KSLU Corner™ New AIBE previous QP

Lease of immovable property

Property Law · Unit IV · Topic 15 of 21 · 8 min read

The definition of lease in section 105, duration and notice under section 106 as amended in 2002, the rights and liabilities of lessor and lessee under section 108, how a lease ends, holding over, and the line between lease and licence.

On this page
  1. 1. Definition: section 105
  2. 2. Duration and notice: section 106 (as amended in 2002)
  3. 3. How a lease is made: section 107
  4. 4. Rights and liabilities: section 108
  5. 5. Determination: section 111
  6. 6. Holding over: section 116
  7. 7. Lease and licence
  8. 8. Problem
  9. How this is examined
Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

The January 2026 question. “Explain the rights and liabilities of the lessee” (10 marks). Section 108 lists them in clauses (a) to (q): (a) to (c) are the lessor's duties, (d) to (j) the lessee's rights, (k) to (q) the lessee's liabilities. Remember the letters as three blocks.

1. Definition: section 105

A lease of immovable property is a transfer of a right to enjoy 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, 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 those terms. The transferor is the lessor, the transferee the lessee, the price the premium and the periodical payment the rent.

2. Duration and notice: section 106 (as amended in 2002)

In the absence of a contract or local law or usage to the contrary:

The Transfer of Property (Amendment) Act, 2002 removed the old technicality that the notice had to expire with the end of a month or year of the tenancy. Now the period runs from the date the notice is received; a notice is not invalid merely because the period stated falls short of the required period, if a suit or proceeding is filed after the required period expires. Every notice must be in writing, signed by or on behalf of the person giving it, and either sent by post or delivered personally to the other party or a member of his family or servant at his residence, or, if that is not practicable, affixed to a conspicuous part of the property.

3. How a lease is made: section 107

An unregistered deed for a term above one year does not create the lease it describes, but if the tenant has been let into possession and pays rent, a tenancy from month to month (or year to year) arises by implication under s.106.

4. Rights and liabilities: section 108

Liabilities of the lessor.

Rights of the lessee.

Liabilities of the lessee.

5. Determination: section 111

For forfeiture for non-payment of rent, the court may grant relief against forfeiture if the lessee pays the arrears, interest and costs (s.114); for other breaches s.114A requires a notice specifying the breach before a suit.

6. Holding over: section 116

If a lessee or under-lessee remains in possession after the lease has determined, and the lessor or his legal representative accepts rent from him or otherwise assents to his continuing in possession, the lease is, in the absence of agreement to the contrary, renewed from year to year or month to month according to the purpose, as in s.106. Mere continuance without assent makes him a tenant at sufferance. Acceptance of rent after a suit for eviction is filed is not by itself assent.

7. Lease and licence

A licence (s.52, Indian Easements Act, 1882) is a permission to do something on another's land which would otherwise be unlawful; it creates no interest in the property. A lease transfers an interest. In Associated Hotels of India Ltd. v. R.N. Kapoor, 1959 INSC 89, AIR 1959 SC 1262, the respondent occupied two rooms in the Imperial Hotel, Delhi, under a document described as a licence. The Court held it was a lease, and stated the tests:

Differences: a licence is personal and not transferable, a lease is transferable; a licence is generally revocable, a lease is not before its term; a licensee cannot sue in his own name for trespass, a lessee can.

8. Problem

L lets a shop to T for a stationery business by an oral agreement, with possession. Two years later T starts selling firecrackers from it and builds a permanent mezzanine without asking L. L wants to evict T.

Issue. Nature of the tenancy, T's breaches, and how L can end the lease.

Law. Sections 106, 107, 108(o) and (p), 111(g) and (h).

Application. An oral lease with possession is valid only for a term not exceeding one year; continuing occupation on monthly rent makes this a month-to-month tenancy under s.106. Using a stationery shop to store explosives is use for a different purpose and not as a prudent owner would (s.108(o)); the mezzanine breaches s.108(p). There is no written re-entry clause, so forfeiture under s.111(g) is not available for these breaches.

Conclusion. L should serve a written fifteen days' notice to quit under s.106 and sue for possession after it expires, claiming damages for the breaches. Local rent control law, where it applies, may add its own grounds and procedure.

How this is examined

Ten marks: s.108 rights and liabilities of the lessee (or lessor), introduced by the s.105 definition. Short notes: holding over; determination of lease; lease and licence with Associated Hotels; notice under s.106 after the 2002 amendment.

Now try the real questions: Property Law past question papers.