Lease is a partial transfer of property. Under the lease transfer of possession from the lessor to the lessee is essential. Without possession being actually made over from the lessor to the lessee there is no lease. The transfer of possession contemplated here is the actual or constructive possession of the lessor to the actual and constructive possession of the lessee. The lessor need not be the owner of the property, but he must be possession either legally or otherwise. An illegal occupant can be a lessor. The lessee who obtained possession can never question the lessor’s right to lease the property. When once possession is obtained from the lessor the lessee can never dispute the right of the lessor to lease. Once a lessee is always a lessee. When the lessor is a joint owner or a joint possessor, the Lease Deed shall be executed by all the joint owners who are in possession at the time of the lease. If any action is intended against the lessee all the joint owners shall take action jointly. In such action if the other joint owners refuse to join in the action, they all shall be made as defendants along with the lessee. The action may fail if the others are not joined as parties on the ground of non-joinder of necessary parties.
Lease Deed is not a compulsorily registerable document under the original Registration Act as made by the Union. But subsequently Lease Deed is made a compulsorily registerable document. Lease Deed requires stamp duty whatever be its term.
A special provision is made under Transfer of Property Act for termination of lease. Unless a notice what is called a notice under Section 106 of the Transfer of Property Act, is issued by the lessor to the lessee and the same is served, any action taken by the lessor for eviction against lessee will be treated as not maintainable at all. The suit filed without issuance of such notice will be dismissed outright. A fresh suit only is maintainable if it is filed after giving due notice.
The notice shall clearly state the date by which the lease is determined i.e., terminated, and by giving a further time to the lessee to vacate the property. After the termination of lease, the lessee shall handover possession of the property to the lessor only and to no other.
On the question of notice different procedures and time limits are prescribed. In the case of agricultural leases a notice of a minimum period of 6 months is necessary and that the time of determination of the lease shall coincide with the termination of seasons such as Khariff, and Rabi, and a notice which terminates the lease while the crop is on is not valid. In case of monthly leases, the time when the lease is proposed to be terminated shall fall on or by the date the lease terminates as per the agreement and the time thereafter given to the lessee to vacate from the property shall not be less than 15 days from the date of such termination. In the case of factories the lease cannot be terminated without giving 6 months notice prior to the date of termination. Lease Deed shall be in writing. Lease can be oral. If it is in writing it shall be stamped. It shall be registered where the law so provides. The parties in the Deed shall be fully described and so the property leased. It is better if the Lease Deed is accompanied by a plan and location sketch. It is all the more necessary in a suit filed for eviction so as to enable the court to give an order which could be easily executed. The lessee is responsible for the payment of lease amount till he actually hands over possession to the lessor and no other. Even when he is dispossessed or otherwise loses possession the lessee continues to be liable to payment of rent. If he is dispossessed by superior holder he need not pay any rent to his lessor after dispossession.
There is what is called Attornment of Tenancy. Unless the tenant specifically attorns in favour of the new lessor, the lessee is not liable to pay rent to the new owner.
[Ref: Associated Hotels of India v. R.N. Kapoor, AIR 1959 SC 1262.]