DR.

RAM MANOHAR LOHIYA

NATIONAL LAW UNIVERSITY, LUCKNOW

ACADEMIC SESSION: 2020-21

PROJECT

RIGHTS AND LIABILITIES OF LESSOR AND LESSEE

Submitted To: Submitted By:

Mrs. Ankita Yadav Varad Arun Yadav
Associate Professor (Law) 6th Semester
Dr. Ram Manohar Lohiya National B.A. L.L.B. (Hons.)
Law University, Lucknow Roll No: 170
Section: B
ACKNOWLEDGEMENT
I would like to express my gratitude towards all those whose help and constant
support the project would not have reached its current facet. Foremost, I would
like to thank Mrs. Ankita Yadav for her kind guidance and for quenching my
queries on many doubts and technicalities which I came up during the making
of this project. I would take advantage of this situation to thank the Hon’ble
Vice Chancellor, Prof. Subir K. Bhatnagar, esteemed Dean (Academics) Prof.
Dr. C.M. Jariwala and Dr. Ram Manohar Lohiya National University for
providing me with such an enriching opportunity to work and research on this
topic.

This project would not have seen the light of the day without the constant
direction and guidance of my parents and guardians to whom I owe a lot. I
would also like to use this opportunity to thank my brother in helping me out
with the nitty-gritty of formatting.

I would also like to thank all of my friends and seniors who aided me along the
way. I must also extend my gratitude to the library and library personnel who
provided me with research material and good books to work upon and the
distinguished authors, jurists and journals for providing in the public domain
such invaluable information.
 TABLE OF CONTENTS

Introduction...........................................................................................................4

Section 108, Transfer Of Property Act, 1882.......................................................5

Rights And Liabilities Of Lessor..........................................................................6

Liabilities Of Lessor.............................................................................................6

Rights And Liabilities Of Lessee........................................................................11

Rights Of Lessee.................................................................................................11

Liabilities Of Lessee...........................................................................................15

Conclusion..........................................................................................................19

Bibliography.......................................................................................................20
 INTRODUCTION
Section 105 of the Transfer of Property Act, 1882 deals with lease. The
meaning of lease is derived from this section for the application of the Transfer
of Property Act, 1882.

Section 105, Transfer of Property Act, 1882 reads as,

105. Lease defined.

A lease of immoveable 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 such terms.

Lessor, lessee, premium and rent defined.—The transferor is called the

lessor, the transferee is called the lessee, the price is called the premium, and
the money, share, service or other thing to be so rendered is called the rent.

A lease of immovable property is a transfer of a right to enjoy such property

made for a certain time (expressed or implied), or in perpetuity, in consideration
of a:

 Price paid or promised, or

 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 such terms.1

1
Dr Avatar Singh, Textbook on Transfer of Property Act, 1882, 5th edition 2016, pg. 314
Lease is a partial transfer of certain rights in the property. It’s a transfer of ‘right
of enjoyment’ of an immovable property made for a certain period, in
consideration of a price paid, or money, share of crops, service or any other
thing of value to be given periodically or on specified occasions to the
transferor by the transferee.

In a lease transaction, the transferor is called the lessor, the transferee is called
the lessee, the price paid or promise to be paid is called the premium and the
money, share, service or other thing to be so rendered is called the rent.

Essential Elements Of Section 105, Transfer Of Property Act, 1882

The essential elements of a transaction of lease are:

 The parties to lease- lessor and lessee

 The subject matter of lease- immovable property
 There must be transfer of a right
 Duration of lease
 Consideration of lease- premium
 Acceptance of transfer by the lessee
 Lease must be made in the mode under section 107 of the Transfer of
Property Act, 1882.

The Supreme Court stated these essentials as follows:

“Essential ingredients of a lease are-

 There should be a transfer of right to enjoy an immovable property;

 Such transfer may be for a certain term or in perpetuity
 The transfer should be in consideration of a premium or rent;
 The transfer should be a bilateral transaction, the transferee accepting
the terms of transfer.”2
2
B. Arvind Kumar v Government of India, (2007) 5 SCC 745.
 SECTION 108, TRANSFER OF PROPERTY ACT, 1882
Section 108 of the Transfer of Property Act, 1882 provides for rights and
liabilities of both the lessor and the lessee. These rights and liabilities are
subject to a contrary-contract, i.e., where the lessor and the lessee make an
agreement to be governed by their terms and conditions during the subsistence
of lease, their respective rights and liabilities are determined by their own
agreement. Section 108 does not apply in such a case.

Similarly, where there is any local custom or usage governing their rights and
liabilities, that usage or custom will govern their relationship during the
subsistence of lease and Section 108 will not apply there.

Section 108 expressly permits contracts contrary to its provisions. It imposes no

restriction on the right of parties to enter into a contract and stipulate terms,
conditions and restrictions of their own choice.3

The first three clauses (a), (b) and (c) of Section 108 provide for the liabilities of
the lessor. In this section, no specific rights of the lessor are given but the
liabilities of the lessee given in the section are considered as identical rights of
the lessor.

RIGHTS AND LIABILITIES OF LESSOR

Clauses (a), (b) and (c) of Section 108 of the Transfer of Property Act, 1882
define the rights and liabilities of lessor.
3
M. Arul Jothi v Lajja Bal, (2000) 3 SCC 723.
Liabilities Of Lessor
The liabilities of the lessor are:

 Duty of disclosure [Clause (a)]

 Duty to give possession [Clause (b)]
 Covenant for quiet enjoyment [Clause (c)]

1. Duty Of Disclosure [Clause (A)]

Section 108 (a), Transfer of Property Act, 1882 reads as,

(a) The lessor is bound to disclose to the lessee any material defect in the
property, with reference to its intended use, of which the former is and
the latter is not aware, and which the latter could not with ordinary
care discover;

Clause (a) provides that the lessor is bound to disclose to the lessee any material
defect in the property with reference to its intended use of which the lessor is
aware but the lessee could not discover with ordinary care.

Defects are of two types- those which are apparent and those which are not
apparently visible, i.e., latent defects. The lessor is bound to disclose latent
defects only because such defects cannot be discovered with ordinary care. The
duty of disclosure is especially important where the defects affect the right of
enjoyment or use of the property. Therefore, the lessor is bound to disclose
latent defects which are going to affect the use of property by the lessee.

In the absence of a contract or local usage to the contrary, the lessor of

immovable property, as against the lessee with respect to the property leased is
bound to disclose to the lessee any material defect in the property, 4 with
reference to its intended use, of which the former is and the latter is not aware,
and which the latter could not with ordinary care discover.5 In construing a lease
4
Provesh Chandra Dalui v Biswanath Banerjee, AIR 1989 SC 1834.
5
Lakhmichund v RatnaIbai, AIR 1927 Bom 115.
deed the court must look at the words used in the contract, unless they are such
that one may suspect that they do not convey the intention correctly. If the
words are clear, there is very little the court can do about it.

The duty to disclose is with respect to defects which are latent, but which the
lessor is aware. In Low and Co. v. Jyothi Prasad,6 the appellants entered into a
contract of lease for working underground coal rights, but refused to take the
lease, because, they discovered that an ancestor of the respondent had made
Brahmottar grants of the property and the respondent was unable to produce
copies of those grants to show that the Brahmottar grants did not include
minerals. The appellants sued the respondent for recovery of the premium
forfeited. It was held:

“The real question at issue, therefore, is whether the appellant company has
shown that the respondent’s title to grant a lease of the mineral rights in the two
villages is not free from reasonable doubt, or may be fairly described as
imperfect. It is obvious that the question is one degree. The doubt suggested
must be a reasonable doubt; the imperfection must be material...The result is
that appellant company is unable to do more than conjecture that the grant made
by the respondent’s predecessors may have comprised the underground rights.
On the other hand, there is no evidence that the grantees have ever asserted any
rights to the minerals under the villages or that they have ever been worked by
them or their predecessor....a long series of recent decisions by the Board has
established that if a claimant to subsoil rights holds under Zamindar or by a
grant emanating from him, even though his powers may be permanent, heritable
and transferable he must still prove the express inclusion of subsoil rights.The
rights and liabilities of lessor and lessee are defined in Section 108, Transfer of
Property Act, 1882. These contrast markedly with the rights and liabilities of
buyer and seller as defined under Section 55 of Transfer of Property Act, 1882,

6
Low and Co. v. Jyothi Prasad, (1931) LR 58 IA 392.
particularly in the matter of requirements as to title which the seller must
satisfy. The appellant company has not shown that the respondent has failed, or
is not in a position, to perform any of the duties incumbent on a lessor, under
Section 108.”

From the words ‘with reference to its intended use’ it follows that there is an
implied covenant by the lessor that the property is suitable for the particular
purpose. The sub- section applies only to physical defects and as quotation from
the judgment above shows, not to defects in title. The judgment in fact refers to
Section 18 and 25 of the Specific Relief Act, 1877, corresponding to Sections
13 and 17 of the 1963 Act and the discussion shows that in a lease it is merely
the right to possess and enjoy the property that is given, and as that is provided
for in sub-sections (b) and (c), the lessee is not allowed to insist that the lessor
has a valid title.

This section contains no provision as to title but only for quiet enjoyment of
property. Therefore, the lessor has no duty to disclose defect in title.

2. Duty To Give Possession [Clause (B)]

Section 108 (b), Transfer of Property Act, 1882 reads as,

b) the lessor is bound on the lessee’s request to put him in possession of the
property;

Clause (b) says that the lessee is bound on the lessee’s request to put in
possession of the property. This clause imposes a statutory obligation on the
lessor to put the lessee into possession of the property leased. However, this
duty of lessor to deliver possession arises only when there is a request by the
lessee in the respect.

When a lessor fails to put the lessee in possession, the lessee may sue him for
obtaining possession. In case the lessee has already paid the rent, he may sue for
damages as well as for recovering back the amount paid as rent. Where the
lessee gets possession of only a part of the lease property he may repudiate the
lease. But where he wants to retain that part he must pay rent for that occupied
part. If the leased property is in the possession of a third person, the lessee may
also sue him along with the lessor.

When the tenant vacated the premises but did not give possession to landlord till
the security amount was refunded to him, it was held that the tenant was liable
to pay the rent for the period he retained the possession whether he used the
premises or not. He has an independent remedy to recover the security.7

The lessor of immovable property, as against the lessee with respect to the
property leased is bound on the lessee’s request to put him in possession of the
property of the agreed portion failing which, a cause of action arises in favour
of the tenant from the date of the lease. He may refuse to pay him rent 8 or can
file a lawsuit9 against the lessor and against the lessor and against any third
person who may be in possession or sue the lessor for damages.10 An express
covenant excluding the implied covenant for quiet enjoyment will not relieve
the lessor of his duty to give possession. 11 A lessee in possession of only a
12
portion of the property leased is entitled to a reduction or abatement of rent.
The burden of proof that possession has been given is on the lessor, 13 but shifts
on the lessee, if the lessee has paid the rent, but has not been given the
possession.14 If the tenant of a shop hands over the possession of the shop to the
landlord under an order of the rent controller for demolition, renovation and
reconstruction on an undertaking by the landlord that the tenant might re-enter

7
Uberoisons (Machines) Ltd. v. SamtelColor Ltd., 2003 (2) RCR (Rent) 376.
8
Udhab Chandra v Narain, AIR 1920 Pat 611.
9
Zamindar of Vizianagram v Behara Suryanarayana, (1902) ILR 25 Mad 587.
10
Razia Begum v Shaikh Muhammad, AIR 1926 Pat 508.
11
AhamadarRahaman v Jaminiranjan, AIR 1930 Caal 385.
12
SN Bibra v Stephen Court, AIR 1966 SC 1361.
13
Jogesh Chandra v EmdadMeah, AIR 1932 PC 28.
14
Durga Prasad Singh v Rajendra Narayan Singh, (1913) 41 Cal 493.
in it after reconstruction, the tenant has an implied covenant for peaceful
possession and enjoyment of the leased property.15

3. Covenant Against Interruption Of Enjoyment Of Lease

Section 108 (c), Transfer of Property Act, 1882 reads as,

(c) the lessor shall be deemed to contract with the lessee that, if the latter pays
the rent reserved by the lease and performs the contracts binding on the
lessee, he may hold the property during the time limited by the lease without
interruption. The benefit of such contract shall be annexed to and go with the
lessee’s interest as such, and may be enforced by every person in whom that
interest is for the whole or any part thereof from time to time vested.

Clause (c) provides that the lessor shall be deemed to contract with the lessee
that, if the lessee pays the rent reserved under the lease and performs the
contracts binding on the lessee, he may hold the property during the time
limited by the lease without interruption. It is the duty of the lessor to ensure
that the lessee ought not to be interfered with during the period of lease either
by him or anyone else.

The covenant for quiet enjoyment under this clause is regarded as a covenant
running with the land so as to be enforceable by any assignee of the lessee
against the lessor and his assignee.

Where the quiet enjoyment of the lease has been interrupted, he is entitled to
recover damages equivalent to the present value of the prospective profit of
which he is deprived.16

The lessor shall be deemed to contract with the lessee that, if latter pays the rent
reserved by the lease and performs the contracts binding on the lessee, he may
hold the property during the time limited by the lease without interruption. The

15
Raichurmatham Prabhakar v RawatmalDugar, (2004) 4 SCC 766.
16
Nagardas v Ahmed Khan, ILR 21 Bom 175.
covenant is unqualified and protects the lessee against interruption by the lessor,
his heirs and assignees or other lessees of the lessor, or by any other person or
persons, whomsoever. It is also the duty of a tenant under a perpetual tenure to
protect himself against illegal encroachments by others. 17 A lessor cannot
substantially derogate from the grant. Interference with the lessee collecting
rents from his sub-lessee is a breach. A sub-lessor is entitled to recover damages
from the lessee, if the head lessor puts an end to the lease during the term of the
sub-lease.18

The payment of rent and the performance by the lessee of the contracts binding
on him are not conditions precedent to the covenant for quiet enjoyment, unless
it is a lease for a further term dependent on the lessee paying rent and
performing the covenants of the lease.

The benefit of such contract shall be annexed to, and go with, the lessee’s
interest as such, and may be enforced by every person in whom that interest is
for the whole or any part thereof from time to time vested. It is not open to a
license of the lessee, during the subsistence of the license or in the suit for
recovery of possession of the property instituted after the revocation of the
license, to set up title to the property on the ground that he had purchased the
property from the owner and so, refuse to deliver possession.19

RIGHTS AND LIABILITIES OF LESSEE

Clauses (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p) and (q) of Section
108 of the Transfer of Property Act, 1882 define the rights and liabilities of
lessee. Out of these clauses, clause (d) to (j) discusses about the rights of the
lessee whereas the clause (k) to (q) define the liabilities of the lessee.

17
Katyayani Debi v Udoy Kumar Das, AIR 1925 PC 97.
18
Gujadhar v Rambhau, AIR 1938 Nag 439.
19
Sant Lal Jain v Avtar Singh, AIR 1985 SC 857.
Rights Of Lessee
Clauses (d) to (j) discusses about the rights of the lessee which are as follows:

 Right to enjoy the accretions.

 Right to avoid the lease in case of any destruction by fire, tempest etc.
 Right to repair the property when lessor neglects to make and to
deduct the expenses of repair from rent.
 Right to make payments that are obligatory on the lessor and to deduct
the amount from the rent.
 Right to remove fixtures made by him during the tenancy.
 Right to have the benefit of the crops growing on the land planted by
him.
 Right to assign his interest in the leased property.

1. Right To Enjoy The Accretions

Section 108 (d), Transfer of Property Act, 1882 reads as,

(d) If during the continuance of the lease any accession is made to the
property, such accession (subject to the law relating to alluvion for the time
being in force) shall be deemed to be comprised in the lease;

Clause (d) provides that if during the continuance of the lease any accession is
made to the property, such accession shall be deemed to be comprised in the
lease. However, such accession will be subject to the law relating to alluvion for
the time being in force.

Accessions are accretions and additions made to the leased property. They may
be natural accretions or made by the lessee, for example, additions made by
flood or alluvial activity. The lessee is entitled to such accretions during the
continuance of the lease but not afterwards. However, he cannot acquire title to
such accessions adversely to his lessor or landlord. On the termination of the
lease, the lessee is bound to surrender the accession in the same way as he
surrender the leased property. Where a lessee acquires land of another person by
encroachment for the benefit of the lessor, he is bound to surrender the land
acquired by him by adverse possession to the lessor after the expiry of the
lease.20

2. Right To Avoid The Lease In Case Of Any Destruction By Fire, Tempest

Etc.

Where the property is rendered substantially and permanently unfit for use due
to fire, flood, violence, mob or other uncontrollable reasons, the lessee has a
right to get the lease terminated before expiry to the term. The very object of
lease is to confer the right of use and enjoyment of an immovable property to
the lessee. Therefore, if it becomes impossible due to injury caused to the
property which makes it unfit for its use, the lessee must be given the right to
avoid the lease.

Whether the destruction is permanent or substantial so as to make it unfit for use

by the tenant or not, is a matter of fact. The main point is that tenanted property
cannot be used for the purpose for which the lease was made. Where the
property destroyed by earthquake or cyclone could be made fit for use by
repairs, the lessee has no right to avoid the lease. Lessee cannot avoid the lease
also where the property is destroyed by his own wrongful or negligent act.

When the parties have agreed that tenant shall continue to pay the rent even in
contingencies given in this clause, the tenant cannot avoid the lease. Where a
site was part of the building leased out and the property was destroyed, the
Kerala High Court21 held that relationship of landlord and tenant nevertheless
existed and the lease was not avoidable under Section 108(e) of this act.

20
Muthurakoo v Oxr, 1911 (21) Mad LJ 615.
21
V. Kalpakkam Amma v. MuthurumaIyerMuthukrishna, AIR 1995 Ker, 99
However, the court observed that is such a situation; the tenant would not be
entitled to build structure without the consent of the landlord.

3. Right To Repair The Property When Lessor Neglects To Make And To

Deduct The Expenses Of Repair From Rent.

It provides that if the lessor neglects to make any repairs which he is bound to
make to the property after notice within a reasonable time, the lessee may make
the repairs himself and deduct the expense of such repairs with interest from the
rent or otherwise recover it from the lessor.

The lessor is not bound to make repairs to the leased property. But where he
agrees at the same time of the lease with the lessee that he will make the
necessary repairs then he becomes bound to make the repairs. If within the
reasonable time after notice by the lessee, the lessor does not undertake repairs
the lessee may himself do the repairs and recover the amount from the lessor or
deduct it from the rent but he is not entitled to avoid the lease on this ground. It
is the duty of the tenant to establish by evidence that the landlord was bound to
carry out repairs under an agreement, custom or usage otherwise his claim will
not be sustainable because this section does by itself make a landlord liable to
carry out repairs.22

4. Right To Make Payments That Are Obligatory On The Lessor And To

Deduct The Amount From The Rent

It provides that if the lessor neglects to make any payment which he is bound to
make and which, if not made by him, is recoverable from the lessee or against
the property, the lessee may make such payment himself and deduct it with
interest from the rent or otherwise recover it from the lessor.

Where the lessee makes the payment which the lessor was bound to make like
taxes, revenue etc. and which if not paid were recoverable from the lessee or the
22
Mirza Afzal Beg v Prabhu Dayal, AIR 1973 All 26.
land, the lessee may make the necessary payment and recover the amount paid
by him from the lessor or deduct it from the rent with interest. The payment
must not be voluntary and it must be compulsory and the lessee must have made
the payment under protest.23 If there is no evidence that he paid under protest,
he cannot maintain an action for recovery.24

5. Right To Remove Fixtures Made By Him During Tenancy

It provides that the lessee may even after the determination of the lease remove,
at any time whilst he is in possession of the property leased but not afterwards,
all things which he has attached to the earth provided he leaves the property in
the state which he received it.

This clause enables the lessee to remove anything which he attached to the
property. The clause provides an exception to the general rule that the things
attached to the earth become part of it. After the amendment of 1929, the lessee
has become authorized to remove trees or fixtures set up by him on the lease so
long as he is possession of the property even though the tenancy has come to an
end. However, while removing such fixtures he must see that the property is left
in the same condition in which he had received it. 25 Where a shop was let in
1968 and the tenant converted the hall into two rooms by raising partition wall
and fixing a door without the consent of the landlord, the suit for eviction was
filed in 1981, it was held that the mere inaction on the part of the lessor had not
entitled the lessee to the resist the suit on the ground of estoppels.26

6. Right To Have The Benefit Of Crops Growing On The Land Sown Or

Planted By Him

It provides that when a lease of uncertain duration becomes determined by

means except the fault of the lessee, he or his legal representative is entitled to
23
Baker v Greenhill, 3 QB 145.
24
Landlord and Tenant, Wood, sixth Edn, p. 595
25
Vasudevan v Vallia, 24 Mad 47 (FB)
26
Shiv Ram v. Sham Lal, 2003 (2) RCR (Rent) 285 (P&H)
all the crops planted or sown by the lessee and growing upon the property when
the lease determines and to free ingress and egress to gather and carry them.

This right is exercisable where the leases are of uncertain duration, e.g., eases
from year to year. In other class of leases, the parties themselves may stipulate
in respect of removal of crops.

7. Right To Assign His Interest In The Leased Property, I.E., Right To Sub-
Let The Property

It provides that the lessee may transfer absolutely, or by way of mortgage or by

sub-lease the whole or any part of his interest in the property and any transferee
of such interest or part may again transfer it. The lessee shall not, by reason
only of such transfer, cease to be subject of any of the liabilities attaching to the
lease.

This clause, in absence of a contract to the contrary, empowers the lessee to

transfer whole of his interest. The interest may be transferred absolutely or by
way of mortgage or sub-lease. His transferee or his assignee has also been
empowered to transfer his interest again.

On the termination of the lease, the obligation of handing over the possession of
the property is of the lessee and not of the sub-lessee because only the original
lessee is privy to the contract.27

Where in the lease in question though the expression “parting with possession”
is preceded by the expression of “sale, transfer or assigning”, it is not mere
parting with possession, but “otherwise parting with possession”. Thus the
clause envisages not only parting with possession in the context of sale, transfer
or assigning but also parting with possession in other contexts, which would
include the cases of sub-letting.28

27
Swansea Corporation v. Thomas, (1882) 10 QBD 48
28
Rajandheer (India) Pvt. Ltd. v. DDA, AIR 2004 Del 208
A tenant having an untransferable right of occupancy, the farmer of an estate in
respect of which default has been made in paying revenue, or the lessee of a
state under the management of a court of wards is not entitled to assign his
interest as such tenant, farmer or lessee.

The lessee or licensee cannot claim to have acquired customary right to get
lease or license. In Ramchandra Wahiwatdar v. Narayan29 , fishing rights in
tank were granted to fisherman on lease or license, their right being permissive;
they could not claim customary rights to get lease/ license.

Liabilities Of Lessee
According to section 108, the lessee is under the following liabilities:

 Duty to disclose facts materially increasing the value of the property

 Duty to pay rent or consideration of lease.
 Duty to maintain property.
 Duty to give notice of any encroachment on the property to the lessor.
 Duty to use the property in a proper manner.
 Duty not to erect permanent structure on the property.
 Duty to re-transfer the possession on determination of lease.

1. Duty To Disclose Facts Materially Increasing The Value Of The

Property

Clause (k) provides that the lessee is bound to disclose to the lessor any fact as
to the nature or extent of the interest which the lessee is about to take, of which
the lessee is not aware and which materially increases the value of such interest.

As the lessor is made liable to disclose any material defect (latent) in the leased
property to the lessee, the lessee is correspondingly to put under a duty to
disclose to the lessor any fact known to him which increases the value of the

29
Ramchandra Wahiwatdar v. Narayan AIR 2003 SC 3286
leased property. It is necessary that the lessor must be unaware of that fact. For
example, when a lessee comes to know of the existence of a gold mine in the
leased property he must tell the lessee about the gold mine. Omission or failure
of the lessee to inform the lessor about such facts is not a fraudulent act and
lessor cannot terminate lease due to this omission. However, the lessor can sue
lessee for damages.

2. Duty To Pay Rent Or Consideration Of Lease.

Clause (l) provides that the lessee is bound to pay or tender at the proper time
and place, the premium or rent to the lessor or his agent in this behalf. 30 The
obligation to pay rent ends as soon as the lessor has fulfilled his obligation and
the lessee has been put in his possession. 31 Payment can be made by the lessee;
but it cannot be made by a stranger unless he acts as an agent of the lessee. It is
not necessary that the lessor should make a demand for the rent. 32 The lessee
must seek out to the landlord to make the payment.

Rent or consideration by the lessee is to be paid to the lessor. Payment made

one of several joint lessors is a payment to all, 33 but payment to one co-sharer
landlord is not a discharge against all and in case of non-payment they may sue
together, or any one of them may sue alone for the whole rent. One co-sharer
cannot sue separately for his share of the rent, unless there is an agreement that
the lessee shall pay each share separately.34 The mere fact that they have been
recovering rent separately in the past does not prevent them from suing jointly.
A tender at the landlord’s or his agent’s usual place of business is valid and
sanctioned for custom.35

3. Duty To Maintain Property

30
Venkatacharuyulu v Venhatasubba, AIR 1926 Mad 55.
31
Nur Muhammad v Ahmad Alikhan, AIR 1936 Lah 815.
32
Nasiruddin v Umerji Adam, AIR 1941 Bom 286.
33
Krishnarao v Manaji, (1874) 11 Bom HC 106.
34
Pramada Nath Roy v Ramani Kama Roy, (1907) 35 Cal 331.
35
Fakir Lal Goswami v Bonnerji, (1899) 4 Cal WN 324.
Clause (m) provides that the lessee is bound to keep and on the termination of
lease to restore the property in as good condition as it was when he was put into
possession. He is bound to allow the lessor and his agents at all the reasonable
time during the continuance of the lease to enter upon the property and inspect
its condition and give notice of any defect in it. Where such defect has been
caused by any act or default on the part of the lessor or his servants or agents, he
is bound to make it good within three months of such notice.

The obligation to restore the property does not apply when the property is
destroyed by a fire not caused by the negligence of the lessee, but he is liable
for fire lighted intentionally or caused by negligence. 36 Where a part of the
leased building collapses due to a natural calamity, the landlords cannot put an
end to the tenancy or restrain the tenant from effecting repairs. 37 The obligation
is not affected if material damage is effected y the sub-tenant or by the mode in
which the tenancy is terminated.38

4. Duty To Give Notice Of Any Encroachment On The Property To The

Lessor

According to clause (n), if the lessee becomes aware of any proceedings to

recover the property or any part thereof, or of any encroachment made upon, or
any interference with diligence, notice thereof to the lessor. It is incumbent on
every lessee to protect his lessor’s property from encroachment or unlawful
eviction. The landlord holds possession through his tenant, and if the tenant is
dispossessed, the landlord may sue for recovery of the land demised under the
Specific Relief Act, 1963.39 As against a trespasser where the title of the lessor
is endangered, he may sue for a declaration of his rights and for a decree giving
him formal possession as against the trespasser.40

36
East India Distilleries & Factories v Mathhias, AIR 1928 Mad 1140.
37
Eashwar v B. Sudershan, AIR 1984 AP 4.
38
Laxmi Narayan Gauri Shankar v Gopal Krishna Kanoria, AIR 1987 SC 8.
39
Nabin Das v KoylasChunder, (1911) 12 Cal LJ 483.
40
Damodar Prasad v Lachmi Prasad, AIR 1928 AP 354.
5. Duty To Use The Property In A Proper Manner

Clause (o) provides that the lessee may use the property and its products as a
person of ordinary prudence would use them as if they were his own. He is
under duty not to use himself or allow any other person to use the property for a
purpose other than that for which it was leased. He must not cut down the trees
or sell timber, or pull down or damage the buildings belonging to the lessor or
work mines or quarries not open when the lease was granted or commit any act
which is destructive or permanently injurious to the property.

6. Duty Not To Erect Permanent Structure On The Property

The lessee must not, without the lessor’s consent, erect on the property any
permanent structure, except for agricultural purposes.41 The word ‘permanent’ is
used in opposition to ‘temporary’.42 What a permanent structure is a matter of
fact; it depends upon the nature of the structure, and the intention with which it
was erected.43 Whether the structure was permanent or not can be judged from
the intention of the party who put up the structure, as may be gathered from the
mode and degree of annexation, and from the fact whether it would be removed
without causing irreparable damage to the demised premises, 44 dimensions of
the structure, the purpose of erecting it, the nature of materials used in it and its
durability.45

7. Duty To Re-Transfer The Possession On Determination Of Lease

On the determination of the lease, the lessee is bound to put the lessor into
possession of the property.46 Where the period of the lease is fixed, the lessee
must put the lessor in possession of the property on its expiry, notwithstanding

41
Kacharulal Agarwal v Bhikam Chandra Kothari, AIR 2008 (NOC) 194 (Chh).
42
Atul Chandra v Sonatan Daw, AIR 1962 Cal 78.
43
Surya Properties Pvt. Ltd. v Bimalendu Nath, AIR 1964 Cal 1 (FB)
44
Edmound Francis Heberlet v Fatima Khatoon, AIR 2011 Cal 13.
45
Venkatlal G Pittie v Bright Bros (Pvt) Ltd, AIR 1987 SC 1939.
46
Venkatesh Narayan v Krishnaji Arjun, (1884) ILR 8 Bom 160.
the absence of a specific ter to that effect.47 In case of more than one lessor, if
there is delivery of possession to one, it means delivery to all. 48 Similarly, if one
of two joint lessee fails to restore vacant possession to the lessor, both will be
liable49 unless the other has not assented to the holding over. Where the lessee
does not hand over the property, the landlord can file for damages or claim for
mesne profits and damages in tort for trespass, 50 or impose penalty at the rate
double the value of the premises, 51 or can throw the lessee out and take
possession himself.52

47
Thagarammal v People’s Charity Fund, AIR 1978 Kant 125.
48
Ram Gopal v Parmeshri Dos, AIR 1924 Lah 474.
49
Marthandammal v Azimunnissa Begum, AIR 1954 Mad 92.
50
Sundermull v Ladhuram, AIR 1924 Cal 240.
51
Narain Doss v Dharam Das, AIR 1932 Lah 275.
52
State of West Bengal v Birendra Nath Basunia, AIR 1955 SC 601.
 CONCLUSION
Every lease agreement has two parties: lessor and lessee. The Transfer of
Property Act confers certain rights and liabilities to lessors and lessees. The
lessor and the lessee of an immovable property possess these rights and are
subject to some liabilities. However, this is effective only in the absence of a
contract. Further, these rights and liabilities may also be affected by local usage
to the contrary.

A lessor is bound to disclose to a lessee any material defect in the property with
reference to its intended use. This is so in cases where the lessor is aware of the
defects but the lessee is not, and could not discover them either. Also, where the
lessor is bound by the lessee's request to put him in possession of the property,
he will be deemed to be liable to ensure that if the lessee pays the rent reserved
by the lease and performs the contracts binding on the lessee, he may hold the
property during the time limited by the lease without any interruption. 

The lessee may transfer absolutely or by way of mortgage or sub-lease the

whole or any part of his interest in the property, and any transferee of such
interest or part may again transfer it. In such cases, the lessee will not cease to
be subject to any of the liabilities attached to the lease. The lessee is bound to
disclose to the lessor any fact as to the nature or extent of the interest which the
lessee is about to take of which the lessee is aware of and which materially
increases the value of such interest.The lessee is bound to pay or tender, at the
proper time and place, the premium or rent to the lessor or his agent. The lessee
is bound to keep, and on the termination of the lease restore, the property in as
good a condition as it was in at the time when he was put in possession, subject
only to the changes caused by reasonable wear and tear or irresistible force. 

Further, a lessee is bound to allow the lessor and his agents, at all reasonable
times during the term, to enter into the property and inspect the condition. When
a defect has been caused by any act or default on the part of the lessee, his
servants or agents, he is bound to make it good within three months after a
notice has been given. If the lessee becomes aware of any proceedings to
recover the property, any encroachment made, or any interference with the
lessor's rights concerning the property, he is bound to give notice of it to the
lessor. 

A lessee should use the property as a person of ordinary prudence would use it,
as if it was his own. However, he must not use, or permit another to use the
property for a purpose other than that for which it was leased. He must not,
without the lessor's consent, build on the property any permanent structure. On
the determination of the lease, the lessee is bound to put the lessor into
possession of the property.
 BIBLIOGRAPHY

1. BOOKS REFERRED
 Dr. Poonam Pradhan Saxena, Property Law (2nd Edition).
 Dr. Avtar Singh, Textbook on Transfer of Property Act (2 nd
Edition).
 Mulla, The Transfer of Property Act (10th Edition).

2. WEBSITES REFERRED
 www.manupatra.com
 www.scconline.com

3. LEGISLATIONS REFERRED
 Transfer of Property Act, 1882.