LEASE
TPA PROJECT
SUBMITTED TO: SUBMITTED BY
DR. RAJINDER KAUR PARTEEK SINGH KHER
UILS, PANJAB UNIVERSITY BA LLB, SEMESTER-
CHANDIGARH ROLL NO: 159/20
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ACKNOWLEDGEMENT
The success and completion of this project required
assistance from many people and I am extremely
fortunate to get this help
I take this opportunity to thank my teacher, Dr. Rajinder
kaur, University Institute of Legal Studies, Chandigarh,
for her unmatched guidance, suggestions and efforts
made by her for the preparation of our projects
I also owe my regards to the entire faculty of UILS, from
where learnt the basics of law.
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CONTENTS
SERIAL NO TITLE PAGE NO
1 INTRODUCTION 4
2 ESSENTIALS OF A LEASE 5
3 WHAT HAPPENS WHEN 6
THE LEASE AGREEMENT
DOES NOT PRESCRIBE THE
TIME PERIOD OF THE
LEASE
4 HOW IS A LEASE EXECUTED 8
5 RIGHTS AND LIABILITIES 9
OF LESSOR AND LESSEE
6 DETERMINATION OF LEASE 14
7 WHAT IS NOTICE TO QUIT 15
AND WHAT HAPPENS
AFTER IT
8 EFFECT OF HOLDING OVER 18
9 CASE LAWS 19
10 CONCLUSION 21
11 BIBLIOGRAPHY 22
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INTRODUCTION
In India, transfer of property is not possible for every
individual because of nancial issues. The permanent or
absolute transfer is a luxury for some people, but a
temporary transfer is something that has given every citizen
the right of enjoying any property. One of the modes of
transferring property for a particular period of time is
Lease. Lease is a transfer of an interest in the property for a
stipulated period of time without transferring the
ownership of that property. In a lease, right of possession is
transferred instead of the right of ownership. Transferor
here is called the lessor and the transferee i.e. the one
enjoying the property for a period is called lessee. Lease is
governed by the Transfer of Property Act, 1882 and it is
given from Sections 105 to 117
Section 105 states the de nition of a lease which states that
it is a transfer of immovable property for a particular time
period for a consideration of which the transferee has
accepted the terms surrounding the agreement
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ESSENTIALS OF A
LEASE
• Parties must be competent: The parties in a lease
agreement should be competent to enter into a contract.
Lesser should be entitled to a property and have
absolute rights over that property
• Right of possession: Ownership rights are not
transferred in a lease, only the possession of the
property is transferred
• Rent: Consideration for a lease can be taken in the form
of a rent or premium
• Acceptance: Lessee, who is to get the interest in the
property after lease, has to accept the lease agreement
along with the time period and terms & conditions
imposed on the transfer
• Time Period: Lease always takes place for a particular
time period which is to be speci ed in the lease
agreement. It can be relaxed at the option of the lessor.
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What happens when the
lease agreement does not
prescribe the time period
of the lease?
Section 106 provides for the duration of the lease in the
absence of the lease agreement. It lays down that in the
absence of a contract, lease can be ended by both parties to
the lease by issuing a notice to quit. The prescribed time
period always commences from the date of receiving the
notice to quit. Following are the circumstances
Term Prescribed
Purpose Notice
(Deemed) End
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Agricultural or Year to
mont 1 year
manufacturing purpose. Year
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Month to 15
Any other purpose. 1 month
Month days
In this table, there is a distinction of two purposes in regard
to Section 106 i.e. Agricultural or manufacturing and other
purposes. Hence, two things can be derived from this table
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1. When a lease for Agricultural or manufacturing
purpose is deemed to be of year to year, then it will
attract a 6-month notice that the lease will end on the
expiry of 1 year from the date of the commencement of
the lease
2. When a lease for any other purpose is deemed to be of
the month to month, then it will attract a 15-day
notice that the lease will end on the expiry of 1 month
from the commencement of the lease
There is proviso to this section which states that the notice
to quit in this section should be written and conveyed to the
party who is required to abide by it. If this is not possible
then it should be attached to a conspicuous place in that
property
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How is a lease executed?
Section 107 states about lease how made. This section
covers three aspects
1. When there is a lease of Immovable property for a term
of 1 year or more – This can only be made by a
registered deed
2. All other leases of Immovable property – Can be either
made by a registered deed or an oral agreement or
settlement along with the transfer of possession of that
property
3. When the lease is of multiple properties that require
multiple deeds, it will be made by both the parties of
the lease
In the case of Punjab National Bank v. Ganga Narain
Kapur (1.), Court held that if the lease is done through an
oral agreement, then the provisions of Section 106 will
apply
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Rights and liabilities of
Lessor and lessee
Rights of the lessor ar
1. A lessor has a right to recover the rent from the lease
which was mentioned in the lease agreement
2. Lessor has a right to take back the possession of his
property from the lessee if the lessee commits
any breach of condition
3. Lessor has a right to recover the amount of
damages from the lessee if there is any damage done to
the property
4. Lessor has a right to take back the possession of his
property from the lessee on the termination of the
lease term prescribed in the agreement
Liabilities of the lesso
1. The lessor has to disclose any material defect relating
to the property which the lessee does not know and
cannot with ordinary supervision nd out
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2. Lessor is bound by the request of the lessee to give
him the right of possession over his property
3. Lessor can enter into a contract with the lessee if he
agrees to abide by all terms and conditions prescribed
in the agreement, he can enjoy the property for the rest
of the time period without any interference with
an obligation to pay the rent later on
Rights of the Lesse
1. During the period lease is in effect if any alteration is
made (alluvion for the time being in force) then that
alteration will come under that same lease
2. If a signi cant part of the property that has been leased
is destroyed wholly or partly by re, by ood, by war,
by the violent acts of the mob or by any other means
resulting in its inef ciency of being a bene t for the
lessee. If this happens, the lease is voidable at his
option
There is a proviso to this section that states if the damage is
done due to any act of the lessee himself, this remedy will
not be available for him
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1. Lessee has the right to deduct any expenses he has
made for repairs in the property from the rent if the
lessor has failed to in reasonable time
2. Lessee has a right to recover any such payment which a
lessor is bound to make by can deducting it from the
interest of the rent or directly from the lessor. He has
this right when the lessor has neglected to make that
required payment
3. Lessee has a right to detach all things that he may have
attached in the property or earth. His only obligation is
that he has to leave the property in the same condition
as he received it
4. When a lease is of unspeci ed duration in the lease
agreement, lessee or his legal representative have a
right to collect all the pro ts or bene ts from the crops
which were sown by the lessee at that property. They
also have a right of free ingress and egress from such
property even if the lease ends
5. Lessee has a right to transfer absolutely the property or
any part of his interest in that property by sub-leasing
or through mortgaging. Lessee is not independent of
the terms and conditions mentioned in the lease
agreement
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Liabilities of the lesse
1. Lessee is under an obligation to disclose all related
material facts which are likely to increase the value of
the property for which the lessee has an interest in and
the lessor is not aware of
2. Lessee is under an obligation to pay the rent or
premium which is settled upon in the agreement to the
lessor or his agent within the prescribed time
3. Lessee is under an obligation to maintain the property
in the condition that he initially got the property on
commencement of the lease and he has to return it in
the same condition
4. If lessee gets to know about any proceedings relating to
the property or any encroachment or any interference,
then lessee is under an obligation to give notice to the
lessor
5. Lessee has a right to use all the assets and goods which
are on the property as an owner would use which is
preserving it to the best of its nature. He is although
under obligation to prevent any other person from
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using that asset or good for any other purpose from
what was prescribed in the lease agreement
6. The lessee cannot attach any permanent structure
without the consent of the lessor except for the purpose
of agriculture
7. Lessee is under an obligation to give the possession of
the property back to the lessor after the expiry of the
prescribed term of the lease.
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Determination of lease
Section 111 states about the determination of the lease,
which lays down the ways in which lease is terminated
1. Lapse of time – When the prescribed time of the lease
expires, the lease is terminated
2. Speci ed event – When there is a condition on time of
lease depending upon a happening of an event
3. Interest – Lessor’s interest to lease the property may
cease, hence resulting in the termination of the lease
4. Same owner – When the interest of both lessor and
lessee are transferred or vested in the same person
5. Express Surrender – This happens when the lessee
ceases to have an interest in the property and comes
into a mutual agreement with the lessor
6. Implied Surrender – When the lessee enters into a
contract with another for the lease of property, this is
an implied surrender of the existing lease
7. Forfeiture – There are three ways by which a lease can
be terminated:
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What is notice to quit
and what happens after
it?
Notice to quit is a formal written statement that is issued to
the lessee if the lessor desires to end the lease agreement,
whether on the expiry of the duration as stated under
Section 106 or on grounds speci ed in Section 111
Any lease can be forfeited as mentioned in the sub-clause
(g) of Section 111, by acceptance of the notice to quit
But Section 112, states that if the lessor after initiating the
process of termination of the lease on the grounds of
forfeiture accepts any rent from the lessee, it will be
understood that the lease will still exist and the termination
and notice to quit has been waived
Section 113 provides two ways in which the notice can be
waived, that is expressly or impliedly
1. Express Waiver of notice to quit – When a lessor
accepts the rent from the lessee after the notice to
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quit has been served, this is called express waiver
of notice to quit
2. Implied Waiver of notice to quit – When a lessor
issues notice to quit to the lessee, and upon expiry
of that notice, lesser issues another notice to quit to
the lessee. The rst notice to quit is impliedly
waived
Waiver of notice also shows the intention to continue the
existing lease
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• When there is a breach of an express condition by the
lessee. The lessor may get the possession of the
property back
• When lessee renounces his character or gives the title
of the property to a third person
• When the lessee is termed as insolvent by the banks,
and if the conditions provide for it, the lease will stand
terminated
8. Expiry of Notice to Quit – When the notice to quit by the
lessor to the lessee expires, the lease will also expire
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Effect of Holding over
Section 116 states about the effect of holding
overlays down that if there has been a waiver of notice to
quit, it will not be called a new lease instead it will be called
as a lease on sufferance or tolerance without objecting
against it. The term ‘Holding over’ stands for retained
possession of a property which has been leased. After this,
the lease is renewable as any normal lease and in the way
prescribed in Section 106
This section provides that if the lessor agrees to the holding
over of the property by the lessee, it will be renewed. But if
the lessor does not entertain the retained possession by the
lessee, he can initiate suit proceedings against him on
grounds of trespass or tenant at sufferance.
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CASE LAWS
1. State Bank of Hyderabad v. Nehru Palace Hotels,
AIR 1991 SC 2130
In this case, the Court held that a lease entails transfer of right
to enjoy such property in respect of which a lease is made out
for a de ned time which is express or implied or even in
perpetuity in consideration of price paid or promised to be paid
in cash or anything of value which is to be rendered
periodically or on speci ed occasions
2. Bengal A &I Corporation vs. Corporation of
Calcutta, AIR 1960 Cal 123 (133)
In this case, the Court held that the subject matter of lease must
be ascertained, and clearly de ned. If the land is yet to be
ascertained and carved out of a larger parcel of land, there
cannot be a demise. (Demise refers to premises that have been
transferred by lease, as opposed to the ‘retained parts’ which
are not transferred but are retained by the landlord.
3. Jaswant Singh Matharu v. Ahmedabad
Municipal Corporation, AIR 1991 SC 2130
In this case, the Court held that a lease creates a right or an
interest in enjoyment of demised property and a tenant or a
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subtenant is entitled to remain in possession of the demised
property until the leases are dully terminated and eviction
takes place in accordance with the law
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CONCLUSION
Lease is a very important aspect of real life. Every person
has witnessed a lease deal involving renting of a house, car
or etc. Therefore it is important for the general public to
know about the rights of every individual in a lease, and to
know about the provisions that govern lease
The lease is mentioned from Sections 105 to Section 117, out
of which Sections which may help the general public, law
students and the legal fraternity have been discussed in this
article to give clari cation and a basic idea about the lease
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BIBLIOGRAPHY
• indiankanoon.org
• Latestlaws.com
• legalpathshala.com
• G.P. Tripathi boo
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