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Section 105 of the Transfer of Property Act, 1882 defines a lease as

follows:
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.

As per Section 105 Transfer Of Property Act, a lease of immovable property is


a transfer of a right to enjoy such property made for a certain time or in
perpetuity. The expression transfer of a right to enjoy stands in contrast
with the words transfer of ownership occurring in Section 54 in the
definition of sale. In a sale all the rights of ownership , which the transferor
has, passes on the transferee. In a lease transaction , the transferor is called
the lessor, the transferee is called the lessee, the price paid or promised is
called the premium and the money , share , service or other thing to be so
rendered is called the rent
. Essentials ingredients of a lease agreement are
a) Parties to Lease
There must be two parties in a lease i.e. lesser (Transferor) and the lessee
(transferee). A lease arises in agreement between the owner of a property
and the person who proposes to take that property for a term on payment of
consideration. A man could not grant a lease to himself
b) Subject matter of lease
There may be composite leases also like lease of a building along with
equipment and lease of a factory along with machinery etc. A lease of a
house or of a shop is a lease not only of the superstructure but also of its
site1. Lease premises is not only a building or part of building but also the
land and other things appertaining to it and also furniture and other fixtures
provided by the landlord.

1 T. Lakshmipathi v. P. Nithyananda Reddy, 2003 (3) RCR (Civil) 306 SC

c) Transfer of right
In lease there is a transfer of right of enjoyment of property. Right of
enjoyment is transferred only when there is transfer of possession. In
mortgage and lease only partial interest is transferred, therefore it is transfer
of a limited estate. This limited estate i.e., right of enjoyment is known as
demise. lease hold estate is transferred after being separated from
ownership. This is right in rem.
d) Duration of lease
The essential of a lease is that the right to enjoy the property must be
transferred for a certain time, express or implied or in perpetuity. The
document of lease must show the time period of operation of lease and when
it is going to commence. The commencement of the lease must be certain in
the first instance or capable of being made certain afterwards. It may
commence either in the present or in the future or on the happening of a
certain contingency which is bound to happen.
Three types of lease are recognized by this section:(i)

Lease for a certain time;

(ii)

Periodic leases; and

(iii)

Leases in perpetuity

e.) Consideration
A lease is a transaction which has always to be supported by consideration.
Consideration may be either premium or rent. Where the whole amount
payable as consideration is paid in lump sum it is called premium the
consideration which is paid periodically is called rent.
Duration of leases (Section 106)
However such leases are subject to contrary contract or local law or usage.
Under section 106 , lease of immovable property for agricultural or
manufacturing purposes where there is no contract to t e contrary, shall be
deemed to be a lease from year to year and lease of immovable property for
any other purpose shall be deemed to be a lease month to month. Where the

lease has other purpose shall be deemed to be lease month to month. Where
the lease has come to an end by efflux of time, no notice is required under
section 1062.
the duration of lease will be as under:(1)

a monthly lease or tenency can be determined by the lessoror lessee


by
(a) a notice in writing,
(b)notice must be of 15 days,
(c) the 15 days, notice must expire with the end of a month of tenancy,
and
(d)the notice must be served in the manner provided in this section.

(2)A lease from year to year can be determined by the lessor or lessee by:
(a) a notice in writing,
(b)the notice should be of six months,
(c) the notice must expire with the end of a year of the tenancy, and
(d) the notice must be served in the manner provided in the section itself.
Form and construction of notice
Every notice under this section must be in writing and signed by or on behalf
of the person giving it. The notice must be either(a) sent by post to the party who is intened to be bound by it, or
(b)tendered or delivered personally to such party, or to one of his family
or servats at his residence, oraffixed to a conspicuous part of the
property where such tender or delivery is not practica
Mode of creation of lease (Section 107)
2 Narayan Reddy v. Balasore Municipal Council, AIR 2001 Ori 1

According to section 107(1) a lease of immovable property from year to year


or for any term exceeding one year or reserving a yearly rent can be made
only be a registered instrument.
Lease from year to year
Such a lease is a continuous lease. Here the lessee cannot terminate the
lease without giving a notice at the end of the year.
Leases for a term exceeding one year
Where the term of lease exceeds one year it must be registered. The
Supreme court held in Rajendra Pratap Singh v. Rameshwar Prasad3,
that a lease for a term exceeding one year must be through a registered
instrument. But for the validity of the instrument the signing of the
instrument both by lessor and lessee is not of the instrument the signing of
thed instrument both by lessor and lessee is not sine qua non. Joint
execution of the instrument is sufficient for the purpose
Lease reserving yearly rent
Where the rent is reserved for the whole year, there is a presumption that it
a year to year and it is register able.

3 AIR 1999 SC 37