DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE:
RIGHTS AND LIABILITIES OF THE LESSOR AND THE LESSEE

SUBJECT
TRANSFER OF PROPERTY

NAME OF THE FACULTY

MR. P. JOGI NAIDU SIR

NAME OF THE CANDIDATE- JASHASWEE MISHRA

ROLL NO. – 20LLB040
SEMESTER- 4TH

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 ACKNOWLEDGEMENT

I would like to thank our TRANSFER OF PROPERTY teacher MR. P. JOGI NAIDU SIR
for giving me this great opportunity to work on this project with the topic named “RIGHTS
AND LIABILITIES OF THE LESSOR AND THE LESSEE”. I have put forward the
collected information to the best of my knowledge to have the clear understanding of the
mentioned topic.

Jashaswee Mishra

20LLB040

Semester IV

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 Table of Contents
ABSTRACT........................................................................................................................................4
SYNOPSIS..........................................................................................................................................5
CHAPTER – 01..................................................................................................................................7
INTRODUCTION..............................................................................................................................7
CHAPTER -02....................................................................................................................................9
RIGHTS AND LIABILITIES OF A LESSOR...............................................................................9
CHAPTER -03..................................................................................................................................11
PRIVILEGES AND LIABILITIES OF A TENANT...................................................................11
CHAPTER -04..................................................................................................................................12
ANALYSIS OF RIGHTS AND LIABILITIES............................................................................12
CHAPTER -05..................................................................................................................................13
CASE LAW -01................................................................................................................................13
K A MATHAI ALIAS BABU V. KORA BIBBIKUTTI: CASE ANALYSIS.........................13
CHAPTER -06..................................................................................................................................15
CASE LAW -02................................................................................................................................15
SUNDARAM FINANCE LTD. V. TERRITORY OF KERALA: CASE ANALYSIS...........15
CHAPTER -07..................................................................................................................................16
CASE LAW -03................................................................................................................................16
RE MARHOEFER PACKING CO CASE ANALYSIS..............................................................16
CHAPTER -08..................................................................................................................................18
CASE LAW-04.................................................................................................................................18
ASSOCIATED HOTELS OF INDIA LTD: CASE ANALYSIS...............................................18
CHAPTER -09..................................................................................................................................24
CASE LAW -05................................................................................................................................24
RAM MURTI DEVI V. PUSHPA: CASE ANALYSIS..............................................................24
Conclusion.........................................................................................................................................25
Bibliography......................................................................................................................................26

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 ABSTRACT
Lease is an extremely normal term that is utilized in managing area or property. Along these
lines, assuming an individual is keen on leasing his level or his property then that individual
will choose leasing it out. Shockingly, individuals pass up unimportant parts of a lease deed
and it creates an uproar. It would be shrewd for an occupant and a landowner to be careful
about their privileges and liabilities so they can stay away from any obstruction and can
partake in a consistent change where a landowner safeguards his inclinations and an
inhabitant will partake in the property he leased.

The expression “lease” is characterized under Section 105 of The Transfer of Property Act,
1882 and that’s what it expresses

“A lease of unflinching property is an exchange of an option to appreciate such property,

made for a specific time frame, express or inferred, or in interminability, in light of a cost
paid or guaranteed, or of cash, a portion of harvests, administration or some other thing of
significant worth, to be delivered intermittently or on unambiguous events to the transferor by
the transferee, who acknowledges the exchange based on such conditions”1.

1
Sohanlal Naraindas v. Laxmidas Raghunath Gadit., (1971) 1 SCC 276

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 SYNOPSIS

OBJECTIVE OF THE STUDY

1) To understand the definition of lessor and lessee.

2) To trace the origin and history of lease.
3) To understand through case laws about the privileges given to the tenant.
4) To understand the measurements undertaken to overcome any concerns and disputes
arising out of this.
SIGNIFICANCE OF THE STUDY

This study will help in understanding the origin of transfers of property as an institution. The
importance of transfers in Indian scenario will be discussed, also the similarities and the
differences between the rights and liabilities of the owner and the tenant will be analysed.
This research will help in distinguishing different forms of transfers and inter-relate the
history of the same.

SCOPE OF THE STUDY

The research is restricted in understanding the prevalence of property transfers and lease in
Indian scenario. This study will cover the different phases, form and aspects lease rights
around the situation.

RESEARCH QUESTION

1) Whether the lease given throughout India is controlled uniformly?

2) Whether the rights of the lessee extinguish under the benefit of the leaser?
3) Whether the concept of legislations as instrument to overcome property disputes is
evident in present situation?

Mode of citation used- Bluebook 21st edition

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LITERATURE REVIEW

1. Transfer of Property under legal and illegal transactions 2 - the researcher has used
this book to refer how the lease is being given and through what terms and conditions,
the rights and obligations come to existence. Though, the book has a very minimal
section on lease granting and section 108 of transfer of property act indirectly, but this
has helped in order to understand the role of privileges of both the lessor and lessee.

2
M. J. Higgins, The Transfer of Property under Illegal Transactions, 25 MOD. L. REV. 149 (1992).

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 CHAPTER – 01

INTRODUCTION
Nature of lease- On the off chance that there is neither an oral affirmation or an enlisted
report of a lease understanding joined by conveyance of ownership then there is no
development.

Nonappearance of enlistment- Assuming there is a shortfall of an enlisted deed when the

span of a lease understanding for unfaltering property is over 1 year then, at that point, all
things considered Section 106 of the Transfer of Property Act applies and that’s what it
expresses:

 Unflinching property for assembling or agrarian reason If there is a shortfall of an

enrolled deed for a relentless property that is utilized for assembling or farming
reason then, all things considered, it is viewed as under a year-to-year lease and the
lease can be restricted on piece of lessor or resident by a half year’s notification.

Undaunted property utilized for dieselise purposes-If there is a shortfall of an enlisted deed
for a steadfast property that is utilized for a few dieselise purposes, all things considered, it is
viewed as under a month-to-month lease and the lease can be restricted on piece of lessor or
tenant by a multi day’s notification. Each notice that is conveyed should be recorded as a
hard copy and endorsed by the individual conveying it. The notification should be conveyed
to the tenant actually or through the mail.

Consent to lease deed or lease understanding interminably- There are sure contrasts
between a consent to lease and a lease understanding yet both of these terms are frequently
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befuddling for commoners and it makes them powerless. So essentially a consent to lease is
the underlying piece of a lease arrangement. Consent to lease makes no legitimate
commitment, consent to lease simply infers the chance of any future exchange. Consent to
lease simply signifies the agreements of an imminent lease understanding. It is only a
venturing stone during the time spent the lease.

Then again, a lease deed or a lease arrangement is a last agreement. A lease deed alongside
the conveyance of ownership makes a lawful commitment upon an individual. A lease deed
moves the freedoms from a lessor to resident for a particular span.

CHAPTER -02

RIGHTS AND LIABILITIES OF A LESSOR

We definitely realize who is a lessor, so legitimately a lessor is allowed sure freedoms and
certain liabilities. Area 108A discussions about the freedoms and liabilities of a lessor, so we
should additionally examine the privileges and liabilities of a lessor.

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PRIVILEGES OF A LESSOR

 Right to increase- If during the occupancy time frame or during the length of the tenure
any further accumulation, aggregation or expansion is made in the property then the
lessor is qualified for such property. Such expansion can be regular or by the cost of the
leaser however after the end of the occupancy time frame, the tenant should convey the
title to the lessor.
 Right to gather lease- The lessor has the option to gather lease or any type of thought as
referenced in the agreements of the agreement from the occupant with no type of
interferences.

LIABILITIES OF A LESSOR

 Obligation of divulgence -The lessor will undoubtedly unveil any type of a material
imperfection in the property. There are two sorts of deformities:
 Inactive deformity - Latent imperfection can’t be found normally or through investigation
by the lessor.
 Evident deformity- Appalease imperfection can be effortlessly found through some
investigation.

So essentially a lessor will uncover any evident deformity to the resident and it is imperative
to reveal such imperfections as they disrupt the satisfaction in the property by the tenant.

 To give ownership - The lessor should give ownership of the property to the resident on
tenant’s solicitation. Nonetheless, this responsibility possibly emerges when there is a
solicitation in the interest of the resident.
 Pledge for calm satisfaction- The tenant has every one of the freedoms to partake in the
property. It is the obligation of the lessor to not bring on any type of interferences during
the tenure time frame. The Madhya Pradesh HC expressed those activities, for example,
actual impedance or direct obstruction in the premises lead to a break of pleasure and
interferences.

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 CHAPTER -03

PRIVILEGES AND LIABILITIES OF A TENANT

Very much like a lessor, a leaser has additionally a few rights and liabilities which are
conceded to him by the Transfer of Property Act. So presently we will dissect the privileges
and liabilities of a leaser.

PRIVILEGES OF A RESIDENT

 To charge for fix- If the lessor neglects to make any fixes in the property which the lessor
will undoubtedly do all things considered the resident can make such fixes by his own
costs. In the event that a leaser makes such fixes by his own costs, all things considered, it
is the right of the resident to deduct the expense of such fixes from the lease or the tenant
may essentially charge the lessor for such fix.
 Right to eliminate installations - The tenant has the option to eliminate any apparatus in
the property during the time-frame of the lease, be that as it may, after the end of the lease
deed the tenant should leave the property in the condition in which he got it. On the off
chance that the tenant neglects to do as such, the lessor can sue the resident.
 Right to appoint his advantage - The resident can sub-lease the property or the tenant can
totally move his inclinations. Nonetheless, in the event that the lease deed confines a
tenant to allocate his advantage, the leaseer is denied to do so and, surprisingly, after the
exchange of his freedoms, the tenant is as yet dependent upon every one of the liabilities
connected with the lease deed.
 Right to have advantages of harvests -When the lease is of unsure span then, at that
point, all things considered, the leaseer or his/her lawful agent has been given the option
to acquire benefits from every one of the yields developed by them.

LIABILITIES OF A RESIDENT

 Obligation to reveal material realities- The leaseer will undoubtedly illuminate the lessor
regarding any material truth which the resident knows about and the lessor isn’t. On the
off chance that the tenant doesn’t unveil such reality and the lessor experiences any
misfortune then the tenant will undoubtedly remunerate the lessor.
 Obligation to pay lease - The tenant will undoubtedly pay the lease or the premium to the
lessor or his representative in the appropriate time and legitimate spot as chosen by the
lease deed. On the off chance that the leaseer neglects to pay his/her lease then, at that

10
 point, all things considered, the lessor can launch the tenant on the ground of non-
instalment of lease or document a suit for unfulfilled obligations of lease.
 Obligation to keep up with the property-The tenant will undoubtedly keep up with the
property in a decent condition as it was the point at which he was given the ownership of
the property. The lessor or his representative are permitted to investigate the property at
the sensible ground. Just the progressions brought about by overpowering powers can go
about as a special case for this responsibility.
 Obligation to pull out- If the resident becomes mindful that any individual has attempted
or is attempting to harm the privileges of the lessor or the title of the lessor is imperilled
then, at that point, all things considered, the leaseer should pull out to the lessor.
 Obligation to involve the property in a sensible way - The leaseer should involve the
property in a way as though it was his/her own property.
 Obligation not to raise any long-lasting design- A resident can’t erect any long-lasting
constructions with the exception of horticulture without the assent of the lessor.
 Obligation to re-establish ownership- After the assurance of the lease, the resident
should re-establish the ownership of the property to the lessor. In the event that the
leaseer doesn’t clear the premises even after the expiry of the notification, the tenant then
will undoubtedly pay the harms.

CHAPTER -04

ANALYSIS OF RIGHTS AND LIABILITIES

In this article, we examined the idea of lease and how a lease is not the same as a permit. We
additionally examined the freedoms and liabilities of both lessor and leaseer who are vital and
fundamental piece of a lease deed.

Through the privileges and liabilities, obviously a lessor should reveal realities and will keep
away from interferences while the leaseer is leased the property. A leaseer, then again, will
undoubtedly take sensible consideration of the property and simultaneously pay his/her lease.
A lease of a property is surely unique in relation to an offer of a property and this article
explains that part of property regulation.

The unmistakable lawful freedoms of a resource proprietor over a cash moneylender were the
essential justification behind the development of leasing and recruit buy as methods of
funding. While plain supporting instruments gave simply a right to cash, both leasing and

11
recruit buy were instances of resource-based dealings and consequently, the lessor had
directly finished and admittance to the resource.

The legitimate privileges of a lessor over the resource have been surely known by Courts in
practically all locales. Except if the lease is a simple gadget to attire a got loaning exchange,
Courts would by and large respect the lease arrangement and permit to the lessor the
privileges referenced in that.

LESSOR’S PREDOMINANT OWNERSHIP INTERESTS

In many nations, the lessor’s prevalent legitimate interest over the rented resource has been
perceived. This is one of the provisos in the UNIDROIT show on global leases. No other bank
of the renter, or a legal authority having a case against the tenant, can have a better lawful
premium over the property than supersede the lessor’s revenue.

CHAPTER -05

CASE LAW -01

K A MATHAI ALIAS BABU V. KORA BIBBIKUTTI: CASE ANALYSIS

For a situation managing employ buy-sell, the Indian Supreme Court as of late maintained the
proprietor’s lawful interest over the resource and his right of repossession regardless of
whether a condition with this impact was not there in the agreement. K A Mathai alias Babu
v. Kora Bibbikutti3. Being a conventional directly over property, it didn’t make any
difference assuming such a statement was explicitly there in the understanding.

There have been cases in India where the renter turned into a wiped-out endeavour, which is
a pre-bankruptcy phase of a modern unit. The Sick Industrial Companies Act contains a ban
on any procedure against the debilitated organization or against its property.
Notwithstanding, as a repossession guarantee by the lessor was a case against the lessor’s
own property, there was no impedance to be made such repossession.

3
K A Mathai alias Babu v. Kora Bibbikutti., (1996) SCC (Cri) 281

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The substance of the above is that any liquidation, Sick Companies, connection or some other
procedures against the tenant wouldn’t influence the incomparable interest of the lessor in the
resource.

PRESENCE OF A TRUE LEASE

All the above privileges are, nonetheless, contingent upon their existing a genuine rent or a
genuine recruit buy exchange. The substance of a genuine rent or genuine recruit buy
exchange is that it should be made out before the legal power that the gatherings really
planned purchasing and renting, or purchasing and employing out a resource and the
exchange was not a true loaning understanding, garbed as a rent or recruit buy. The prefer
leasable privileges of the lessor as resource proprietor wouldn’t be accessible in the event that
the rent isn’t laid out to be a genuine rent.

JUDGEMENT ANALYSIS

A rent should be a genuine rent, not simply in structure but rather likewise in substance.
When in doubt, Courts don’t investigate the substance of each exchange preceding them. If
Courts somehow happened to investigate substance at irregular, no business contract has a
protected harbour, since a Court might analyse the substance and infer that the type of the
understanding struggles with the substance. Ordinarily, arrangements went into by parties
with open eyes, except if there is an aim to cheat any one, would be acknowledged for all
intents and purposes. Subsequently, the structure wins, except if the subject of substance is
carried under the watchful eye of the Court with enough of clarification concerning why the
substance could be dieselise from the structure.

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 CHAPTER -06

CASE LAW -02

SUNDARAM FINANCE LTD. V. TERRITORY OF KERALA: CASE

ANALYSIS
A recruit buy-hire locale in India, one of the principal instances of substance beating structure
was the decision of the Supreme Court in Sundaram Finance Ltd. v. Territory of Kerala 4.
This was deals charge case, and the lessor himself contended that the substance of the
exchange named and reported as a recruit buy was an advance on security. The Supreme
Court alluded to various decisions in England managing the qualification between a recruit
buy and a Bill of Sale, a gadget winning in England to move past cash loaning regulation.
Looking at current realities, the Supreme Court held that the case was for sure one of gotten
loaning, and not a recruit buy.

RELEVANT CASE LAWS REFERRED HERE:

The choice in Sundaram Finance turned into the reason for the Madras High Court to manage
the issue of structure and substance if there should arise an occurrence of recruit buy
exchanges, finally, in Official Liquidator, Mansuba and Co. v. Magistrate of Police 5. This
was a case managing the proprietorship privileges of HP proprietor. While the borrower went
into liquidation and the HP proprietors looked to conjure their responsibility for resources
asserting the resources for be theirs, the Madras High Court drew a differentiation between
resources which were genuinely claimed by the recruit sellers, and the instances of simply got
loaning. In the last assortment of cases, the supposed HP merchant was a simple cash loan
specialist, and had no preferable directly over an unstable moneylender.

JUDGEMENT ANALYSIS

There is, hence, a chance, currently tried in India, of a Court going into the substance of a
rent or recruit buy understanding and holding it to be an instance of gotten loaning. This
question has been truly examined in Courts in a few different purviews, essentially the
nations where renting as a method of funding has existed for a considerable length of time.
Prominently, the duty points in characterizing a genuine rent have not been equivalent to the
legitimate point. The lawful point is just worried about the aim of gatherings to vest
proprietorship freedoms in the lessor.

4
Sundaram Finance Ltd. v. Territory of Kerala., (1966) SC 1178.
5
Mansuba and Co. v. Magistrate of Police., (1969) 1 CLJ 5.

14
For instance, in India, the assessment regulations perceive a hirer as the proprietor. However,
the legitimate privileges of a proprietor are perceived for upholding possession freedoms.
Consequently, the recruit seller is the proprietor to uphold his cases, while the hirer is the
proprietor for guaranteeing possession-based charge remittances. This polarity is effectively
reasonable in India.

In various locales, nonetheless, even according to the perspective of implementing lawful

proprietorship privileges, a recruit buy exchange, or a consent to move successful title to the
resident, would be viewed as a got funding, and not resource possession.

By definition, a rent is viewed as a got supporting, if (a) the rent term is more than or
equivalent to the leftover monetary existence of the resource; b) the rent moves title to the
resident or obliges the tenant to restore the rent for the excess financial life; or (c) the rent
permits the renter right to reestablish the rent on installment of token leaseals, or to be
proprietor on installment of an ostensible sum.

CHAPTER -07

CASE LAW -03

RE MARHOEFER PACKING CO CASE ANALYSIS

In Re Marhoefer Packing Co6., the Court expressed: “A fundamental quality of a genuine
rent is that there be something of significant worth to get back to the lessor after the term”.
This guideline has been acknowledged in England likewise, however in English regulation, as
in India, a lessor’s more right than wrong to a resource isn’t questioned only on the grounds
that it is an instance of recruit buy.

ELEMENTS OF A TRUE LEASE:

Goal to redeliver: It should be display in a rent that the gatherings have planned a lease, not a
deal. Thusly, the goal of redelivery is fundamental. This isn’t simply from the place of tax
reductions, however even from the fundamental proprietorship freedoms of a lessor.

6
Re Marhoefer Packing Co., 674 F. 2d 1139, 33 UCC Rep. Serv. 370

15
Assuming it is appalease that the lessor has consented to a deal squarely in the first place, he
sets himself in the place of a neglected dealer, or a simple got agent.

Purpose to put resources into resource esteem, not only a right to leases: generally, the
imperatives above weight on the requirement for the lessor to view at a rent as an interest
in the worth of a resource, and not only as a production of right to leases. Assuming all that
the lessor sees is the leases made by the rent, the rent will undoubtedly be viewed as a plain
supporting arrangement. The direct of the gatherings should make it apparent that the lessor
is putting resources into resource esteem. For instance, the essential nature of a purchaser in
analysing the worth of a resource, getting him fulfilled about the quality and the value of the
resource, and so forth. That separated, the lessor should be taking a gander at the residuary
interest in the resource and should join importance to it. Peter Coogan and others in Secured
Transactions have called attention to that “the lessor should hold the option to recapture
ownership at a time and in a way that the lingering is a thing of not unsubstantial worth.”

Relationship of Leasing and Financial Services Cos. endeavoured to instruct Indian

lessors on the idea of a genuine rent and drew out a self-administrative note on obvious
rent exchanges. A genuine rent has been characterized in that as an “venture by a lessor in
the worth of a resource, with the expectation of taking advantage of its worth by leasing the
resource out on rent, and without a plan to make a proprietor’s value for some other
individual.”

LEGITIMATE HIRE-PURCHASE THROUGH LEASE:

Like if there should be an occurrence of rent, the genuine bailment highlights apply in the
event of recruit buy as well. Every one of the requirements above if there should be an
occurrence of rent is similarly relevant to employ buy.

What, then, at that point, is the meaning of choice to purchase? The common sense is that
a recruit buy exchange would make clearly the merchandise will be purchased by the hirer,
since the hirer will be given a choice to purchase the products. It is likewise certain that the
choice to purchase will be given at an ostensible worth according to an acknowledged
practice in the country. All in all, is it at all fundamental for the lessor to lay out reserving
a privilege to guarantee redelivery of the resource, or the residuary interest in the

16
resource? All in all, if resources on recruit buy, by truth or by contract, would one say one
is which could never be conveyed, or isn’t even fit for redelivery, is it an instance of
genuine recruit buy?

Courts have perceived the differentiation between recruit buy and contingent deal in view of
whether the exchange suggested a choice to purchase, or a commitment to purchase.
Assuming the setting of the exchange is to such an extent that the hirer has consented to
purchase, or will be obliged to purchase, a recruit buy is viewed as a restrictive deal. For
instance, if a recruit buy contract is non-cancellable for its whole residency, after which the
hirer is given a choice of purchasing at a symbolic worth, it is an as decent as a deal having
been constrained on the hirer. It has been held in a few cases in India that the choice to
purchase, to be significant, should be a genuine choice, and in addition to a fiction.

The English variant of recruit buy has a huge distinction from a contingent deal. The choice
to purchase incorporates a choice not to purchase, or at least, a choice to return the
merchandise. This choice isn’t appropriate toward the finish of the recruiting residency alone:
it is accessible during the employing residency even. Along these lines, during the residency,
the proprietor conveys the dangers of a resource proprietor.

CHAPTER -08

CASE LAW-04

ASSOCIATED HOTELS OF INDIA LTD: CASE ANALYSIS

Associated Hotels of India Ltd. case7, is a milestone choice which explains the test for finding
out the idea of instrument and the qualification between a rent and a permit. The thing that
matters is that of two particular lawful ideas relating to a singular’s rights and obligations in
an agreement. A rent is an agreement between the gatherings that furnishes the transferee or
the renter with right to partake in a steadfast property, that is an interest in the property,
notwithstanding, a permit, is the point at which the proprietor allows to a licensee to direct an
activity on the proprietor’s property just. The fundamental contrast accordingly is of move of
interest.

7
Associated Hotels of India ltd. V. R. N. Kapoor., AIR 1959 SC 1262.

17
FACTS OF THE CASE

For this situation, the appellants, Associated Hotels of India Ltd., were the owners of Hotel
Imperial, New Delhi. The respondent, R. N. Kapoor was in control of two rooms (i.e., fine
people’s shroud rooms) in the litigant’s lodging and led the matter of a beautician under the
name of Madam Janes. The respondent got ownership of the expressed rooms under a deed
dated first May, 1949, executed by him and the appellants. The archive executed by the
gatherings suspected to be one as between a licensor and licensee and gave, entomb alia, that
the respondent was to pay a yearly lease of Rs. 9,500 out of four quarterly portions. In any
case, this was subsequently diminished to Rs. 8,500 by common arrangement.

CONTENTIONS RAISED

On 26th September, 1950, the respondent made an application to the Rent Controller of Delhi
under Section 7(1)[ii] of the Delhi and Ajmere Merwara Rent Control Act, 19478, claiming
that he had consumed the rooms from litigant as an occupant and petitioned God for
normalization of lease. On opposite, the appealing party battled that the respondent was a
licencee under the record and that the Rent Control Act had no application for this situation
as the premises’ being referred to were in an inn, which is excluded from the Act. The Rent
Controller maintained the respondent’s request and fixed the lease at Rs 95 every month, on
the ground that the exception under Section 2 of the Rent Control Act related distinctly to
private rooms in an inn and consequently the Act applied to the premises being referred to.

ISSUES

The two inquiries for assurance under the steady gaze of the Supreme Court for this situation
were:

 Whether the arrangement executed by the gatherings to the suit, made a rent or a
permit?
 Whether the two rooms with the respondent, were rooms in a lodging inside the
significance of Section 2(b) of the Delhi and Ajmer-Merwara Rent Control Act, 1947?

The issue connected with the subject is the primary issue, that is concerning the idea of the
understanding executed by the gatherings. The issue is whether inhabitancy of rooms in an
inn for running a hair parlour made a rent or a permit. Since, in the event that it was a rent,
8
Rent Control Act, 1947

18
the application for normalization of lease under the arrangements of the Rent Control Act,
could be engaged by the court, however assuming it was a permit, there would be no doubt of
obsession of standard lease.

OBITER DICTUM

The seat while concluding the idea of the report dated first May 1949, whereunder the
respondent was placed possessing the rooms, unpredictably analysed the provisions of the
record. By all appearances, the report was depicted as a deed of permit and the gatherings as
licensor and licensee. The court on such finding was of the assessment that the substance of
the arrangement is of most extreme significance and not the structure, for if not cunning
drafting could cover the genuine goal of the gatherings.

In this manner, based on examination of the conditions of the deed, it was seen by the court
that the respondent was given ownership of the two spaces for carrying on his personal
business on a condition that he was to pay a proper sum to the appellants regardless of the
reality regardless of whether he carried on his business in the premises. Additionally, that the
respondent would be expelled without notice, on default of such instalment and would
likewise be responsible to pay with interest. The provisions of the deed permitted him to
move his advantage in the report with the assent of the appellants. Further, the respondent
was to pay for power and power and not make any modifications without the assent of the
appellants.

The court cited with endorsement of the perception of Lord Denning in Errington v.
Errington, that, albeit an individual who is allowed into restrictive belonging is at first sight,
to be viewed as inhabitant, by the by he won’t be held to be so assuming the conditions
negative any aim to make an occupancy.

The inquiry in such cases is one of goal that whether the conditions and lead of the gatherings
was planned to give the occupier simply an individual honour, with no interest in the land.
The Court likewise alluded to a comparable recommendation laid on account of Cobb v.
Lane by Somerville L. J. that the answer for discovering the personality of a record would
appear to have been found is, as one would expect, that it should rely upon the aim of the
gatherings.

19
On scrutiny of the previously mentioned realities and the legitimate arrangements, Subba
Rao J. was of the view that the deed didn’t give an uncovered individual honour on the
respondent to utilize the rooms, rather it had placed him in restrictive ownership of the
property, unrestricted by the control and liberated from grantor’s headings.

Such agreements were seen to be remembered for a rent deed. The right of the respondent
(grantees) to move his advantage under the record, in spite of the fact that with the assent of
the appellants, was held horrendous of the hypothesis of permit as permit is never adaptable,
however just an individual honour. The court closed by holding that the expectation of the
gatherings was in this way clear, and the smart diction utilized or the inventiveness of the
archive couldn’t cover the genuine goal.

RATIO DECENDI

The three-bench passes judgment on seat featured the distinction between a rent and a permit.
It was held that assuming a report gives simply an option to involve the property with a
specific goal in mind or under specific terms while it stays under lock and key and control of
the proprietor thereof, it will be a permit. Also, to discover whether a report was a rent or a
permit, the court gave the accompanying recommendations:

To find out whether a record makes a permit or rent, the substance of the archive should be
linked to the structure; The genuine test is the aim of the gatherings whether they planned to
make a rent or a permit. In the event that the record makes an interest in the property, it is a
rent; yet, assuming it just allows one more to utilize the property, of which the legitimate
belonging go on with the proprietor, it is a permit; and if under the record a party gets
selective ownership of the property, at first sight, he is viewed as an inhabitant; yet conditions
might be laid out which negative the aim to make a rent.

ANALYSIS

In light of the standards and references gave in the former passages, it tends to be securely
stated that, the differentiation between a rent and a permit is exceptionally slim. It is clear
from the separate legitimate arrangements, that the exchange of interest or right to partake in
the property is an occasion of rent. Along these lines, the exchange of restrictive ownership
of the property shows a rent. Notwithstanding, the position is no more so. As seen by the
Hon’ble Supreme Court in the previously mentioned case, the exchange of elite belonging for
the most part shows an aim to make a rent despite the fact that the total is portrayed as a

20
permit charge, is presently not an indisputable test and there might be cases where a
transferee in restrictive belonging is a licensee.

Subsequently, the current situation in such manner is that, to find out the idea of instrument,
the court should view its terms, its substance and not simply the diction utilized. For example,
simple utilization of words fitting to a rent won’t block its being held to be a permit; the
central consideration is the aim of the gatherings to execute such an instrument. The aim
should be assembled from the genuine development of the arrangement and not simply from
the portrayal given by the gatherings.

The respondent No. 1 submitted specific further unlawful demonstrations which have
delivered him obligated for ejectment from the suit premises considering the provisions of the
arrangement. In this manner he made specific harms the suit working disregarding the
arrangements of conditions (m). (o) and (p) of Sec. 108 of the T. P. Act 9. That separated, he
likewise defaulted in instalment of lease to the offended parties. Besides, the offended parties
required the suit premises for their own utilization and occupation as they have no other
option reasonable convenience. Due to non - accessibility of convenience in the suit house
one of the offended parties can’t be given in marriage. Additionally, the convenience in their
current home can’t be made accessible to the wedded sister of the offended parties, when she
needs to come to her dad’s home alongside her significant other and youngsters. The
offended party sent notice to stop upon the litigants dated 25th January, 1983 requesting that
he abandon the premises and convey up the empty ownership of the equivalent for the
offended parties by the last day of February, 1983, however even after receipt of that notice
he has not cleared the suit premises. Thus, the past landlord Mrs. Purnima Gupta recorded the
suit against the respondents appealing to God for a pronouncement of their ousting structure
the suit premises. In this way, during pendency of the suit, the said offended party. Mrs.
Purnima Gupta, passed on and on her demise the current offended party being her legitimate
beneficiaries were joined as offended parties instead of the perished offended party.

ISSUE RAISED

1. Is the suit viable?

2. Is the notification to stop lawful, legitimate, adequate and was it appropriately served ?
3. Is the litigant a defaulter?

9
Transfer of Property Act, 1882, § 108.

21
4. Has litigant No. 1 sub - let the premises to litigant No. 2 without the assent of the
property manager?
5. Is the litigant No. 1 at real fault for acts in negation of arrangements in conditions (m).
(o) and (p) of Sec. 108 of the T. P. Act?
6. Are the offended parties’ proprietors of the suit premises?
7. Do the offended parties sensibly require the suit premises for their own utilization and
occupation?
8. Don’t the offended party have some other in all actuality reasonable convenience
somewhere else?
9. Are the offended parties qualified for the declaration petitioned God for?
10. To what different reliefs, if any. are the offended parties entitled?

ANALYSIS

As per him, the materials on record completely settled the instance of the offended parties
that the respondent No. 1 had rented the suit premises for respondent No. 2 without the
assent of the landowner and on that score the offended parties became qualified for get an
announcement for ousting against the litigants. Also such a long ways as the issue No. 5 is
concerned, the Ld. Munsif came to hold that the proof on record had obviously demonstrated
that the respondents had disregarded the arrangements of Clauses (m). (o) and (p) of Sec.
108 of the Transfer of Property Act by contradicting the particulars of the arrangement of
occupancy and neglected to keep the rented premises in the condition in which it was when
the litigant took the rent. Hence, as per Ld. Munsif, on that score again the litigant became
at risk to be expelled from the suit premises. The issue Nos. 4 and 5 being subsequently
replied against the litigants and for the offended parties, the last option was viewed as
qualified for get a pronouncement for ejectment against the respondent and appropriately
the Ld. Munsif passed the censured judgment under which the offended party got a
declaration of khas ownership in regard of the suit premises on expulsion of the litigant
accordingly and the respondents were coordinated to abandon something similar and convey
khash ownership thereof to the offended parties in two months or less than that.

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 CHAPTER -09

CASE LAW -05

RAM MURTI DEVI V. PUSHPA: CASE ANALYSIS

In Ram Murti Devi v. Pushpa10 decided on 11 July, 2017 the Supreme Court referring to the
relevant precedents culled out the following statement of law:
(i) In a suit by the landlord for eviction of the tenant on the ground of sub-letting the landlord
has to prove by leading evidence that:
 A third party was found to be in exclusive possession of the whole or part of rented
property.
 (b) Parting of possession thereof was for monetary consideration.
(ii) The onus to prove sub-letting is on the landlord and if he has established parting of
possession in favour would shift to the tenant to explain.
(iii) In the event, possession of the tenant wholly or partly is proved and the particulars and
the instances of the transactions are found acceptable, in particular facts and circumstances of
the case, it is not impermissible for the Court to draw an inference that the transaction was
entered with monetary consideration. It may not be possible always to give direct evidence of
monetary consideration since such transaction of sub-letting are made between tenant and the
sub-tenant behind the back of the landlord.

ANALYSIS
In Laxmi Narayan v. Ram Kishan & others 11, the Uttarakhand High Court considered that
the right of transferee landlord in which ownership transferred to landlord by previous lessor.
Landlord becomes lessor and entitled to receive rent and no attornment of tenancy necessary
nor any notice necessary for purpose of alleged attornment. Held tenant has no right to
question title of transferee landlord. Eviction petition, at instance of transferee landlord,
maintainable.
Section 108 (j) of the T.P. Act contains provisions regarding the sub-lessee. Sub-lessee can
also enjoy rights over leased property, if it is allowed in the lease deed. In Urban Amenities
Pvt. Ltd. v. Mrityunjoy Seal & Ors.,12 the Calcutta High Court was asked to decide the rights

10
Ram Murti Devi v. Pushpa., 2017 (15) SCC 230.
11
Laxmi Narayan v. Ram Kishan & others., AIR 2015 Raj 46.
12
Urban Amenities Pvt. Ltd. v. Mrityunjoy Seal & Ors., AIR 2013 Cal 102.

23
of the sub-lessee. In this case, an appeal was filed by sub-lessee against eviction decree. Here,
initially an agreement was entered between lessee and sub-lessee for maintenance of tenancy
held by tenant and deed of lease has not been executed between them. Court held that mere
agreement of maintenance does not confer any right upon sub-lessee to prefer an appeal as a
co-lessee. He being not a co-lessee, he was neither necessary nor proper party and not entitled
to challenge decree of eviction suffered by lessee.

In Murlimal Santram & Co. v. Bata India Limited 13, there was tenancy in which payment of
occupation charges, tenant had by letters agreed for increase of 10% in respect of all
tenancies and additional increase of 15% for ground floor lobby, Tenant was not protected
under tenancy laws and landlord entitled to get occupation charges month by month for use
and occupation of premises. Held tenant was liable to pay at enhanced rate that they agreed as
reflected in two letters, being occupation charges. It is also undisputed, the appellant issued
notice under Section 106 of Transfer of Property Act.

CONCLUSION
Following up are the components which oversees the Rights and Liabilities of a Lessor and
Lessee:

 Any agreement between the gatherings

 Local custom or utilization
 Provisions of section 108 of the Transfer of Property Act, 1882.

In this project, we broke down the idea of rent and how a rent is not quite the same as a
permit. We likewise talked about the privileges and liabilities of both lessor and resident who
are fundamental and imperative piece of a rent deed.

Through the privileges and liabilities, obviously a lessor should unveil realities and will stay
away from interferences while the resident is rented the property. A resident, then again, will
undoubtedly take sensible consideration of the property and simultaneously pay his/her lease.
A rent of a property is unquestionably not the same as an offer of a property and this project
explains that part of property regulation.

13
Murlimal Santram & Co. v. Bata India Limited., AIR 2013 Kar 165.

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 BIBLIOGRAPHY
 Murlimal Santram & Co. v. Bata India Limited., AIR 2013 Kar 165.
 Ram Murti Devi v. Pushpa., 2017 (15) SCC 230.
 Laxmi Narayan v. Ram Kishan & others., AIR 2015 Raj 46.
 Urban Amenities Pvt. Ltd. v. Mrityunjoy Seal & Ors., AIR 2013 Cal 102.
 Transfer of Property Act, 1882, § 108
 Rent control act, 1947.
 Re Marhoefer Packing Co., 674 F. 2d 1139, 33 UCC Rep. Serv. 370
 K A Mathai alias Babu v. Kora Bibbikutti., (1996) SCC (Cri) 281
 M. J. Higgins, The Transfer of Property under Illegal Transactions, 25 MOD. L. REV.
149 (1992).
 Sohanlal Naraindas v. Laxmidas Raghunath Gadit., (1971) 1 SCC 276

25