SECTION 107- LEASE HOW MADE

SECTION 108- RIGHTS AND LIABILITIES OF LESSOR

AND LESSEE
SECTION 111- DETERMINATION OF LEASE

PRESENTED BY:
SAKSHI ANAND- 1650261
AISHWARYA BALAKRISHNAN- 1650238
 SECTION 107: Leases how made
Mode of creation of lease

Section 107 provides for 2 modes of creation of leases:

Lease which can be made by Lease in which registration is

registered deed: optional:
1. leases from year to year •Lease from month to month
2. Term exceeding one year •For a term of one year
3. Lease reserving a yearly •For a term less than a year
rent
4. Permanent lease
3. leases
Leases from year to year: continuous lease

Term exceeding one year: Rajendra pratap singh v. Rameshwar

Prasad: SC held in this case that a lease for a term exceeding one
year it must be through a registered instrument. Joint execution of
both the parties is sufficient for the validity of the instrument.

Lease reserving a yearly rent: where the rent is reserved for the
whole year, there is a presumption that the lease is registered.

Permanent lease: It is a compulsorily registerable. When no term is

fixed in the lease or instrument of lease contains a provision for
certain rights by legal heirs of lesser and lessee after their death,
there is a presumption of permanent lease.
Difference between extension of lease and its renewal:
In the case of extension of lease, the extension of the term agreed upon
shall be according to clause for extension and therefore no need to
execute a fresh deed of lease. However in the case of renewal, a fresh
deed will have to be executed between the parties.

Effect of non registration: where the compulsorily registerable lease

is not registered , the lease is considered to be invalid. When a lease
contains a covenant for renewal it does not ipso facto extend the tenure
of the lease. Even it for the renewed lease registration is compulsory.
Renewed lease must be registered otherwise it will not be a valid lease.
Even the renewal of lease exceeding the term of one year requires
registration.
Section 108: Rights and liabilities of lessor and lessee
This section is subject to a contrary- contract and no local custom
governs the rights and liabilities of the parties.
No specific rights of the lessor are given but the liabilities of the
lessee given in the section are considered as identical rights of the
lessor.

 Liabilities of lessor:
1. Duty of disclosure
2. Duty to give possession
3. Covenant for quiet enjoyment
 
1. Duty of disclosure – section 108(a)
The lessor is bound to disclose to the lessee any material defect in the property with the
reference to its intended use of which the lessor is aware but the lessee is not aware and
which the lessee could not discover with ordinary care.
Defects are of 2 types: which are apparent and those which are not apparently visible i.e.
latent defects. The lessor is bound to disclose only the latent defects because these cannot be
discovered with ordinary care. The duty of disclosure is important where the defects affect
the right of enjoyment or use of the property.
 
2. Duty to give possession – section 108(b)
Lessor is bound on the lessee’s request to put him in the possession of the property. It
imposes a statutory obligation on the lessor to put the lessee into the possession of the
property leased.
When the lessor fails to give the possession then the lessee can sue the lessor for obtaining
possession and in case if he has paid rent then he can also sue for recovering back the
amount paid as rent.
 
3. Covenant for quiet enjoyment – section 108(c)
It is the duty of the lessor that the lessee ought not to be interfered with during the period of
lease either by him or by anyone else provided that the lessee pays the rent reserved under
the lease and performs the contract binding on the lessee.
Rights of lessee:
1. Right to enjoy the accretions
2. Right to avoid the lease in case of any destruction by fire, tempest etc.
3. Right to repair the property when lessor neglects to make and to deduct the expenses
from rent.
4. Right to make payments that are obligatory on the lessor and to deduct the amount from
rent
5. Right to remove fixtures made by him during tenancy
6. Right to have the benefit of crops growing on the land planted by him
7. Right to assign his interest in the leased property
 
 
8. Right to enjoy the accretions: section 108(d)
Accretions are additions made to the leased property.
This clause provides that if during the continuance of the lease any accession is made to the
property, such accession shall be deemed to be comprised in the lease. Such accession will
be subject to the law of allusion.

2. Right to avoid lease: section 108 (e)

This clause gives the right to avoid the lease to the lessee when the subject matter
the lease is destroyed by fire, flood , tempest , violence of mob or army. Destruction
may be of whole of the property or part of it. Destruction must be substantial and of
permanent character and not caused by the wrongful act of the lessee himself.
3. Right to repair property- section1 108(f)
 Where the lessor agrees to make repairs to the property then he becomes bound with it
and he should do that within a reasonable time after the notice by the lessee, if the lessor
fails to do the repairs then the lessee can do repairs himself and recover the amount from
the lessor or deduct it from the amount of rent but he is not entitled to avoid the lease on
this ground.
 
Mirza afzal beg. V. Prabhu dayal AIR 1973 All 26
Held: Duty of tenant- establish evidence- landlord was bound to carry out repairs

4. Right to make payments: section 108(g)

Where the lessee makes the payment which the lessor was bound to make like taxes,
revenues etc. is recoverable from the lessor or he can deduct it from the rent with interest.
Baker v. Greenhill:
Held: the payment must not be voluntarily and it must be compulsory and the lessee had
made the payment under the protest.

5. Right to remove fixtures – section 108(h)

The lessee can remove anything whic he has attached to the property till the time he is in
the possession of it but not afterwards, provided that he leaves the property in the same
state as it was before when he received it.
This clause is the exception to the general rule that things attached to the earth
becomes part of it.
 
Amendment 1929- lessee entitled to remove trees or fixtures set by him on lease – provided
it doesn’t cause any damage to the property.
 
Case law: Bharat bhushan deva v. State of Bihar :
Where the lessee demolished the construction on the leasehold premises without consent of
the landlord, it was held that his existence on the premises was reduced from the status of
the lessee to that of the rank of trespasser and the legal relationship between the landlord
and tenant had come to an end. The tenant was liable to reconstruct the premises and also to
pay compensation.
 
6. Right to have benefit of crops :section 108(i)
Where a lease of an uncertain duration is determined not due to the default of the lessee, the
latter is entitled to all the benefits of the crops growing, planted or sown by him. Lessee or
his legal representatives has been given the right of free ingress and egress to visit the leased
property to gather and carry the grown crops.
 
7. Right to assign his interest: section108(j)
The lessee has the right to transfer whole of his interest or any part of it.
Interest can be transferred by way of mortgage or sub-lease. His transferee can also transfer
his interest further.

Swansea corporation v. Thomas

On the termination of the lease, the obligation of handing over the possession of the property
is of the lessee and not of the sub-lessee because only the original lessee is privy to the
contract.

 Liabilities of the lessee: clause [(k) to (q)]

1. Duty to disclose facts materially increasing the value of the property
2. Duty to pay rent
3. Duty to maintain the property
4. Duty to give notice of any encroachment
5. Duty to use the property in reasonable way
6. Duty not to erect permanent structure without lessor’s consent
7. Duty to Re-transfer property
 
1. Duty to disclose facts materially increasing the value of the property: section 108(k)
The lessee is under the duty to disclose any known fact which increases the value of the
property where the lessor is unaware of such fact.
Eg: when lessee comes to know the existence of a gold mine then he should disclose such
fact to the lessor.
 
2. Duty to pay rent: section 108(l)
The lessee is liable to pay the rent or premium at the proper time and place to the lessor.
Proper time comes only after the lessee takes possession of the property and not from the
date of signing of the deed.
Where the lessee fails to pay the rent then lessor can sue him for damages along with
interest or he may start ejectment proceedings on the ground of non payment of rent after
giving proper notice

3. Duty to maintain the property: section 108(m)

The lessee has a duty to maintain and restore the property in the condition in which it was
let to him. Only the changes caused by the reasonable wear and tear or irresistible force are
allowed under the duty of this clause.
Also, he is bound to allow- lessor and his agents to inspect the property at all reasonable
time during the lease and give notice to the lessee if any defect is found.
If the defect is caused due to default on lessee’s part then he is bound to make it good within
3 months of the notice.
4. Duty to give notice of any encroachment :section 108(n)
Where the lessee comes to know of any encroachment on the property in his possession or
any interference with the lessor’s right then he has to inform the lessor about this fact so
that he may timely take an action to protect his intrest.
 
5. Duty to use the property in reasonable way: section 108(o)
The lessee may use the property as a person of ordinary prudence would use them if they
were his own. He is under duty that he must not use or allow others to use the property for
a purpose other than that for which it was leased.
 
Dashrath baburao sangale v. Kashinath Bhaskar Datta
Where the premises were let out to the tenant for sugarcane juice business but he was using
the premises for selling readymade clothes, it was held to be violative of this provision.
 
6. Duty not to erect permanent structure without lessor’s consent : section 108(p)
The lessee is not bound to erect any permanent structure on the land without the lessor’s
consent except for the agricultural purposes.
If the lessee does so, the he shall remove them without causing damage to the property.
If the permanent structure on the leased property are not removed after the expiry of the
lease then those shall belong to the lessor.
 
 
 
7. Duty to Re-transfer property: section 108(q)
After the expiry of the lease, the lessee is bound to give possession of the property back to
the lessor, if he continues to keep possession after the expiry of the term then it becomes
unauthorised possession.
P.S. Bedi Project v. Equipment corp. Of India Ltd.
Where the tenant doesn’t vacayte the premises after the expiry of the term then he becomes
liable for the damages as well as for any profits if accrued to the lessor.
 

SECTION 111 : DETERMINATION OF LEASE(subsections a-h)

 A lease of immovable property determines-
(a)