From the aforesaid, it is clear that a lease deed provides increased security with regards to the possession over the Property and therefore, is more reliable as compared to a Leave and License Agreement. Naturally, the Lease Deed being more authentic of a Tenancy Agreement, it would be pertinent to restrict our discussion only to the parties to a Lease Deed, i.e. the Lessee and the Lessor.
Accordingly, Section 108 of the Transfer of Property Act, 1882 vests several responsibilities with the aforesaid, also mentioning the duties of the Parties towards each other, during the course of the lease deed.
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Rights of the Lessor:
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Recover rent from the Lessee in accordance with the Lease Deed.
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In case of any breach of any of the conditions of the Lease Deed, the Lessor may take the property from the possession of the Lessee.
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Lessor entitled to take the property back from the Lessee on the termination of agreement.
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Lessor entitled to recover the amount of damage caused to the property so leased out from the Lessee.
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Seek compensation from the Lessee on not vacating the property after the termination of the Lease Deed.
Duties of Lessor:
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Lessor is bound to disclose all the material defect relating to the property which is a lease with the former intended use, of which the former is and later is not aware.
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Lessor is bound to request the lessee, to put him in a possession of property.
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Lessor can make a contract with the lessee that, if he pays the rent later on which is reserved by the lease and performs all the terms and conditions mentioned under the contract which binds the lessee, and then the lessee may hold the property during the specified time without the interruption.
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The lessor or any of his agent to enter the Leased Premises after giving a prior intimation to the Lessee regarding their arrival. ‘
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Refund any advance payment made by the Tenant if he had made such payment before the Order for vacating the said premises is passed.
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Seek permission of the Lessee before building any structures or carrying out any improvements in the Leased Premises.
Rights of Lessee:
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Fundamental rights are during the continuing period of the lease if any accession is made (alluvion for the time being in force) then that accession or area will be taken under such lease.
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During the continuing period of lease, if the material part of the property is destroyed wholly or partly through by fire, or by flood, or by war or by the violent act of the mob or by any other means and it becomes permanently unfit for the use for which it is to be rendered, then it becomes void at the option of the lessee.
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During the continuing period of lease, if the lessor avoids to make any repairs to the property which he is obliged to do on a reasonable time even after notice, and if such repairs are done by the lessee himself, then he has a right to deduct such expenses from the rent or can recover from the lessor.
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If the lessor avoids making any such payment which a lessor is bound to make and if such payment is recoverable from the lessee or recovered against the property, then the lessee has a right to recover it from the lessor or can deduct it from the interest of the rent.
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Lessee has a right to remove all such things which he has attached himself to the earth provided that lessee has to leave the property in such a state in which he has received it.
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When a lease is of such duration which is not specified by any means, except the fault of the lessee, he or his legal representative have had a right to collect all the crops which are planted, sown or growing by the lessee at the leased property and they are free to ingress and egress from such property.
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Lessee has a right to transfer the property absolutely or any part of his interest by the way of sub-lease or through the mortgage. But, by such reason, a lessee cannot by any means ceases himself from the liabilities which are attached to the leased property.
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Liabilities of the Lessee towards the property:
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Lessee is under obligation to disclose all the material facts which are likely to increase the interest or the value which the lessee and the lessor are not aware of.
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Lessee is under obligation to pay the premium or the rent to the lessor or his agent on a reasonable time.
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Lessee is under obligation to keep the property in a proper condition and on the termination of the lease restore all such good in such a way as it was at the time when he was in possession.
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If the lessee is aware of any proceedings against the property or any encroachment or any interference is done, then lessee is under obligation to give notice to the lessor.
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Lessee has a right to use the assets or goods which are placed in the property as an ordinary prudence men and use it like it his own but, he is under obligation that he should not use or allow any other person to use the property in any other way or purpose other than the purpose for the property is leased.
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The lessee cannot, without the consent of the lessor taken out any structure permanently of or on the property except in the case of agriculture purpose.
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On the termination of the lease, the lessee is bound to give the possession back to the lessor.
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Lessee shall not sublet sub-let the said premises without the prior consent of the landlord.
Adding to the aforesaid clauses of both the Responsibilities of the Landlord and the Tenant, the Supreme Court of India in the light of the rent control Laws of Rajasthan, averred that no tenant can be evicted on the grounds of defaulting rent without the determination of the “provisional rent” by the Court.
Thus, the Laws may appear to be slightly inclined towards the Lessor and the same is understood, since the Supreme Court of India has, on several instances, declared “Right to Shelter” a fundamental right within the meaning of Article 21 of the Constitution of India. However, the Model Tenancy Act, 2015 clarifies upon the aforesaid responsibilities and duties, thereby encouraging people to lease their properties to the needy.
Thus, Section 108 of the Transfer of Property Act, 1882 is the foundation of the Lessor – Lessee Relationship and certain elements of the Model Tenancy Act, 2015 seek to consolidate them further. The aforesaid, if abided religiously by the parties to the Lease Deed shall ensure not just a healthy relationship between the Parties but also fulfill the purpose of the Transfer of Property Act, 1882 in ensuring home for the deserving.
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Conclusion:
Amongst all the other duties and liabilities, the Landlord, as discussed above as well, is often advised to get his Lease Deed registered – this is so because currently, registration of all legal documents at the concerned authority is in vogue – the same asserts the legal authenticity of that particular document and prevents either Party bounded by the said Document to escape its liabilities. Majorly, the wording of Anthony v. KC Ittoop and Sons describe the consequences of Non-Registration of a Lease Deed:
“Nonregistration of the document had caused only two consequences. One is that no lease exceeding one year was created. Second is that the instrument became useless so far as the creation of the lease is concerned.”
However, the Supreme Court in the said case upheld the validity of an unregistered sale deed after stating that:
“A transfer of right in the building for enjoyment, of which the consideration of payment of monthly rent has been fixed, can reasonably be presumed.”
Nevertheless, an interpretation of the verdict rendered by the Madras High Court, in Atluru Saraswatamma v. Atluru Paddayya and Ors, in the light of Section 17(1)(d) and Section 49 of the Registrations Act, 1908 concludes that no unregistered sale deed which required a subsequent Registration shall create a leasehold in favor of the lessee. Moreover, on a thorough read of Section 106 and Section 107 of the Transfer of Property Act, 1882, it is clear that an unregistered lease deed will not create a valid lease. However, the Supreme Court has held that:
“..in the absence of registration of a document, what is deemed to be created is a month to month tenancy, the termination of which is governed by Section 106 of the Act.”
Thus, it is clear that the Indian Judiciary has found a way for upholding the Lease Deed, thereby complicating the understanding of the consequences of the Non-registration of Lease Deed herein. Nevertheless, the question as to “Whether a lease deed, where the term of lease stated therein does not exceed one year, requires to be registered under the provisions of the Registration Act, 1908?” and the validity of the non-registration of a Lease Deed can be best summarized hereunder after reading through the columns of Abdul Rasheed S/O Meeran Sab vs Srinivas S/O Kashinathrao:
“….all leases not covered by the first part of S.107 of the T.P. Act may be made either by an oral agreement accompanied by delivery of possession, or by a registered instrument. A lease, the registration whereof is not compulsory under S.17(1)(d) of the Registration Act, becomes compulsorily registrable, if reduced into writing in view of the second part of S.107 of the T.P. Act read with para 2 of S.4 thereof. A written unregistered lease of immovable property, even though the term of the lease stated therein does not exceed one year, is inadmissible in evidence in view of S.49 of the Registration Act, 1908 read with the second part of S.107 of the Transfer of Property Act, 1882 & second para of S.4 thereof. A lease for a period of one year falls within the expression 'All other leases' stated in para 2 of S.107 of the T.P. Act and may be made by an oral agreement accompanied by delivery of possession.”
