Section 105 of the Transfer of Property Act, 1882 dene denes s a lease as follows: “A leas lease e of immo immove veab able le prop proper erty ty is a tran transf sfer er of a righ rightt to enjo enjoy y such 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, serv servic ice e or any othe otherr thin thing g of valu value, e, to be render endered ed peri period odic ical ally ly or on speci specied ed occasi occasions ons to the transf transfer eror or by the transf transfer eree, ee, who accept accepts s the transfer on such terms.”
As per ection !"# $ransfer %f &roperty Act, a lease of immovable property is a transfer of a right to enjoy such property made for a certain time or in perpetuity. $he expression “transfer of a right to enjoy” stands in contrast with with the the wor words “tra “trans nsfe ferr of owne owners rshi hip” p” occu occurrring ring in ect ectio ion n #' in the the denition of sale. (n a sale all the rights of ownership , which the transferor has, passes on the transferee. (n a lease transaction , the transferor is called the lessor, the transferee is called the lessee, the price paid or promised is called the premium and the money , share , service or other thing to be so rendered is called the rent . )ssentials ingredients of a lease agreement are
a) Parti Parties es to Leas Lease e $here must be two parties in a lease i.e. lesser *$ransferor+ *$ransferor+ and the lessee *transferee+. A lease arises in agreement between the owner of a property and the person who proposes to tae that property for a term on payment of consideration. A man could not grant a lease to himself
b) Subject Subject matter matter of lease $here may be composite leases also lie lease of a building along with e-uipment and lease of a factory along with machinery etc. A lease of a house or of a shop is a lease not only of the superstructure but also of its site!. ease premises is not only a building or part of building but also the land and other things appertaining to it and also furniture and other xtures provided by the landlord.
1 T. Lakshmipathi v. P. Nithyananda Reddy, 2003 (3) RCR (Civil) 306 SC
c) Transfer of rigt (n lease there is a transfer of right of enjoyment of property. /ight of enjoyment is transferred only when there is transfer of possession. (n mortgage and lease only partial interest is transferred, therefore it is transfer of a limited estate. $his limited estate i.e., right of enjoyment is nown as “demise”. lease hold estate is transferred after being separated from ownership. $his is right in rem.
!) "uration of lease $he essential of a lease is that the right to enjoy the property must be transferred for a certain time, express or implied or in perpetuity. $he document of lease must show the time period of operation of lease and when it is going to commence. $he commencement of the lease must be certain in the rst instance or capable of being made certain afterwards. (t may commence either in the present or in the future or on the happening of a certain contingency which is bound to happen. $hree types of lease are recogni0ed by this section:1 *i+
ease for a certain time2
*ii+
&eriodic leases2 and
*iii+
eases in perpetuity
e#) $onsi!eration A lease is a transaction which has always to be supported by consideration. 3onsideration may be either premium or rent. 4here the whole amount payable as consideration is paid in lump sum it is called premium the consideration which is paid periodically is called rent.
"uration of leases *ection !"5+ 6owever such leases are subject to contrary contract or local law or usage. 7nder section !"5 , lease of immovable property for agricultural or manufacturing purposes where there is no contract to t e contrary, shall be deemed to be a lease from year to year and lease of immovable property for any other purpose shall be deemed to be a lease month to month. 4here the
lease has other purpose shall be deemed to be lease month to month. 4here the lease has come to an end by e8ux of time, no notice is re-uired under section !"59. the duration of lease will be as under:1 *!+
a monthly lease or tenency can be determined by the lessoror lessee by *a+a notice in writing, *b+notice must be of !# days, *c+ the !# days, notice must expire with the end of a month of tenancy, and *d+the notice must be served in the manner provided in this section.
*9+A lease from year to year can be determined by the lessor or lessee by: *a+a notice in writing, *b+the notice should be of six months, *c+ the notice must expire with the end of a year of the tenancy, and *d+ the notice must be served in the manner provided in the section itself.
%orm an! construction of notice )very notice under this section must be in writing and signed by or on behalf of the person giving it. $he notice must be either1 *a+sent by post to the party who is intened to be bound by it, or *b+tendered or delivered personally to such party, or to one of his family or servats at his residence, oraxed to a conspicuous part of the property where such tender or delivery is not practica
&o!e of creation of lease 'Section 10() 2 Naayan Reddy v. !alas"e #$ni%ipal C"$n%il, &'R 2001 i 1
According to section !";*!+ a lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent can be made only be a registered instrument.
Lease from year to year uch a lease is a continuous lease. 6ere the lessee cannot terminate the lease without giving a notice at the end of the year.
Leases for a term ecee!ing one year 4here the term of lease exceeds one year it must be registered. $he upreme court held in Rajendra Pratap Singh v. Rameshwar Prasad 3, that a lease for a term exceeding one year must be through a registered instrument.
Lease reser*ing yearly rent 4here the rent is reserved for the whole year, there is a presumption that it a year to year and it is register able.
3 &'R 1 SC 3*
