DAMODARAM SANJIVIYYA NATIONAL LAW

UNIVERSITY SABBAVARAM, VISAKHAPATNAM, A.P,INDIA

PROJECT TITLE- EFFECT OF SURRENDER AND FORFEITURE OF

LEASES

SUBJECT- TRANSFER OF PROPERTY

NAME OF THE STUDENT: P MEGHNA SRINIVAS

ROLL NO.2019109

4TH SEMESTER
 ACKNOWLEDGMENT

I w0uld like t0 express my gratitude and heartfelt appreciati0n t0 my teacher wh0 gave me the g0lden
0pp0rtunity t0 d0 this w0nderful pr0ject 0n the interesting t0pic “People”s union for civil liberties vs union
of India and ors” which helped me learn, analyse and expl0re this specific field 0f subject by digging deeper
int0 the never ending mine 0f kn0wledge thr0ugh an extensive and th0r0ugh research.This topic has helped
me understand the subject better and has given me a sense of clarity on the subject.

Sec0ndly, I w0uld als0 like t0 thank my family wh0 helped me a l0t in c0mpleting this pr0ject successfully
within the given time frame.Lastly, the acknowledgement would be incomplete without appreciation to my
seniors who guided me and showed me the right path in finishing the task of completing the project
successfully.
 TABLE OF CONTENTS

1. Introduction
2. Case analysis of Ms bhagbati builder vs karim bux
3. Case analysis of kisssendas snd others vs binjraj chowdhary and ors
4. Case analysis of Tuk Tuk Garments Pvt Ltd vs Bidhan Nirman Pvt. Ltd on 3
March, 2016
5. Conclusion
6. Bibliography
 ABSTARCT

In India, transfer of property is not possible for every individual because of financial
issues. The permanent or absolute transfer is a luxury for some people, but a
temporary transfer is something that has given every citizen the right of enjoying any
property. One of the modes of transferring property for a particular period of time is
Lease. Lease is a transfer of an interest in the property for a stipulated period of time
without transferring the ownership of that property. In a lease, right of possession is
transferred instead of the right of ownership. Transferor here is called the lessor and
the transferee i.e. the one enjoying the property for a period is called lessee. Lease is
governed by the Transfer of Property Act, 1882 and it is given from Sections 105 to
117.Section 105 states the definition of a lease which states that it is a transfer of
immovable property for a particular time period for a consideration of which the
transferee has accepted the terms surrounding the agreement.In this project I will
discuss about the effect of the surrender and forfeiture on leases with the help of some
case laws.
 INTRODUCTION

In India, transfer of property is not possible for every individual because of financial
issues. The permanent or absolute transfer is a luxury for some people, but a
temporary transfer is something that has given every citizen the right of enjoying any
property. One of the modes of transferring property for a particular period of time is
Lease. Lease is a transfer of an interest in the property for a stipulated period of time
without transferring the ownership of that property. In a lease, right of possession is
transferred instead of the right of ownership. Transferor here is called the lessor and
the transferee i.e. the one enjoying the property for a period is called lessee. Lease is
governed by the Transfer of Property Act, 1882 and it is given from Sections 105 to
117.Section 105 states the definition of a lease which states that it is a transfer of
immovable property for a particular time period for a consideration of which the
transferee has accepted the terms surrounding the agreement.1

What are the essentials of a lease?

Parties must be competent: The parties in a lease agreement should be competent to

enter into a contract. Lesser should be entitled to a property and have absolute rights
over that property.

Right of possession: Ownership rights are not transferred in a lease, only the
possession of the property is transferred.

Rent: Consideration for a lease can be taken in the form of a rent or premium.

Acceptance: Lessee, who is to get the interest in the property after lease, has to accept
the lease agreement along with the time period and terms & conditions imposed on
the transfer.

Time Period: Lease always takes place for a particular time period which is to be
specified in the lease agreement. It can be relaxed at the option of the lessor.

1
https://blog.ipleaders.in/lease-under-tpa-1882/#:~:text=Express%20Surrender
%20%E2%80%93%20This%20happens%20when,surrender%20of%20the%20existing%20lease.
The word surrender presupposes the possession or ownership of the thing that is to be 
returned or given up. It indicates a transfer of title as well as possession, but it does no
t express or in any way suggest the transaction of a sale and delivery. Instead, it invol
ves yielding or delivering in response to a demand. A surrender may be compelled or 
it may be voluntary.

In landlord tenant law,surrender occurs when a tenant agrees to return the leased
premises to the landlord before the expiration of the lease and the landlord agrees to
accept the return of the premises.2

What Is Forfeiture?

Forfeiture is the loss of any property without compensation as a result of defaulting on

contractual obligations, or as a penalty for illegal conduct. Forfeiture, under the terms
of a contract, refers to the requirement by the defaulting party to give up ownership of
an asset, or cash flows from an asset, as compensation for the resulting losses to the
other party.

What are the essentials of a lease?

Parties must be competent: The parties in a lease agreement should be competent to

enter into a contract. Lesser should be entitled to a property and have absolute rights
over that property.

Right of possession: Ownership rights are not transferred in a lease, only the
possession of the property is transferred.

Rent: Consideration for a lease can be taken in the form of a rent or premium.

Acceptance: Lessee, who is to get the interest in the property after lease, has to accept
the lease agreement along with the time period and terms & conditions imposed on
the transfer.

Time Period: Lease always takes place for a particular time period which is to be
specified in the lease agreement. It can be relaxed at the option of the lessor.

2
https://blog.ipleaders.in/lease-under-tpa-1882/#:~:text=Express%20Surrender
%20%E2%80%93%20This%20happens%20when,surrender%20of%20the%20existing%20lease.
 SECTION 115-- EFFECT OF SURRENDER AND FORFEITURE ON UNDER
LEASES

The surrender, express or implied, of a lease of immovable property does not

prejudice an under lease of the property or any part thereof previously granted by the
lessee, on terms and conditions substantially the same (except as regards the amount
of rent) as those of the original lease; but, unless the surrender is made for the purpose
of obtaining a new lease, the rent payable by, and the contracts binding on, the under-
lessee shall be respectively payable to and enforceable by the lessor.

The forfeiture of such a lease annuls all such under-leases, except where such
forfeiture has been procured by the lessor in fraud of the under-lessees, or relief
against the forfeiture is granted under section 114.3

3
Transfer of property act,1882
 M/S. BHAGBATI BUILDER V. KARIM BUX.

FACTS:
The main point that arises for determination in this appeal is as to the position of a
sub-lessee whose lease was created after the West Bengal Premises Tenancy Act,
1956 had come into operation but without the consent in writing of the landlord as
required by Section 14 of the West Bengal Premises Tenancy Act, 1956 (hereinafter
referred to as the Tenancy Act). Admittedly one S. C. Shaw is the owner of the suit
property and one B.B. Sen was a tenant under him. In respect of the premises. B.B.
Sen inducted the appellant as a sub-tenant under him sometime in December 1960 and
no consent, not to speak of in writing, was obtained from S. C. Shaw. Thereafter Sen
surrendered his tenancy and Shaw granted a lease to the respondent. The respondent
filed a suit against the appellant treating him as a trespasser. Admittedly, the premises
in suit are a premises to which the Tenancy Act applies.
ISSUES:The main point that arises for determination in this appeal is as to the
position of a sub-lessee whose lease was created after the West Bengal Premises
Tenancy Act, 1956 had come into operation but without the consent in writing of the
landlord as required by Section 14 of the West Bengal Premises Tenancy Act, 1956
JUDGEMNET:
Both the courts below have held that the sub-tenancy of the appellant was void
because it was granted in contravention of Section 14. The trial court dismissed the
suit holding that the surrender was invalid inasmuch as Shaw did not get delivery of
possession. The lower appellate court appears to have held otherwise and decreed the
suit. Hence this appeal by the defendant.

2. Section 14 of the Tenancy Act Breads as follows:

"14. (1) After the commencement of this Act, no tenant shall, without the previous
consent in writing of the landlord-

(a) sub-let the whole or any part of the premises held by him as a tenant; or

(b) transfer or assign his rights in the tenancy or in any part thereof."
Clear and unambiguous in language, categorical in character and imperative in nature.
Section 14 admits of no exceptions. If Section 14 applies, there can be no escape from
the position that the sub-tenancy in the instant suit would be void. Reference may be
had also in this connection to Section 23 of the Indian Contract Act under which an
agreement which is forbidden by law is void. Ex facie, therefore, this subtenancy
would be void. It is no doubt a fact that the Tenancy Act was enacted to enlarge the
scope of the protection of the tenants which they had under the general law, namely,
the Transfer of Property Act, 1882. But the Tenancy Act of 1956 clearly shows that so
far as the creation of a sub-tenancy without the consent in writing of the landlord is
concerned, it is not only totally forbidden but entails also penal consequences. Under
Clause (a) of Section 13(1), it gives a right to the landlord to sue the tenant in
ejectment Under Sub-section (3) of Section 30, such a tenant is further liable to a fine
which may on the first occasion extend to Rs. 100/-and on a second or subsequent
occasion extend to Rs. 200/-.

3. Mr. Lala Hemanta Kumar relies on Section 115 of the Transfer of Property Act to
show that the surrender by Sen would not affect the rights of the appellant. If Section
115 applies, Mr. Lala's contention has to be given effect to. There is thus a
repugnancy between Section 14 of the Tenancy Act and Section 115 of the Transfer
of Property Act.

4. Mr. Lala wants to resolve this conflict by urging that a sub-tenant, whose sub-
tenancy has been created without the consent in writing of the landlord, will continue
still to be governed by the Transfer of Property Act but will not be entitled to the
protection given to the tenants under the Tenancy Act. In effect, this proposition
would mean that the Tenancy Act would not apply to a sub-tenancy. But the term
'tenant', as has been defined in the Act, would also include a sub-tenant and we cannot
say that a sub-tenancy would be outside the pale of the Tenancy Act. The problem
actually is not one of harmony but of authority. The question is as to which of these
two provisions would prevail. The Tenancy Act received the assent of the President.
Under Clause (2) of Article 254 of the Constitution, the Tenancy Act must prevail
over the Transfer of Property Act within the confines of this State so far as any
provision in it would be repugnant to the provisions of the Transfer of Property Act.
In this view of the matter. Section 14 of the Tenancy Act must prevail over Section
115 of the Transfer of Property Act. As a matter of fact in Ganesh C. Nandy v. J. N.
Chatterjee & Bros., (1966) 70 Cal WN 676, this Court held that Section 114 of
tha Transfer of Property Act would not apply to a case of so-called forfeiture under
the Tenancy Act of 1956 on account of non-payment of rent. This Court further
observed that when the protection itself is created by the statute, which also prescribes
the conditions for the same and provides for its forfeiture under certain circumstances,
it is difficult to hold that relief on a wider basis may be available from other statute,
giving relief under different circumstances. In Santosh Kumar Gupta v. Smt.
Chinmoyee Sen, , this Court again refused to extend the provision of Section 114 of
the Tenancy Act. In Dhirendra Nath Neogi v. Pronab Kumar Neogi, (1957) 61 Cal
WN 887, this court was considering the question as to what would happen if the
previous consent of the landlord was not obtained. This court observed that "such
transfer and assignment being without the previous consent in writing of the landlord
is expressly prohibited by the Act; and is void and totally inoperative."

5. The result, therefore, is that both on principle and on authorities it must be held that
a sub-tenant, whose sub-tenancy has been created without the consent in writing of
the superior landlord, would have no rights in law so far as that landlord is
concerned. Section 115 of the Transfer of Property Act proceeds on the basis that
there is a valid lease. If the basis of the lease goes, as it must go under Section 14 of
the Tenancy Act, then on this ground also Section 115 of the Transfer of Property
Act, would not be available to the appellant. The plaintiff respondent did not claim
any rights through B.B. Sen. He was deriving his rights directly from the owner Shaw.
So, if Shaw could not be bound by the underlease in favour of the defendant, the
plaintiff would not also be bound. The defendant appellant would, therefore, be a
trespasser in occupation of the premises, at least, so far as Shaw and the plaintiff are
concerned, and the court below was justified in decreeing the suit on this basis, He
could have no rights so far as the plaintiff is concerned.

6. Mr. Lala has further alleged that as the premises in question were under the
possession of the appellant and as Shaw did not get back delivery of possession of the
property when the surrender was made by B.B. Sen to him, the surrender would not
be valid. This is an argument which found favour with the learned trial court. But I am
not in a position to accept this proposition as correct. There is nothing to show that so
far as our country is concerned, delivery of possession would be essential before the
surrender becomes valid. After all, it is a matter between the owner and his immediate
tenant and if the owner is satisfied and accepts the surrender without getting delivery
of possession, no one else can have any grievance in this matter. The interest of the
sub-lessee would be protected under Section 115 of the Transfer of Property Act.
Moreover, if we accept this proposition as correct. Section 115 of the Transfer of
Property Act would have no meaning. As this section stands, the possession remains
with the under-lessee and he is given a leg up only. If Mr. Lala's proposition is
accepted as correct, it would not have been necessary to enact Section 115 at all. This
section proceeds on the basis that delivery of possession has not been given by the
lessee.

7. The result, therefore, is that this appeal fails and is dismissed.

8. There will be no order as to costs, however, in this court.

9. In view of the finding above, the application also stands rejected.

RAMKISSENDAS AND ANOTHER VS BINJRAJ CHOWDHURY AND
ANOTHER
The only question in this case is in respect of costs. It arises in this way. The plaintiffs
were in possession of the premises in question as sub-tenants of the defendants.
FACTS
The defendants obtained a decree in ejectment against the plaintiffs’ landlords, and
that decree having been obtained, by section 115 of the Transfer of Property Act, all
rights of sub-lessees who held under the defendants were at an end, for the simple
reason that a landlord cannot give to a tenant or to a sub-tenant something which he
does not possess himself. If his rights are gone, those who claim under and through
him lose their rights also. The effect of that decree was that the present defendants,
who were the head landlords of the plaintiffs, were entitled to possession of these
premises as against the plaintiffs and as against the plaintiffs’ landlords, and the
plaintiffs have not, and have never suggested that they had, a shadow of right to
remain in possession after the decree had been passed against their immediate
landlords. What they say is this, that, although it is perfectly true that they had no
legal ground for resisting the execution of that decree, yet, as they had not been made
parties to the action, they were not bound by the decree. Or, in other words, unless a
landlord chooses to make all the sub-lessees and every body who may have acquired
an interest through those under-tenants, parties to the action, he can only execute his
decree against those persons against whom decrees have been obtained, with the
result that he may have to bring any number of suits ultimately against other persons
who remained in possession. If that were so, it would, | think, tend unduly to multiply
the number of suits, | quite agree that it is convenient that actions for possession based
on forfeiture should be brought against all the parties interested in the premises. It is a
convenient practice, but | apprehend that Mr. Justice Rankin, who in the case cited to
me by counsel for the plaintiffs, was dealing with a different matter, namely, an
application in respect of resistance to delivery of possession under Order XxXI, did
not intend to decide —and, in my opinion, having regard to section 115 of the
Transfer of Property Act it would not have been possible for his Lordship to have
decided—that the effect of not making every tenant and sub-tenant a party was to
limit the right which the landlord would have, on obtaining his decree, to obtain
possession of the premises by executing the decree.
ISSUES
Therefore the question arises in this way. Were the plaintiffs in this action justified in
bringing a suit for which they had no legal ground whatever, a suit to restrain the
present defendants, their head land-lords from obtaining possession of these
premises?
LEGAL PROVISON:
Section 115 of transfer of property
JUDGEMENT:
In my opinion there was no justification at all for taking any such proceedings. | do
not pretend, and it is no part of my duty, in this particular case, to consider the effect
of Order XXI, rules 99 and 101, and | do not propose to express any opinion about the
meaning of those sections. But for the purpose of deciding the question as to whether
the plaintiffs were justified in bringing this action, and in claiming now, when they
have given up possession, that they are entitled to say “We do not propose to go on
with the action, but we were perfectly justified in bringing it and are entitled to our
costs,” in my view it is sufficient for me to hold that they are taking up a wrong
position, that they never had any justification for bringing this action, that they never
had any justification for resisting the execution of the decree, and, in my opinion, the
costs of this action should be borne not by the defendants but by the plaintiffs. The
suit will be dismissed with costs on scale No. 2.
Interest on costs at 6 per cent.
Attorney for the plaintiffs: A.N Das.
Attorney for the defendants: N.C Bose.
 Tuk Tuk Garments Pvt Ltd vs Bidhan Nirman Pvt. Ltd on 3 March, 2016

FACTS:
The plaintiff/respondent no. 1 filed a suit for eviction and recovery of possession of
the suit premises and also for mesne profits and obtained a decree.One Tuk Tuk
Garments Private Limited, being the appellant herein, took out an application
assailing the decree on the ground that the same is the result of collusion between the
plaintiff/lessor and defendant/lessee and, as such, the decree is not binding on the
appellant, who is a sub lessee in respect of a portion of the suit premises.

The learned Judge considered the submissions of the parties at length and referred to
various authorities. The learned Judge noted that although allegations of fraud and
collusion have been made, no sufficient particulars have been furnished as required by
Order 6 Rule 4 of the Code of Civil Procedure. No case of fraud and collusion was
substantiated by the applicant who assailed the validity of the decree.

The learned Judge further considered whether the defendant in the suit had any
arguable defence to the plaintiff's claim and opined that since it was a lease for thirty
years, after expiry of the lease period the defendant had no defence at all and had no
option but to vacate the premises. The question of fraud or collusion would have
arisen had the defendant any defence at all but did not plead such defence at the trial
of the suit. The learned Judge dismissed the application. Being aggrieved, the
applicant has come up before this Court by way of the present appeal.

We have considered the submissions of the learned Counsel for the parties. The
learned Judge considered the merit of the defence and came to a conclusion that the
defendant had no defence at all. It is settled law that a decree against a lessee is
binding on the sub lessee and only Section 115 of the Transfer of Property Act can
come to the rescue of a sub lessee when the surrender of right under the lease is done
by the lessee which has a consequential effect upon sub lessee. In the present case,
there was no surrender of the lease. The lease expired by efflux of time. Hence, there
was no question of application of Section 115 of the Transfer of Property Act.

Having gone through the papers on record, we are also of the view that no case of
collusion or fraud has been made out by the appellant. As held by the Apex Court,
merely not defending a suit does not per se amount to collusion between the parties.
The question of collusion may only arise when the defendant has an arguable defence
but does not present the same before the Court and silently suffers a decree as a result.
Such is not the case here.

We find no reason to differ with the view of the learned Judge and no ground to
interfere with the order under appeal. The appeal fails and is, accordingly, dismissed.
The application is also dismissed.

At this stage, the stay of operation of the order is prayed for. The same is considered
and rejected.

(MANJULA CHELLUR, CJ.) (ARIJIT BANERJEE, J.) AKGoswami

 CONCLUSION

Lease is a very important aspect of real life. Every person has witnessed a lease deal
involving renting of a house, car or etc. Therefore it is important for the general
public to know about the rights of every individual in a lease, and to know about the
provisions that govern lease. Forfeiture occurs when the landlord exercises their right
to regain peaceable possession against the wishes of the tenant.In this project I have
clearly talked about the effect of surrender and forfeiture on under leases with some
case laws. We come to know that there are many effects of surrender of leases and
also when there is forfeiture of the lease. Many rights and rules come to into play. We
need to carefully analyse and see if section 115 of the transfer of property comes into
play or not.
 BIBLIOGRAPHY

Online sources

https://www.casemine.com/judgement/in/5ac5e35c4a93261a1a751ee7

https://indiankanoon.org/doc/164624809/

https://www.casemine.com/judgement/in/56e10d9b607dba3896614216

https://blog.ipleaders.in/lease-under-tpa-1882/#:~:text=Express%20Surrender
%20%E2%80%93%20This%20happens%20when,surrender%20of%20the
%20existing%20lease.