Lease Deed
Lease Deed (Section 105, TPA)
Meaning:
A Lease is a transfer of a right to enjoy immovable property, for a certain time or in perpetuity, in consideration of:
a price (premium), or
rent, or both,
paid or promised by the transferee (lessee) to the transferor (lessor).
π The document that creates this transaction is called a Lease Deed.
Essentials of a Lease (Sec. 105 TPA):
Parties:
Lessor: The person who transfers the property.
Lessee: The person to whom the property is transferred.
Subject Matter:
Must be immovable property.
Right Transferred:
Only the right to enjoy the property is transferred, not ownership.
Consideration:
Rent, premium, or both.
Duration:
Lease may be for a fixed term, periodic term, or in perpetuity.
Delivery of Possession:
Lessee gets possession and the right to use property subject to terms of lease deed.
Types of Leases (under TPA & general law):
Lease for a fixed term β Ends automatically on expiry (e.g., 11 months lease).
Periodic lease β Renewed automatically (monthly, yearly, etc.) until terminated.
Lease at will β Can be terminated at any time by either party.
Perpetual lease β Runs forever unless law restricts.
Rights & Duties:
Rights of Lessee (Sec. 108):
Right to enjoy property.
Right to repairs and reimbursement.
Right to remove fixtures (if contract permits).
Duties of Lessee:
To pay rent.
To maintain property.
To not sub-let unless agreed.
Case Laws on Lease Deed:
Associated Hotels of India v. R.N. Kapoor (1959 SC):
Distinction between lease and license:
Lease gives an interest in property.
License is mere permission to use property.
B. M. Lall v. Dunlop Rubber Co. (AIR 1968):
A lease deed must clearly state intention, rent, and duration; otherwise, courts will interpret based on conduct of parties.
Pradeep Oil Corporation v. Municipal Corporation of Delhi (2011 SC):
Held that even perpetual leases are leases under Section 105, not transfers of ownership.
Delta International Ltd. v. Shyam Sundar Ganeriwalla (1999 SC):
Reaffirmed that exclusive possession indicates lease, but intention of parties is decisive.
Distinction: Lease vs. License (Exam Point):
| Aspect | Lease | License |
|---|---|---|
| Transfer | Transfers right to enjoy property (interest in land). | Only permits doing something on property (no interest). |
| Possession | Exclusive possession is given. | No exclusive possession, only permission. |
| Statute | Covered by Sec. 105, TPA. | Covered under Indian Easements Act, 1882. |
| Case Law | Associated Hotels case β Lease vs license test. | Same case clarified the distinction. |
Registration Requirement:
Under the Registration Act, 1908, a lease deed:
For more than 1 year β Compulsorily registered.
For 11 months or less β Can be by oral agreement with delivery of possession.
βοΈ Case Law: Anthony v. KC Ittoop (2000 SC) β An unregistered lease deed for more than one year cannot be relied upon to prove a lease; at best, it creates a month-to-month tenancy.
β Conclusion (Exam-Ready):
A Lease Deed is a written instrument creating the relationship of lessor and lessee under Section 105, TPA. It transfers only the right to enjoy immovable property, not ownership, for a period in return for rent or premium. Courts have emphasized the intention of parties and exclusive possession as decisive tests (Associated Hotels case). A properly drafted and registered lease deed protects both parties and avoids disputes.
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