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Determination of Lease in Transfer of Property Act

Determination of Lease in Property law
Determination of Lease in Property law


Section 111 of the Transfer of Property Act provides the methods by which a lease can be brought to an end. Given that a lease merely confers the right of enjoyment upon the lessee, it follows that upon termination of the lease, the lessee is obligated to surrender possession of the property to the lessor.

By Efflux of Time

Under Section 111(a), lease termination can occur through the Efflux of Time. If the lease term is predetermined, it concludes automatically upon the expiration of the stipulated period. Upon reaching the last day of the lease term, the lessor gains the right to reclaim possession of the leased property. In cases of leases with fixed durations, no formal notice to quit is required.

Furthermore, if a lessee passes away before the lease term concludes, their lease rights are inherited by their heirs. The Efflux of Time provision applies when the lease duration is established by a valid lease agreement. However, it's important to note that an unregistered lease deed cannot be terminated through the Efflux of Time.

When a tenancy ends due to the passage of time, no formal notice to quit is needed. Moreover, if the agreement specifies the tenancy period, there is no requirement for notice prior to filing a suit for eviction.

By Happening of Some Event

Section 111(b) outlines the termination of a lease through the Happening of Some Event. If a lease of immovable property is contingent upon the occurrence of a specific event, the lease concludes upon the actual occurrence of that event. In cases where the lease includes a condition stipulating its termination upon the occurrence of a particular event, it indeed terminates once that event transpires. Until such event materializes, the lessee retains the right to possess the leased property.

Upon the termination of the lease, the lessor holds the option to either re-enter the property or pursue legal action for ejectment.

By Termination of Lessor's Interest in Property

In accordance with Section 111(c), a lease of immovable property ends when the lessor's interest in the property expires or their authority to transfer it ceases, conditioned upon the occurrence of a specific event. Once this event unfolds, the lease is terminated.

When a lessor possesses only a restricted interest or authority to bestow a lease, the lease concludes upon the forfeiture of that interest. For instance, if a Hindu widow, entitled solely to a life-estate, grants a lease, the lease terminates upon her demise.

By Merger

Section 111(d) outlines the termination of a lease through the concept of merger. According to this provision, a lease of immovable property ends when the interests of both the lessee and the lessor in the entirety of the property converge in a single individual under the same legal entitlement. For merger to occur, it is essential that two concurrent estates merge into the hands of one individual simultaneously and encompass the entire property.

The possibility of merger is precluded if there exists an intermediate estate held by another party at the pertinent time. Merger transpires when the tenant attains absolute ownership of the leased premises themselves.

By Express Surrender 

As outlined in Section 111 (e), a lease of immovable property can be terminated by way of express surrender. This occurs when the lessee relinquishes their interest under the lease to the lessor through a clear agreement between them.

Express surrender involves the lessee giving up their lease term, coupled with the delivery of possession. Delivery of possession holds significance, unless there exists an agreement to surrender at a later time. Essentially, surrender serves as the counterpart to merger. While in merger, the tenant gains the reversion, in surrender, the landlord acquires the lease. Surrender results in the extinction of the lease, thereby terminating the lease relationship.

In cases of express surrender, no specific formalities are necessary; the lessee simply needs to express their intention to surrender. The lessor must agree to the surrender, and there must be actual delivery of possession. Surrender doesn't mandate a written agreement; it can be effectuated orally through the delivery of possession or inferred from the parties' actions. A registered deed is not compulsory to validate surrender. However, if surrendering a part of the premises alters the terms of the lease deed, a registered document is required to evidence the modification.

By Implied Surrender

As per clause (f), a lease can come to an end through an implied surrender. Implied surrender occurs when there is either the establishment of a new relationship between the lessor and lessee or the lessee surrenders possession, which is then assumed by the lessor.

The underlying principle of implied surrender rests on the notion that when two parties previously had a particular relationship concerning a subject matter, and a new relationship arises regarding the same subject matter, the two sets of relationships cannot coexist as they are incompatible and inconsistent with each other. Consequently, the former relationship is considered terminated to facilitate the operation of the latter.

By Forfeiture 

According to Clause (g), a lease can be terminated through forfeiture under the following circumstances:

(a) When the lessee breaches an express condition stipulating that upon such breach, the lessor has the right to re-enter the property.

(b) If the lessee disavows their role as lessee by asserting a title in a third party or claiming title for themselves.

(c) When the lessee is declared insolvent, and the lease agreement permits the lessor to re-enter the property upon such occurrence.

In any of these scenarios, the lessor or their assignee must provide written notice to the lessee of their intention to terminate the lease.

On Expiration of Notice to Quit 

Section 111 (h) stipulates that the lease of immovable property can end upon the expiration of a notice to terminate the lease, quit the premises, or express an intention to vacate the leased property, duly served by one party to the other.

A lease ceases when the notice to quit or determine concludes. As per Section 106, periodic leases such as monthly or yearly leases are terminated through a notice to quit. However, leases for fixed terms do not require such notice.

For instance, in a case involving a one-year lease with a provision in the rental agreement stating that the lessee would vacate the shop when required by the landlord for her own use, it was deemed that the notice under Section 111(h) was valid. Consequently, the lessee became eligible for an eviction decree without needing to demonstrate personal use of the shop.

Moreover, if the lessee remains in possession even after receiving the notice, they cannot establish ownership through adverse possession, even over an extended period. In such instances, a lawsuit for eviction can be pursued.

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