PROPERTY Final Draft

1 Rights and Liabilities of Lessee
NYAYA NAGAR MITHAPUR,PATNA-800001
RIGHTS AND LIABILITIES OF LESSEE
ROUGH DRAFT SUBMITTED IN THE PARTIAL FULFILMENT OF THE COURSE TITLED-
PROPERTY LAW
Submitted To:-
Dr. B.R.N. Sharma

CHANAKYA NATIONA L LAW UNIVERSITY
Faculty of Property Law
Submitted By:-
Vivek Kumar
Roll no. : - 1775
Semester: - 3rd
Session : - 2017-2022
Course:B.A.,LL.B.(Hons.)
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DECLARATION
I hereby declare that the work reported in the B.A., LL.B. (Hons.) Project
Report entitled “Rights And Liabilities of Lessee” submitted at Chanakya
National Law University, Patna is an authentic record of my work carried out
under the supervision of Dr.B.R.N Sharma I have not submitted this work
elsewhere for any other degree or diploma. I am fully responsible for the
contents of my Project Report.
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ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide
Dr. B.R.N Sharma for his exemplary guidance, monitoring and constant encouragement
throughout the course of this research. The blessing, help and guidance given by him time to
time shall carry me a long way in the journey of life on which I am about to embark.
I also take this opportunity to express a deep sense of gratitude to Dr. B.R.N Sharma for
providing me this research topic and for her cordial support, valuable information and
guidance, which helped me in completing this task through various stages.
Lastly, I thank almighty, my parents, brother and friends for their constant encouragement
without which this assignment would not be possible.
Thank You!
Vivek Kumar
Roll no:- 1775
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TABLE OF CONTENTS
1. Introduction....................................................................................................pg.05
2. Concept of Lease....................................................................................pg.07
3. Rights And Liabilities of Lessee- A Critical Study of Relevant Provision.pg.16
4. Case Laws...............................................................................................pg.21
5. Conclusion............................................................................................pg.26
 Bibliography...........................................................................................pg.29
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1. INTRODUCTION
It is settled principle that contract create some rights and liabilities for both parties. As lease
is made through some contract,therefore it also creates some rights and liabilities for both
lessor and lessee. A lease is a transfer of a right to enjoy the property of lessor made for a
certain time under which the lessee is put in possession of the property. The right of
ownership or title is not passed on the transferee. There is only transfer of right of enjoyment
in lease. In absence of contract or local usage to contrary, lessor and lessee of immoveable
property possess some rights against each other and are subject to some liabilities against
each other.1
Relevant Provisions
Section 105, 107, 108 of the transfer of property act 1882.
Meaning of lease2
A lease is an agreement under which owner gives up possession and use of his property for
valuable consideration and for definite term and at end of term owner has absolute right to
retake, control and use property. (Black’s Law Dictionary).
Definition of lease: section 105 of T.P.A 1882
A lease of immovable property is transfer of right to enjoy such property, made for a certain
time express or implied, or in perpetuity, in consideration for 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.
(i) Definition of Transferor: Section 105
The transferor is called the lessor.
(ii) Transferee: Section 105
The transferee is called lessee.
(iii) Definition of Premium: Section 105

The price is called the premium
(iv) The money, share service or other thing to be so rendered is called the rent.
1
Sec108 of T.P.A 1882.
2
Sec105 of T.PA.1882.
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AIMS AND OBJECTIVES
The researcher intends to :
 discuss on Section 108 of Tansfer of Propety Acts.

 discuss about lease.
 discuss on rights and liabilities of lessee.
RESEARCH METHODOLOGY
This project is based mainly and heavily on written text material. It is based on the doctrinal
method of research. The segments are structured and written actively. The writing style is
descriptive as well as analytical. This project has been done after a thorough research based
upon intrinsic and extrinsic aspect of the assigned topic. The doctrinal method in this research
paper refers to various books, articles, news paper, magazine, Dictionary and political review.
In this research paper, the researcher will only use Doctrinal method.
RESEARCH QUESTIONS
 What is lease ?
 What is the rights of lessee?
 What is the liabilities of lessee?
SOURCES OF DATA
The researcher will be relying on both primary and secondary sources to complete the
project.
1. Primary Sources : Books.
2. Secondary Sources :Material available on the internet.
LIMITATIONS OF THE PROJECT

The researcher has territorial and monetary limitants in completing the project at hand
morever, taking the time into consideration, the researcher has to rely upon the doctrinal
method of research.
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2. CONCEPT OF LEASE
Transfer of Property Act, 1882

In India the party who takes the property for his use and occupation for prescribed time
executes a lease deed. Property can be defined as something tangible or intangible to which
its owner has legal title. Lease therefore can be of a movable or an immovable property.
Lease is specie of transfer of immovable property under the Transfer of Property Act 1882. In
the instant article on Lease, we intend to deal with the immoveable property.
A lease is transfer of an interest in an immovable property which is the subject of the lease
and that interest is the right to occupy and use the property for which the lease is given for
period and on such terms and conditions as agreed between the parties. The transferor of
property is called the lessor and the person to whom it is transferred is referred as a lessee,
and the consideration so rendered is called rent.
The essentials ingredients of a lease agreement are:

1. Parties to the agreement;
2. The identification of the property subject matter of the arrangement;
3. Term of lease,
4. Rent,
5. Date of commencement and expiry.
Procedure of forming a lease agreement:

Lease of immovable property for one year, or term exceeding one year, can only be made by
registered instrument. All other leases may be made by unregistered instruments or oral
agreements.
Where there is no contract or local law governing the execution of a lease deed then lease of
immovable property for agricultural or manufacturing purpose shall be deemed to be on
yearly basis and terminable on the part of either lessor to lessee by giving 6 months notice.
On the other hand a lease of immovable property for any other purpose shall be for monthly
basis, terminable by either lessor or lessee by giving 15 days notice.
In the absence of a lease agreement in writing or the existing agreement is silent on the rights
and liabilities of lessor or lessee then section 108 of the Transfer of Property Act sets down
the guidelines to be followed for a working relationship in a lease arrangement. Once the
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lessor transfers the property leased to the lessee, the lessee in the absence of contract to the
contrary shall possess all the rights and will also be subject to all the liabilities of the lessor as
he is the owner of it. For computing the time for a lease of immovable property, if time is
expressly mentioned then the lease of immovable property will commence from that
particular day and where no time is mentioned the lease begin from the day when it was
entered into.
Where the time is limited and the lease can be terminated before the expiration, but the lease
deed omits to mention at whose option it is terminable. In such a case the lessee will have the
option to determine the lease.
The Right of Possession:

A lease of an immovable property can be determined through 8 modes and it is only by one
of these methods that the lease stands determined and the lessor gets back right of possession
of the property;
By efflux of time limited thereby;

 where the interest of the lessor terminates on happening of an event;
 the interest of the lessor terminates on, or his power to dispose of the same extends to the
happening of any event;
 in case the interest of lessor and lessee becomes vested;
 express surrender before the term is over;
 implied surrender;
 forfeiture;
 When the lessee renounces his character
The prerequisites of the agreement:

Holding over comes into play when even after the determination of lease the lessee remains
in possession of the property and the lessor or his legal representatives accept the rent and
assent to the continuing possession by the lessee. In such a case the lease stands renewed year
after year or month after month according to the purpose for which the property is leased.
Where lease of immovable property has been determined by forfeiture for non-payment of
rent and the lessor files a suit to evict the lessee. If the lessee at the hearing of the suit pays to
the lessor rent in arrear with interest, full cost of suit or provides sufficient security within 15
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days, the court may pass an order to relieve the lessee from forfeiture and allow him to hold
on to the property.
Lease and License:

Lease and license are two different aspects of transferring property and to ascertain whether
the transaction is a lease or license it has to be ascertained whether parties had intended to
create a lease or a license; if the document creates an interest in the property, it can be
referred as lease and if it permits a person to use a property and the legal possession remains
with the owner or the original lessee it is called a license.
The Stamp Duty Act 1899:
The Stamp Duty Act 1899 enumerates the value of stamp duty payable on different lease
documents. A lease agreement can be stamped as an ordinary agreement under article 5 of the
Indian stamp act and corresponding provision of the state stamp duty act. If an agreement of
lease amounts to a demise it is required to be stamped under article 35 of the Indian stamp act
which also includes a sub lease or an agreement to let and sublet. Under article 35, duty
charged is on the average annual rent which is multiplied by the number of years according to
the length of the lease period.
Therefore, while entering into a lease, lessor and lessee have to act according to the
provisions mentioned under Transfer of Property Act, registration, amount payable on
account of stamp duty and other terms and conditions so mentioned in the lease deed.
Section 106 - Duration of certain leases in absence of written contract or local usage3
(1)In the absence of a contract or local law or usage to the contrary, a lease ofimmovable property
for agricultural or manufacturing purposes shall be deemed tobe a lease from year to year,
terminable, on the part of either lessor orlessee, by six months' notice; and a lease of immovable
property for any otherpurpose shall be deemed to be a lease from month to month, terminable, on
thepart 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 receiptof notice.
3
Substitutedby Act3 2003, section 2, for Section "106.
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(3)A notice under sub-section (1) shall not be deemed to be invalid merely becausethe period
mentioned therein falls short of the period specified under thatsub-section, where a suit or
proceeding is filed after the expiry of the periodmentioned in that sub-section.
(4)Every notice under sub-section (1) must be in writing, signed by or on behalf ofthe person
giving it, and either be sent by post to the party who is intended tobe bound by it or be
tendered or delivered personally to such party, or to oneof his family or servants at his
residence, or (if such tender or delivery isnot practicable) affixed to a conspicuous part of the
property.
Section 107 - Leases how made
A lease of immoveable property from year to year, or for any term exceeding one year or
reserving a yearly rent, can be made only by a registered instrument.4
All other leases of immoveable property may be made either by a registered

instrument or by oral agreement accompanied by delivery of possession.5
[Where a lease of immoveable property is made by a registered instrument, such

instrument or, where there are more instruments than one, each such instrument shall
be executed by both the lessor and the lessee:]6
Provided that the State Government may 7 from time to time, by notification in the
Official Gazette, direct that leases of immoveable property, other than leases from
year to year, or for any term exceeding one year, or reserving a yearly rent, or any
class of such leases, may be made by unregistered instrument or by oral agreement
without delivery of possession.]
4
As to limitation to the territorial operation of section 107, see Section 1, supra, section 107 extends to every
cantonment; see section 287 of the Cantonments Act, 1924 (2 of 1924).
5
Substituted by Act 6 of 1904, Section 5, for the original paragraph.
6
Inserted by Act 20 of 1929. Section 55.
7
The words "with the previous sanction of the Governor General in Council" omitted by the A.O. 1937.
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Section 109 - Rights of lessors 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 it 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.
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Section 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 someevent-by the
happening of such event:
(c) where the interest of the lessor in the property terminates on, orhis power to
dispose of the same extends only to, the happening of anyevent-by the happening
of such event:
(d) in case the interests of the lessee and the lessor in the whole ofthe 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 lesseeyields up his interest
under the lease to the lessor, by mutual agreementbetween them:
(f) by implied surrender:
(g) by forfeiture; that is to say, (1) in case the lessee breaks anexpress condition
which provides that, on breach thereof, the lessor mayre-enter 8 or (2) in case the
lessee renounces his character as such by settingup a title in a third person or by
claiming title in himself; 9 [or(3) the lessee is adjudicated an insolvent and the
lease provides that thelessor may re-enter on the happening of such event]; and
in 10 [any ofthese cases] the lessor or his transferee 11 [gives notice in writingto the
lessee of] his intention to determine thelease:
(h) on the expiration of a notice to determine the lease, or to quit, orof intention to
quit, the property leased, duly given by one party to the other.
8
The words"or the lease shall become void " omitted by Act 20 of 1929, Section57.
9
Inserted by Act20 of 1929, Section 57.
10
Substituted byAct 20 of 1929, Section 57, for "either case".
Substituted byAct 20 of 1929, Section 57, for "does some act showing".
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Illustration to clause (f)
A lessee accepts from his lessor a new lease of the property leased, totake effect during the
continuance of the existing lease. This is an impliedsurrender of the former lease, and such
lease determines thereupon.
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 waiv
Section 113 - Waiver 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.
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Section 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 114A12 - 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 surrender and forfeiture under-leases

The surrender, express or implied, of a lease of immoveable property does not prejudice an
underlease 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.
12
Inserted by Act 20 of 1929, Section 58.
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The forfeiture of such a lease annuls all such under-eases, 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.
Section 116 - 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 underrates 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.
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.
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3. RIGHTS AND LIABILITIES OF LESSEE- A CRITICAL STUDY OF

RELEVANT PROVISION
1. ACCESSION (Clause (d))
The word “accession” means “accretion” or addition not with some difference. Literally the
word “accretion” means the process of growing continuously, or continuous coherence, or
any extraneous addition, while the word “accession” means simply an increase. It is not
necessary for accretion to be imperceptible, it is sufficient, if it is gradual.
The conditions necessary for the application of this clause are:
(a) There must be no contract or local usage to the contrary.
(b) An accession must have been made to the demised property.
(c) Such accession must have been made during the continuance of the lease
(d) There must be no law relating to allusion in force to the contrary.
If all the above conditions are fulfilled, then such accession shall be deemed to be comprised
in the lease.13
2. DESTRUCTION, ETC., OF SUBJECT-MATTER (Clause (e))
The clause becomes applicable only if,
(1) There is no contract or local usage to the contrary,
(2) Any material part of the property demised is (a) Wholly destroyed, or (b) rendered
substantially and permanently unfit
for the purposes for which it was let,
(3) By fire, or tempest, or flood, or Violence of any army or of a mob or other irresistible
force, and
(4) The injury is not occasioned by the wrongful act or default of the lessee.
If the above conditions are ful_lled, the lease shall, at the option of the lessee, be void, but if
any of the above ingredients is not present, the lease shall not, at the option of the lessee, be
void, and the lessee shall not be entitled to avail himself of the bene_t of the provision.
(3) NECESSARY REPAIRS (Clause (f))
The essential conditions for the application of this clause are:
(a) There must be no contract to the contrary.
(b) The lessee himself must be under no obligation to make any repairs to the property
13
Sec108 of T.P.A 1882.
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(c) The lessee must have given notice to the lessor to make the repairs within a reasonable
time,
(d) The lessor must have neglected to make the repairs within a reasonable time after notice.
If all the aforesaid conditions are fulfilled, the lessee acquires the following rights:(a) To
make the repairs himself, and
(b) To deduct the expense of such repairs with interest from the rent, or
(c) To recover the expense of such repairs with interest from the lessor.
4. NECESSARY PAYMENTS (Clause (g))
The necessary conditions for the application of this clause are
(1) There must have been no contract to the contrary.
(2) The lessor must have neglected to make any payment, which he was bound to make and
(3) which payment, if not made by him, must be recoverable from (a) the lessee, or (b)
against the property.
If all the above conditions are satisfied, the lessee may make such payment himself, and
deduct it with interest from the rent or otherwise recover it from the lessor. Apart from this
clause, the tenant has also a right to recover the amount under Sec 69 of the Contract Act, if
he pays it under protest. The reason is, that when the lessee makes a payment which the
lessor is bound to make, and which, if not made, is recoverable from the lessee or from the
demised premises, the lessee is a person interested in the payment and is, therefore, entitled to
be reimbursed.
5. REMOVAL OF THINGS ATTACHED TO EARTH (Clause (h))
The clause applies only in the absence of a contract to the contrary It empowers the lessee,
even after the determination of the lease, to remove, at any time, whilst he is in possession of CHANAKYA NATIONA L LAW UNIVERSITY
the property leased, but not afterwards, all things which he has attached to the earth. But he
can do so only, if after so doing, he can leave the property in the state in which he received it.
6. ENTITLEMENT TO CROPS (Clause (i))
If the following conditions are fulfilled, namely
(1) There is no contract or local usage to the contrary
(2) A lease of uncertain duration determines by any means except the fault of the lessee.
Then the lessee or his legal representative is entitled,
(a) To all the crops planted or shown by the lessee and growing upon the property when the
lease determines, and (b) To free ingress and egress to gather and carry them.
7. ABSOLUTE TRANSFER (Clause (J))
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The clause lays down the following propositions, which apply only in the absence of a
contract or local usage to the contrary:
(a) The lessee may transfer absolutely the whole or any part of his interest in the demised
property,
(b) The lessee may transfer by way of mortgage the whole or any part of his interest in the
property,
(c) The lessee may transfer by way of sub-lease the whole or any part of his interest in the
property; and
(d) Any transferee of such interest or part may again transfer it,
(e) The lessee cannot, by reason only of such transfer, cease to be subject to any of the
liabilities attaching to the lease,
But this clause should not be deemed to authorize
(a) A tenant having an untransferable right of occupancy, or
(b) The farmer of an estate in respect of which default has been made in paying revenue, or
(c) The lessee of an estate under the management of a Court of Wards, to assign his interest
as such tenant, farmer or lessee.
8. DISCLOSURE OF FACTS (Clause (K))
The clause may be compared with Cl. (a) of the section and Sec. 55 (5) (a) of this Act. Under
Cl. (a) of this section, the lessor rests under an obligation to disclose all material defects in
the property, with reference to its intended use, of which the lessor is but the lessee is not
aware, and which the latter could not with ordinary care discover. But, by this clause, the
obligation of the lessee is more limited, for he is bound to disclose, to the lessor only facts, as
to the nature or extent of the interest which the lessee is about to take, provided the facts are CHANAKYA NATIONA L LAW UNIVERSITY
such that (a) The lessee is, and (b) The lessor is not, aware of them, and. (c) that materially
increase the value of such interest.
9. PAYMENT OF RENT OR PREMIUM (Clause (L))
The clause provides that, in the absence of a contract or local usage to the contrary, 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 The right to recover rent, or the liability to pay or tender rent, accrues and
subsists only if the relationship of landlord and tenant arises and subsists between the parties.
Where the relationship of landlord and tenant is proved it was held that there is liability to
pay rent If no such relationship exists there is no liability to pay rent; and that liability
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continues only so long as the relationship of landlord and tenant does subsist, or during the
period for which rent is claimed.
10. RESTORATION OF PROPERTY ON TERMINATION (Clause (M))
The clause applies only in the absence of a contract to the contrary. It casts an obligation
upon the lessee
(1) To keep, and
(2) 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 (a) By reasonable
wear and tear, or (b) Irresistible force, and
(3) 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
(4) When such defect has been caused by any act or default on the part of the lessee, his
servants or agents, to make it good within three months after such notice has been given or
left.
11. NOTICE TO LESSOR (Clause (N))
The clause enacts that the lessee, in the absence of a contract to the contrary, rests under an
obligation to give, with reasonable diligence, notice to the lessor, if the lessee becomes
aware,
(a) Of any proceeding to recover the property, or any part thereof, or
(b) Of any encroachment made upon the lessor's right concerning the demised property, or
(c) Any interference with the lessor’s right concerning the demised property.
12. REASONABLE USER OF PROPERTY (Clause (O)) CHANAKYA NATIONA L LAW UNIVERSITY
The clause lays down what the lessee may do and what he may not do.
It enacts that the lessee may use:
(1) The property, and (2) Its products, if any, but only as a person of ordinary prudence would
use them, if they were his own. Yet, it imposes an obligation upon the lessee.
(a) Not to use, or permit another to use, the property for a purpose other than that for which it
was leased, or (b) Fell timber, or (c) Sell timber, or (d) Pull down or damage buildings
belonging to the lessor, or (e) Work mines or quarries not open when the lease was granted,
or (f) Commit any other act which is destructive or permanently injurious thereto.
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The clause enacts, in substance, that the lessee may use the property as a person of ordinary
prudence would use it, if it were his own, but he should not use, or permit another to use it for
a purpose other than that for which it was leased.
13. ERECTION OF PERMANENT STRUCTURES (Clause (p))
The clause imposes an obligation on the lessee, in the absence of a contract or local usage to
the contrary, not to erect on the property any permanent structure, except for agricultural
purposes. The fact that the tenant has improved the land by the permanent structure, or that
the permanent structure will improve the demised premises can afford no defense. But
there are exceptions to the general rule. One such exception is that mentioned in the clause
itself, viz., the tenant may build a house, or other permanent structure, for agricultural
purposes. Another exception may exist Where the lessor by standing by and allowing the
tenant to go on with the work without objection, may disentitle himself to the assistance of
the court.
14. RETURN OF POSSESSION (Clause (q))
Section 108 sets out the rights and liabilities of lessor and lessee. Clause (q) of that section
imposes a liability to put the lessor into possession of the property on the determination of the
lease. Such liability arises whether the lease is terminated by notice or by efflux of time.
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4. CASE LAWS
 Surya Properties Private Ltd. & Ors. v. Bimalendu Nath Sarkar & Ors on 20
March196414 CASE LAWS
A Special Bench of the High Court of Calcutta was examining the meaning of the expression
“permanent structure” appearing in Clause (p) of Section 108 of the Transfer of
Property Act, 1882.15 The Court held that whether a particular structure is a permanent
structure or not is a question that depends on the facts of each case and on the nature and
extent of the particular structure as also the intention and purpose for which the structure was
erected. No hard and fast rule, declared the Court, could be laid down for determining what
would be a permanent structure for the purposes of Section 108 (p) of the Transfer of
Property Act. When the very same case came up for final adjudication on merits before a
Division Bench of the High Court of Calcutta, the High Court in its order dated 20th March,
1964 reported in Suraya Properties Private Ltd. v. Bimalendu Nath Sarkar AIR 1965 Cal 408
held that the expression “permanent structure” did not mean ‘everlasting’. The word
“permanent” had been used to distinguish it from “temporary” and that while a lessee has the
power to raise any type of temporary structure, he has no power to raise a permanent
structure. The Court held that on a true construction ofSection 108 (p) Transfer of
Property Act the words “permanent structure” could only mean a structure that lasts till the
end of the term of the lease and does not mean “everlasting” nor does it mean a structure
which would last 100 years or 50 years. The Court observed:
We may at this stage refer to the decision of this Court in Ranju alias Gautam Ghosh v. CHANAKYA NATIONA L LAW UNIVERSITY
Rekha Ghosh and Ors.
where this Court found that cutting of a collapsible gate by 5/6” and replacing the same
without the consent and permission of the landlord was tantamount to violation
of Section 108 (p) of the Transfer of Property Act read with Section 13 (1)(b) of West
Bengal Premises Tenancy Act, 1956. It is thus immaterial whether the structure has resulted
in creating additional usable space for the tenant who carries out such alteration and
additions. If addition of usable space was ever intended to be an essential requirement
under Section 108 (p) of the Act, the Parliament could have easily provided so. Nothing of
14
Indian kanoon.com
15
Sec108 of T.P.1882
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this sort has been done even in Section 13 (1) (b) of the State Act which clearly shows that
addition of space is not the test for determining whether the structure is permanent or
temporary.
 K K. Krishnan vs M.K. Vijaya Raghavan on 30 July, 198016

that not all the rights conferred on landlord and tenant by s. 108 and other provisions of
the Transfer of Property Act have been left in tact by the various State Rent Actsand that if
a State Rent Act makes provision for eviction on certain specified grounds, eviction cannot
be resisted on the basis of rights conferred by the Transfer of Property Act. Section 108(j) of
the Transfer of Property Act stands displaced by s. 11(4)(i) of the Kerala Buildings (Lease
and Rent Control) Act and is no defence to an action for eviction based on s. 11(4)(i).
 Mahadeo Prosad Shaw vs Calcutta Dyeing And Cleaning Co. on 8 June, 1960
In that view of the matter, it would be for the Court below to consider whether any material
part of the property has been destroyed or rendered substantially and permanently unfit for
the purpose for which it was let out and secondly to consider the option of the lessee. As here
the lessee in both the Courts below as well as in this Court opted to have the lease, the first
question whether it has been rendered substantially or permanently unfit is not a question
which is necessary to be gone into in the present case. The result is that I overrule the
contention of Mr. Sen that the doctrine of frustration as enacted under Section 56 of the
Indian Contract Act would apply and I hold that instead of that, Section 108(e) of
the Transfer of Property Act would govern the field. CHANAKYA NATIONA L LAW UNIVERSITY
But this question does not solve the entire question. First supposing that frustration has not
occurred then, if the lease itself has been determined by the notice to quit as alleged by the
landlord, there is nothing to frustrate nor there is anything to be restituted. The question
whether the lease has been determined or not is a question which is being decided in this suit
itself. In that view of the matter, it is not necessary for me nor proper to express any opinion
on that matter at this stage. But, as it is a lease to which the West Bengal Premises Rent
Control Act applies even if there is a notice to quit valid and legal, the tenant would still,
16
Incian kanoon.com
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nonetheless, be entitled to contitue in possession by virtue of the protection given to the

tenant under the Rent Control Act.
 M/S K.B.Saha And Sons Pvt. Ltd vs M/S Development Consultant Ltd on 12 May,
2008
From the agreement, which could be seen as a collateral evidence, the purpose of the tenancy
was clearly for residence and, therefore, the question of violation of Clause (o)
of Section 108 of the Transfer of Property Act by the respondent in the facts and
circumstances of the case could not arise at all.
On the aforesaid findings arrived at by the Trial Court, both the suits were dismissed and the
High Court on the same lines had affirmed the findings of the trial court and held that no
ground was made out by the appellant to evict the respondent from the suit premises.
Mr. Somnath Mukherjee, the learned counsel appearing on behalf of the appellant submitted
that the lease agreement (Ext.4) creating tenancy from month to month in respect of the suit
premises was not compulsorily registerable under Section 107 of the Transfer of
Property Act. He also contended that the High Court as well as the trial court were wrong in
holding that the lease agreement being an unregistered document cannot be used to establish
the provisions made in that agreement that the suit premises was let out to the respondent
only for the purpose of occupation of the respondent's named officer Mr. Keshab Das and
members of his family and for no other purpose. He further contended that since the lease CHANAKYA NATIONA L LAW UNIVERSITY
agreement in question was not required to be registered, the prohibition contained

in Section 49 of the Registration Act was not applicable. He also contended in the alternative
that even if it was held that the lease agreement in question was compulsorily registrable,
even then the purpose of letting specified in the lease agreement was a `collateral purpose'
and accordingly, the lease agreement could be looked into under the proviso to Section 49 of
the Registration Act and also that the said term did not extinguish the tenant's right under
the Act. Lastly, he contended that the respondent had violated section 108(o) of
the Transfer of Property Act and, accordingly, was liable to be evicted
under Section 13(1b) of the Act. Mr. Mukherjee contended that the lease agreement between
the parties was not illegal and against the statute. In support of this contention, Mr.Mukherjee
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relied on a decision of this Court in the case of Smt. Juthika Mulick & Anr. vs. Dr.Mahendra
Yashwant Bal & Ors. [AIR 1995 SC 1142] and he strongly relied on paragraph 42 of the said
decision which says:
Before we part with this Judgment, let us deal with another ground, which the High Court had
also taken into consideration. This is with regard to the violation of provisions
of Section 108 (o) of theTransfer of Property Act. Section 108 (o) clearly provides that the
Lessee must not use or permit another to use the property for a purpose other than that for
which it was let out or leased. Relying on this provision, the learned counsel for the appellant
argued that since the purpose of the lease was for the use and occupation of one of the
officers of the respondent, after the said officer had vacated the suit premises, the respondent,
by refusing to handover the possession of the suit premises to the appellant and by giving the
same to another officer, had violated the provisions of Section 108 (o) of the Transfer of
Property Act. Before we decide this question, it is necessary for us to reproduce the finding
of the High Court on this aspect,
 Kasturchand Panachand Doshi And ... vs Yeshwant Vinayak Sainkar And Anr. on
25 March, 1980
In the said suit the second and the third petitioners were added as defendants Nos. 2 and
3 on the ground that the first petitioner had illegally sublet the suit premises in their
favour. Though in the trial Court several grounds were urged in support of the prayer for
eviction and the trial Court itself accepted some of them for passing the decree for
eviction, ultimately the ground which remains for consideration by me is the ground
which is mentioned in Section 13(1)(a) of the Bombay Rents, Hotel and Lodging House
Rates Control Act, hereinafter referred to as "the Bombay Rent Act", read
with Section 108(o) of the Transfer of Property Act. It means that the petitioner has used
the suit premises for a purpose other than the one for which it was leased. From the
discussion in the judgment of the appeal Court below I also notice that the decree is
further based upon a finding that the petitioner has not used the suit premises without
reasonable cause for the purpose for which they were let out for a continuous period of 6
months immediately preceding the date of the suit. These two grounds, namely using the
suit premises for a purpose for which they were not let out as mentioned in
Seciton 108 (o) of the Transfer of Property Act, and not using the suit premises for a
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period of 6 months or more immediately preceding the date of the suit for the purpose for
which they were let out and that too without a reasonable cause are apparently
overlapping and Shri Shah has justifiably advanced some arguments upon the same.
The learned trial Judge by his judgment and order dated 9th of June 1978 decreed the suit for
possession. He also passed certain consequential orders. This decree of the trial Court was
challenged by all the three petitioners in Civil Appeal No. 298 of 1978 which was heard and
dismissed by the learned Extra Joint Judge of Pune by his judgment and order dated 15th of
July 1978. I would mention here again that the learned Extra Joint Judge upheld the decree
for eviction on the ground mentioned in Section 13(1)(a) of the Bombay Rent Act read
with Section 108(o) of the Transfer of Property Act as well as the ground mentioned
in Section 13(1)(k) of the Bombay Rent Act. It is this decree which is the subject matter of
the challenge in this petition.
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5. CONCLUSION
Every lease agreement has two parties: lessor and lessee. The Transfer of Property Act
confers certain rights and liabilities to lessors and lessees. The lessor and the lessee of an
immovable property possess these rights and are subject to some liabilities. However, this is
effective only in the absence of a contract. Further, these rights and liabilities may also be
affected by local usage to the contrary. In case of lessors A lessor is bound to disclose to a
lessee any material defect in the property with reference to its intended use. This is so in
cases where the lessor is aware of the defects but the lessee is not, and could not discover
them either. Also, where the lessor is bound by the lessee''s request to put him in possession
of the property, he will be deemed to be liable to ensure that if the lessee 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 any interruption. In case of lessees The
Act confers some rights and liabilities on lessees. These include: If during the continuance of
the lease any accession is made to the property, the accession will be deemed to be comprised
in the lease If any material part of the property is wholly destroyed or rendered substantially
and permanently unfit for the purposes for which it was let, the lease will, at the option of the
lessee, be void. This may be caused by fire, flood etc. Rights and liabilities of lessor and
17
lessee 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 the repairs with interest from the rent, or otherwise recover it from the lessor.
If the lessor neglects to make any payment which he is bound to make, the lessee may make
the payment himself, and deduct it with interest from the rent, or otherwise recover it from
the lessor. The lessee may, even after the determination of the lease, remove at any time
while he is in possession of the property leased, all things which he has attached, provided he
leaves the property in the state in which he received it. 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. In such cases, the lessee will not cease
to be subject to any of the liabilities attached to the lease. 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 aware of and which materially increases the value of such interest. The
17
Times of India https://timesofindia.indiatimes.com/bangalore/Rights-and-liabilities-of-
lessor-and-lessee/articleshowprint
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lessee is bound to pay or tender, at the proper time and place, the premium or rent to the
lessor or his agent. The lessee is bound to keep, and on the termination of the lease restore,
the property in as good a 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. Further, a
lessee is bound to allow the lessor and his agents, at all reasonable times during the term, to
enter into the property and inspect the condition. When a 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 a notice has been given. If the lessee becomes aware of any proceedings to
recover the property, any encroachment made, or any interference with the lessor''s rights
concerning the property, he is bound to give notice of it to the lessor. A lessee should use the
property as a person of ordinary prudence would use it, as if it was his own. However, he
must not use, 18 or permit another to use the property for a purpose other than that for which it
was leased. He must not, without the lessor''s consent, build on the property any permanent
structure. On the determination of the lease, the lessee is bound to put the lessor into
possession of the property 108. 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 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: CHANAKYA NATIONA L LAW UNIVERSITY
(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
18
9/5/2018 Rights and liabilities of lessor and lessee - Times of India
https://timesofindia.indiatimes.com/bangalore/Rights-and-liabilities-of-lessor-and-
lessee/articleshowprint/.
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(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, orotherwise recover it from the lessor:
(g) if the lessor neglects to make any payment which he is bound to make, and which, if not
make 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 even after the determination of the lease remove, at any time 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 CHANAKYA NATIONA L LAW UNIVERSITY
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 un-transferable 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:
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(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 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.
BIBLIOGRAPHY
1.Books
2. Websites
 Manupatra.com
 Advocate khoj
 Indian kanoon.com
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1 Rights and Liabilities of Lessee

NYAYA NAGAR MITHAPUR,PATNA-800001

RIGHTS AND LIABILITIES OF LESSEE

ROUGH DRAFT SUBMITTED IN THE PARTIAL FULFILMENT OF THE COURSE TITLED-

Dr. B.R.N. Sharma

Faculty of Property Law

Roll no. : - 1775

CHANAKYA NATIONA L LAW UNIVERSITY

Roll no:- 1775

3. Rights And Liabilities of Lessee- A Critical Study of Relevant Provision.pg.16

CHANAKYA NATIONA L LAW UNIVERSITY

(iii) Definition of Premium: Section 105

AIMS AND OBJECTIVES

The researcher intends to :

 discuss on Section 108 of Tansfer of Propety Acts.

1. Primary Sources : Books.

2. Secondary Sources :Material available on the internet.

LIMITATIONS OF THE PROJECT

Transfer of Property Act, 1882

The essentials ingredients of a lease agreement are:

Procedure of forming a lease agreement:

The Right of Possession:

By efflux of time limited thereby;

The prerequisites of the agreement:

Lease and License:

The Stamp Duty Act 1899:

Section 107 - Leases how made

All other leases of immoveable property may be made either by a registered

[Where a lease of immoveable property is made by a registered instrument, such

without delivery of possession.]

Section 109 - Rights of lessors transferee

Section 110 - Exclusion of day on which term commences

Where the time limited by a lease of immoveable property is expressed as

Option to determine lease.Where the time so limited is expressed to be terminable

Section 111 - Determination of lease

A lease of immoveable property determines-

(a) by efflux of the time limited thereby:

(f) by implied surrender:

lessee of] his intention to determine thelease:

Illustration to clause (f)

Section 112 - Waiver of forfeiture

Section 113 - Waiver notice to quit

expiration of the notice. The notice is waived.

Section 114 - Relief against forfeiture for non-payment of rent

Section 114A12 - Relief against forfeiture in certain other cases

Where a lease of immoveable property has determined by forfeiture for a breach of an

(a) specifying the particular breach complained of; and

Section 115 - Effect surrender and forfeiture under-leases

Section 116 - Effect of holding over

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

Section 117 - Exemption of leases for agricultural purposes

3. RIGHTS AND LIABILITIES OF LESSEE- A CRITICAL STUDY OF

CHANAKYA NATIONA L LAW UNIVERSITY

 K K. Krishnan vs M.K. Vijaya Raghavan on 30 July, 198016

nonetheless, be entitled to contitue in possession by virtue of the protection given to the

agreement in question was not required to be registered, the prohibition contained

CHANAKYA NATIONA L LAW UNIVERSITY

CHANAKYA NATIONA L LAW UNIVERSITY

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