ASSIGNMENT-19

INTRODUCTION

Lease is a transfer of interest in the property for a stipulated period of time without transferring
the ownership of that property. Right of possession is transferred instead of the right of
ownership. Tranferor is called the ‘lessor’ while transferee is called the ‘lesse’. It is governed by
Section 105 to Section 107 of the Transfer of Property Act.

ESSENTIALS

1. Parties must be competent to enter a contract with the lessor being entitled absolutely
over the right of property.

2. Right of possession is the only thing that is transferred, not the ownership.

3. Consideration of lease is in the form of rent or premium.

4. Acceptance of lease agreement by the lesse is a must.

5. Time period for the lease is to be specified in the agreement.

Section 106 of the Transfer of Property Act provides for the duration of lease in the absence
of lease agreement.

Section 107 of the Transfer of Property Act states that in every case where lease is of an
immovable property for one year or more it can be made only by a registered deed.

RIGHTS OF LESSOR AS GIVEN UNDER SECTION 108

 A lessor will have the right to recover rent from the leased property

 A lessor will have the right to take back his property from the lesse on account of
breach of condition by the lesse.

 If there is any damage to the property leased, the lessor will have the right to recover
the damages from the lesse

RIGHTS OF LESSE

 Lesse has the right to deduct any expenses incurred he has made for repairs from the
rent
  Right to detach all things that he attached in the property on own expenses of
expiration of date.

 Right to transfer absolutely or any part of his interest in the property by sub-leasing or
through mortgaging.

LIABILITIES OF LESSOR

 Bound by the request of the lessee to hand over right of possession over his property.

 Bound to disclose any material defect relating to property which the lessee does not
know about and cannot know with ordinary supervision.

LIABILITIES OF LESSE

 To disclose all material facts of the property which can increase its value of which the
lessor is aware of.

 To pay rent settles in the time limit within the agreement.

 To take care of property and return it in the same condition

DETERMINATION OF LEASE

Section 111 of Transfer of Property Act states that a lease may be terminated in the following
ways-

1. On lapse of time stipulated in the agreement

2. On happening of a specific event upon which the lease depended
3. Lessor interests to property may cease.
4. By express or implied surrender

In the case of Bail Leasing and Finance Limited v. Income Tax Officer (2004) JP 340, the
court held that, in a lease the ownership of the property rests with the lessor and what is being
transferred is merely the right to use it during a stipulated period. At the end of the stipulated
period, the lesse may return back the property, or may renew the lease or take over the asset from
the lessor at a negotiated price.
 LEASE DEED

This Lease of Deed made at New Delhi on eighth day of May 2020 between Sharan Malik S/o
Shyam Malik R/o 234 CR Park, New Delhi hereinafter referred to as the “lessor”, and Shoib
Zafar S/o Ahmad Zafar R/o Govind Puri New Delhi, hereinafter referred to as the “lesse”.

The expression “lessor” and “lesse” wherever they occur in the body of the agreement, shall
mean their successors, legal representatives, administrators and executors and nominees.

Whereas the lessor is the owner of the building bearing 44 A CR Park New Delhi and has the
absolute right to transfer or alienate the property. (hereinafter referred to as ‘said premises’).

Whereas the building being in a non-occupied state since over two years was ready for
possession and occupation and whereas the lesse being in need of accommodation had
approached the lessor for the grant of lease in his favor in respect of the said premise. The lessor
agreed to grant the lease and both parties desired to reduce the terms in writing, and hereby it is
agreed to as follows-

1. That lease for the said premises is for a period of five years commencing from June 1,
2020- June 1, 2025.

2. That the rent is to be payable on a monthly basis for the entire duration of the lease
period. The rent per month is agree at ₹25,000/- per month (Rupees Twenty Five
Thousand only).

3. The lesse hereby agrees the following covenants-

a. To pay rent hereby reserved on the day and manner agreed to.
b. Not to sub-let, assign, dispose the said premises
c. To keep in the premises in a tenable position
d. To not use the premises for illegal purposes

4. The lessor hereby agrees to the following covenants

a. The lessor is the absolute owner having possession of the property and has
the authority to part with it.
b. To not disturb the lesse during the period of lease, provided the lesse pays
the monthly rent and abides by the covenants signed on his part.

5. That if the event that the lesse fails to pay the monthly rent or contravenes any of his
stipulated covenants, the lessor reserves the right to evict the lesse after haven given a
notice of this intention fifteen days prior to such eviction. However, if the lesse pays the
rent due within the fiteen days as mentioned in the notice, the lessor shall not be entitled
to take the possession.
6. That the lease agreement shall be executed in counterpart.
7. That on expiration of the lease deed, the lesse shall hand over the peaceful and vacant
possession of the said premise.
8. That the stamp duty and all other expenses with respect to the lease deed shall be born by
the lesse.

IN WITNESS WHEREOF, the lessor and lesse have signed this deed at New Delhi first
mentioned in the presence of the following witnesses-

1. Anirudh Nigam Sharan Malik

S/o Swaran Nigam
R/o C24 Malviya Nagar, New Delhi

2. Adnan Yousif Shoib Zafar

S/o Wahid Yousif
R/o 224B Amar Colony, New Delhi