of his family or servants at his residence, or (if
such tender or delivery is not practicable) affixed to a conspicuous part of the property.]

SECTION-108.

Rights and liabilities of lessor and lessee.—

In the absence of a contract or local usage to the contrary, the lessor and the lessee of
immoveable property, as against one another, respectively, possess the rights and are subject to
the liabilities mentioned in the rules next following, or such of them as are applicable to the
property leased:—

(A) Rights and Liabilities of the Lessor

(a) The lessor is bound to disclose to the lessee any material defect in the property, with
reference to its intended use, of which the former is and the latter is not aware, and which the
latter could not with ordinary care discover;

(b) the lessor is bound on the lessee’s request to put him in possession of the property;

(c) the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved
by the lease and performs the contracts binding on the lessee, he may hold the property during
the time limited by the lease without interruption. The benefit of such contract shall be annexed
to and go with the lessee’s interest as such, and may be enforced by every person in whom that
interest is for the whole or any part thereof from time to time vested.

(B) Rights and Liabilities of the Lessee

(d) If during the continuance of the lease any accession is made to the property, such accession
(subject to the law relating to alluvion for the time being in force) shall be deemed to be
comprised in the lease;

(e) if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible force, any
material part of the property be wholly destroyed or rendered substantially and permanently unfit
for the purposes for which it was let, the lease shall, at the option of the lessee, be void: Provided
that, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be
entitled to avail himself of the benefit of this provision;

(f) if the lessor neglects to make, within a reasonable time after notice, any repairs which he is
bound to make to the property, the lessee may make the same himself, and deduct the expense of
such repairs with interest from the rent, or otherwise recover it from the lessor;

(g) if the lessor neglects to make any payment which he is bound to make, and which, if not
made by him, is recoverable from the lessee or against the property, the lessee may make such
payment himself, and deduct it with interest from the rent, or otherwise recover it from the
lessor;

(h) the lessee may 1[even after the determination of the lease] remove, at any time 2[whilst he is
in possession of the property leased but not afterwards] all things which he has attached to the
earth; provided he leaves the property in the state in which he received it;

(i) when a lease of uncertain duration determines by any means except the fault of the lessee, he
or his legal representative is entitled to all the crops planted or sown by the lessee and growing
upon the property when the lease determines, and to free ingress and egress to gather and carry
them;

(j) the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of
his interest in the property, and any transferee of such interest or part may again transfer it. The
lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities
attaching to the lease; Nothing in this clause shall be deemed to authorise a tenant having an
untransferable right of occupancy, the farmer of an estate in respect of which default has been
made in paying revenue, or the lessee of an estate under the management of a Court of Wards, to
assign his interest as such tenant, farmer or lessee;

(k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest
which the lessee is about to take, of which the lessee is, and the lessor is not, aware, and which
materially increases the value of such interest;

(l) the lessee is bound to pay or tender, at the proper time and place, the premium or rent to the
lessor or his agent in this behalf;
(m) the lessee is bound to keep, and on the termination of the lease to restore, the property in as
good condition as it was in at the time when he was put in possession, subject only to the
changes caused by reasonable wear and tear or irresistible force, and to allow the lessor and his
agents, at all reasonable times during the term, to enter upon the property and inspect the
condition thereof and give or leave notice of any defect in such condition; and, when such defect
has been caused by any act or default on the part of the lessee, his servants or agents, he is bound
to make it good within three months after such notice has been given or left;

(n) if the lessee becomes aware of any proceeding to recover the property or any part thereof, or
of any encroachment made upon, or any interference with, the lessor’s rights concerning such
property, he is bound to give, with reasonable diligence, notice thereof to the lessor;

(o) the lessee may use the property and its products (if any) as a person of ordinary prudence
would use them if they were his own; but he must not use, or permit another to use, the property
for a purpose other than that for which it was leased, or fell 3[or sell] timber, pull down or
damage buildings [belonging to the lessor, or] work mines or quarries not open when the lease
was granted, or commit any other act which is destructive or permanently injurious thereto;

(p) he must not, without the lessor’s consent, erect on the property any permanent structure,
except for agricultural purposes;

(q) on the determination of the lease, the lessee is bound to put the lessor into possession of the
property.

109. Rights of lessor’s transferee.—If the lessor transfers the property leased, or any part thereof,
or any part of his interest therein, the transferee, in the absence of a contract to the contrary, shall
possess all the rights, and, if the lessee so elects, be subject to all the liabilities of the lessor as to
the property or part transferred so long as he is the owner of it; but the lessor shall not, by reason
only of such transfer cease to be subject to any of the liabilities imposed upon him by the lease,
unless the lessee elects to treat the transferee as the person liable to him: Provided that the
transferee is not entitled to arrears of rent due before the transfer, and that, if the lessee, not
having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall
not be liable to pay such rent over again to the transferee. The lessor, the transferee and the
lessee may determine what proportion of the premium or rent reserved by the lease is payable in
respect of the part so transferred, and, in case they disagree, such determination may be made by
any Court having jurisdiction to entertain a suit for the possession of the property leased.

SECTION-109.

Rights of lessor’s transferee.—

If the lessor transfers the property leased, or any part thereof, or any part of his interest therein,
the transferee, in the absence of a contract to the contrary, shall possess all the rights, and, if the
lessee so elects, be subject to all the liabilities of the lessor as to the property or part transferred
so long as he is the owner of it; but the lessor shall not, by reason only of such transfer cease to
be subject to any of the liabilities imposed upon him by the lease, unless the lessee elects to treat
the transferee as the person liable to him: Provided that the transferee is not entitled to arrears of
rent due before the transfer, and that, if the lessee, not having reason to believe that such transfer
has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to
the transferee. The lessor, the transferee and the lessee may determine what proportion of the
premium or rent reserved by the lease is payable in respect of the part so transferred, and, in case
they disagree, such determination may be made by any Court having jurisdiction to entertain a
suit for the possession of the property leased.

SECTION-110

Exclusion of day on which term commences.—

Where the time limited by a lease of immoveable property is expressed as commencing from a
particular day, in computing that time such day shall be excluded. Where no day of
commencement is named, the time so limited begins from the making of the lease. Duration of
lease for a year.—Where the time so limited is a year or a number of years, in the absence of an
express agreement to the contrary, the lease shall last during the whole anniversary of the day
from which such time commences. Option to determine lease.—Where the time so limited is
expressed to be terminable before its expiration, and the lease omits to mention at whose option
it is so terminable, the lessee, and not the lessor, shall have such option.

111. Determination of lease.—A lease of immoveable property determines—

(a) by efflux of the time limited thereby;

(b) where such time is limited conditionally on the happening of some event—by the happening
of such event;

(c) where the interest of the lessor in the property terminates on, or his power to dispose of the
same extends only to, the happening of any event—by the happening of such event;

(d) in case the interests of the lessee and the lessor in the whole of the property become vested at
the same time in one person in the same right;

(e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to
the lessor, by mutual agreement between them;

(f) by implied surrender;

(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides
that, on breach thereof, the lessor may re-enter 1[* * *]; or (2) in case the lessee renounces his
character as such by setting up a title in a third person or by claiming title in himself; 2[or (3) the
lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the
happening of such event]; and in 3[any of these cases] the lessor or his transferee 4[gives notice
in writing to the lessee of] his intention to determine the lease;

(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the
property leased, duly given by one party to the other. Illustration to clause (f) A lessee accepts
from his lessor a new lease of the property leased, to take effect during the continuance of the
existing lease. This is an implied surrender of the former lease, and such lease determines
thereupon. COMMENTS Doctrine of merger The doctrine of merger is attracted when a
leasehold and revision coincide. If the lessee purchases the lessor’s interest, the lease is
relinquished as the same person cannot at the same time be both landlord and tenant. The
doctrine of merger is based on the principle of union of two conflicting interests which cannot be
held by one person at the same time. Therefore, the leasehold rights in favour of the appellants
stand extinguished; Ramesh Kumar Jhambh v. Official Assignee, High Court Bombay, AIR
1993 Bom 374. Implied surrender There can be implied surrender, if the lessor grants a new
lease to a third person with the assent of the lessee under the existing lease who delivers the
possession to such person or where the lessee directs his sub-tenant to pay the rent directly to the
lessor. Since the respondents had by executing the agreement impliedly surrendered their
leasehold rights, they were no longer lessees; P.M.C. Kunhiraman Nair v. C.R. Nagaratha Iyer,
AIR 1993 SC 307. Clause (1) of section 111(g) has no application as there was no covenant
prohibiting sale or on its breach, of the right of re-entry. Clause (2) of section 111(g) is also of no
avail to the landlord for forfeiture because there is no unequivocal and clear disclaimer of title of
the landlord. Therefore neither clause (1) nor (2) of section 111(g) are of any avail for forfeiture;
Guru Amarjit Singh v. Rattan Chand, AIR 1994 SC 227. The statement by the tenant that he was
not aware of as to who was his landlord cannot be held to be denial of title of landlord and no
eviction decree by forfeiture was granted; Munisami Naidu v. C. Ranganathan, AIR 1991 SC
492. It has been held that the Board was entitled to institute proceedings against the tenant as the
notice period had expired; Vasant Kumar Radhakishan Vora v. The Board of Trustees of the Port
of Bombay, AIR 1991 SC 14.

SECTION-112.

Waiver of forfeiture.—

A forfeiture under section 111, clause (g) is waived by acceptance of rent which has become due
since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor
showing an intention to treat the lease as subsisting: Provided that the lessor is aware that the
forfeiture has been incurred: Provided also that, where rent is accepted after the institution of a
suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver.

SECTION-113

Waiver of notice to quit.

A notice given under section 111, clause (h), is waived, with the express or implied consent of
the person to whom it is given, by any act on the part of the person giving it showing an intention
to treat the lease as subsisting. Illustrations

(a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice expires. B
tenders and A accepts, rent which has become due in respect of the property since the expiration
of the notice. The notice is waived.
(b) A, the lessor, gives B, the lessee; notice to quit the property leased. The notice expires, and B
remains in possession. A gives to B as lessee a second notice to quit. The first notice is waived.

114. Relief against forfeiture for non-payment of rent.—Where a lease of immoveable property
has determined by forfeiture for non-payment of rent, and the lessor sues to eject the lessee, if, at
the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with
interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient
for making such payment within fifteen days, the Court may, in lieu of making a decree for
ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall
hold the property leased as if the forfeiture had not occurred.

SECTION-114A.

Relief against forfeiture in certain other cases.

Where a lease of immoveable property has determined by forfeiture for a breach of an express
condition which provides that on breach thereof the lessor may re-enter, no suit for ejectment
shall lie unless and until the lessor has served on the lessee a notice in writing—

(a) specifying the particular breach complained of; and

(b) if the breach is capable of remedy, requiring the lessee to remedy the breach, and the lessee
fails, within a reasonable time from the date of the service of the notice, to remedy the breach, if
it is capable of remedy. Nothing in this section shall apply to an express condition against the
assigning, under-letting, parting with the possession, or disposing, of the property leased, or to an
express condition relating to forfeiture in case of non-payment of rent.]

SECTION-115.

Effect of surrender and forfeiture on under-leases.

The surrender, express or implied, of a lease of immoveable property does not prejudice an
under-lease of the property or any part thereof previously granted by the lessee, on terms and
conditions substantially the same (except as regards the amount of rent) as those of the original
lease; but, unless the surrender is made for the purpose of obtaining a new lease, the rent payable
by, and the contracts binding on, the under-lessee shall be respectively payable to and
enforceable by the lessor. The forfeiture of such a lease annuls all such under-leases, except
where such forfeiture has been procured by the lessor in fraud of the under-lessees, or relief
against the forfeiture is granted under section 114.

SECTION116.

Effect of holding over

If a lessee or under-lessee of property remains in possession thereof after the determination of

the lease granted to the lessee, and the lessor or his legal representative accepts rent from the
lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the
absence of an agreement to the contrary, renewed from year to year, or from month to month,
according to the purpose for which the property is leased, as specified in section 106.
Illustrations

(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100.
The five years expire, but C continues in possession of the house and pays the rent to A. C’s
lease is renewed from month to month.

(b) A lets a farm to B for the life of C. C dies, but B continues in possession with A’s assent. B’s
lease is renewed from year to year. COMMENTS Tenant at sufferance A person who is a tenant
at sufferance has no estate or interest in the leasehold property. A tenant holding after the expiry
of his term is a tenant at sufferance, which is a term useful to distinguish a possession rightful in
its inception but wrongful in its continuance from a trespass which is wrongful both in its
inception and in its continuance. A co-owner can maintain a suit by himself in ejectment of a
trespasser or a tenant at sufferance; B. Valsala v. Sundram Nadar Bhaskaran, AIR 1994 Ker 164.

SECTION-117

Exemption of leases for agricultural purposes.

None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far
as the State Government 1[***] may by notification published in the Official Gazette declare all
or any of such provisions to be so applicable 2[in the case of all or any of such leases], together
with, or subject to, those of the local law, if any, for the time being in force. Such notification
shall not take effect until the expiry of six months from the date of its publication.

CHAPTER-III

JUDICIAL ANALYSIS