Notice To Lessor Of Lessee'S Intention Not To Renew Lease Where Lease Provides For A: Fill & Download for Free

DETERMINATION OF LEASE = TERMINATION OR EXPIRY OF LEASEBY EFFLUX OF THE TIME = PASSAGE OF TIME______________________________Section 111 in The Transfer of Property Act, 1882111. DETERMINATION OF LEASE. — A lease of immoveable property determines—(a) BY EFFLUX OF THE TIME limited thereby;(b) where such time is limited conditionally on the happening of some event—by the happening of such event;(c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event—by the happening of such event;(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right;(e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them;(f) by implied surrender;(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter 1[* * *]; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; 2[or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event]; and in 3[any of these cases] the lessor or his transferee 4[gives notice in writing to the lessee of] his intention to determine the lease;(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other. Illustration to clause (f) A lessee accepts from his lessor a new lease of the property leased, to take effect during the continuance of the existing lease. This is an implied surrender of the former lease, and such lease determines thereupon.______________________________Determination of lease: Legally ending of Lease: cancelable/ breakable leaseEfflux of the time: passage of timeA gross lease or tenancy stipulates a rent that is for the total amount due including all service charges. A determinable lease (cancelable / breakable lease) is a lease that may be terminated (formally determined) solely by the lessee or solely by the lessor without penalty._______________________________TENANT AT SUFFERANCEA person who is a tenant at sufferance has no estate or interest in the leasehold property. A tenant holding after the expiry of his term is a tenant at sufferance, which is a term useful to distinguish a possession rightful in its inception but wrongful in its continuance from a trespass which is wrongful both in its inception and in its continuance. A co-owner can maintain a suit by himself in ejectment of a trespasser or a tenant at sufferance; B.” --- Valsala v. Sundram Nadar Bhaskaran, AIR 1994 Ker 164.____________________________It has been held that the Board was entitled to institute proceedings against the tenant as the notice period had expired; VASANT KUMAR RADHAKISHAN VORA V. THE BOARD OF TRUSTEES OF THE PORT OF BOMBAY, AIR 1991 SC 14._____________________________The normal expiration of a lease due to the efflux of time (meaning passage of time), rather than due to a specific event that might cause the lease to end, such as destruction of the building.Fixed period lease agreement expired by EFFLUX OF TIME: Once a fixed period lease agreement expires by efflux of time i.e. with passage of time, the terms and conditions of the lease agreement is not binding on landlord and tenant.Under the provisions of Transfer of Property Act, 1882 ('TPA'), one of the grounds for termination of a lease is by efflux of time. To ensure clarity over their respective rights and entitlements, both lessors and lessees must be aware of the consequences of an expiry of lease due to efflux of time - especially of the different implications of choosing between an 'EXTENSION', 'RENEWAL' OR 'HOLDING OVER' of a lease. These legal concepts apply to situations where a lessee is desirous of continuing to lawfully occupy the leased premises, even after expiry of the original lease period.EXTENSIONExtension clauses - a distinct category of clauses that relate to consequences of expiry of a lease - are commonly incorporated in Lease Deeds. An extension clause entitles a lessee to opt for an additional lease term upon expiry of the initial lease term, on the same terms and conditions of the original Lease Deed, and is generally subject to increases in rent and security deposit. Ordinarily a lessor is not in a position to challenge or unreasonably deny an extension of lease which is validly sought by a lessee - the lessor is treated as having agreed to lease the property for the total duration contemplated under the original Lease Deed. Hence, the lessee's exercise of its option of extension of lease would not hinge on obtaining the lessor's assent.Unlike a Lease Deed containing a renewal clause, a Lease Deed containing an extension clause would not terminate upon expiry of the initial lease term, in case the option to extend the lease has been duly exercised as per the terms and conditions of the original Lease Deed. In PROVASH CHANDRA DULAI V. BISHWANATH BANERJEE (1989), Hon'ble Supreme Court of India held that a Lease Deed is not necessarily required to be executed afresh in order to give effect to an extension of the original lease. Rather, the original Lease Deed continues in force during the extended lease term, since an extension of lease is only a prolongation of the original lease. In STATE OF UTTAR PRADESH & OTHERS V LALJI TANDON (2003), the apex court similarly held that the principal lease would continue to be in force for the additional lease period agreed by the Parties.Another vital difference between an 'EXTENSION' vis-a-vis 'RENEWAL' of lease pertains to the stamp duty implications. In PUNJAB NATIONAL BANK V. VIJENDER KUMAR & ANOTHER (2013), the Hon'ble Delhi High Court held that parties cannot rely on an extension clause to avoid payment of applicable stamp duty for the total lease term contemplated under the original Lease Deed, simply by paying stamp duty calculated on the basis of the initial lease term. To give effect to an extension clause, stamp duty is required to be paid in the first instance and calculated on the basis of the total lease term contemplated in the original Lease Deed. In contrast, as a 'renewal' of lease is a fresh lease in itself, the initial lease period cannot be clubbed with the renewed lease period for the purpose of levying stamp duty. As a 'fresh' Lease Deed for a renewed term is treated independent of the original Lease Deed, the two agreements would be chargeable to stamp duty independently as well.RENEWALWhen a Lease Deed for a fixed term contains a clause for renewal of the lease for a further fixed term, Parties erroneously assume that by having incorporated a renewal clause, the original Lease Deed would automatically stand renewed for such additional period upon expiry of the initial lease term. However, to give effect to a renewal clause under the original lease, a Lease Deed has to be executed afresh by the Parties, evidencing such renewal. Further, the Lease Deed for the renewed term should be duly stamped and registered. The nature of renewal of lease was highlighted in DELHI DEVELOPMENT AUTHORITY V DURGA CHAND KAUSHISH (1973), where the Hon'ble Supreme Court of India observed that a 'renewal' of lease is called so because it postulates the existence of a prior lease which generally contains a clause for renewal. In all other respects, a renewal is essentially a 'fresh' grant of lease by the lessor.An interesting issue on whether a renewed lease would automatically entitle a lessee to obtain further renewals came up in STATE OF UTTAR PRADESH & OTHERS V LALJI TANDON (2003). In this case, the Lease Deed under dispute was for a period of 50 years and contained a clause for renewal for a further lease term of 50 years. The State Government contended that the lease was renewable only once for a further term of 50 years. That is, upon expiry of the renewed term, the right of renewal under the Lease Deed stood exhausted and the lessee would not be entitled to continue seeking further renewals. The apex court held that where an original Lease Deed contains a clause for renewal, and the Parties do renew the lease in accordance with such clause, whether or not the lessee would be entitled for further successive renewals shall depend on the facts and circumstances unique to each case. In such disputes, the courts would ascertain the intention of the parties and assess wording of relevant clauses of the Lease Deed.Where the original Lease Deed contains a clause for renewal but the lessor fails to execute and/or get registered the 'fresh' grant of lease for the further lease term despite requests of the lessee, the aggrieved lessee may file a suit for specific performance of the renewal clause, provided the lessee is not guilty of having violated or breached any material terms of the original Lease Deed. To successfully secure a renewal of lease, lessees should exercise their option of renewal within the time period stipulated under the original Lease Deed.HOLDING OVERWhere parties rely on 'renewal' or 'extension' clauses for lease of the premises beyond the initial lease term, their rights and obligations arise from the written Lease Deed executed by them. However, there are also cases where in the absence of a written contract, a fresh lease is created by virtue of an implied agreement between the parties. It is common knowledge that on expiry of a lease, it is the duty of the lessee to hand-over vacant and peaceful possession of the property to the lessor. The expression 'holding over' applies to cases where a lessee retains possession even after expiry of the initial lease term. However, the mere act of retaining possession of the property would not necessarily or automatically create a new tenancy. Rather, there must be a bilateral act by the parties for creation of a new lease. The lessee's conduct of retaining possession of the leased premises and continuing full and timely payment of rent even after expiry of the original lease term would ordinarily indicate his desire to remain as a lessee. In most cases, the lessor's consent was indicated by conduct such as voluntarily accepting rent from the lessee. Upon receiving the lessor's consent, a fresh tenancy would stand created by virtue of an implied agreement between the parties, unless there is an agreement to the contrary. Such holding over would amount to a fresh tenancy even if the Parties decide to continue the tenancy on the same terms and conditions of their earlier lease.Here a distinction must be drawn between lawful and unlawful possession of the premises by lessees after the lease term has expired. Whilst a lessee 'holding over' is a lawful occupant as he continues to retain possession with consent from the lessor, a lessee who continues to retain possession without consent (whether implied or explicit) from the lessor does so unlawfully and is a 'tenant at sufferance'. As no lawful tenancy stands created in favour of a tenant at sufferance, an aggrieved lessor is entitled to file a suit for eviction forthwith. However, to terminate an ongoing lawful tenancy, the lessor would first be required to give the lessee prior notice for termination and the relief of eviction may be sought when the lessee fails to vacate the premises beyond the notice period.Unfortunately, courts in India are weighed down by frivolous litigation in matters of tenancy. A simple case of arrears of rent and ejectment recently came up before the Hon'ble Supreme Court of India in December, 2014, in SATENDRA SINGH V VINOD KUMAR BHALOTIA, where the apex court highlighted how the process of law was sought to be abused by the lessee by repulsing the lessor's attempts to recover possession of the premises. The lessee had continued to occupy the suit premises even after 32 years had elapsed since the expiry of the original lease agreement which had been executed for a lease term of only 11 months. In the words of the judiciary, 'nothing short of immediate and emergent measures are required to solve this crisis.'_______________________________Expiry of LeaseSection 106 in The Transfer of Property Act, 18821[106. Duration of certain leases in absence of written contract or local usage.—(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice.(2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice.(3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section.(4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.]____________________________Doctrine of mergerThe doctrine of merger is attracted when a leasehold and revision coincide. If the lessee purchases the lessor’s interest, the lease is relinquished as the same person cannot at the same time be both landlord and tenant. The doctrine of merger is based on the principle of union of two conflicting interests which cannot be held by one person at the same time. Therefore, the leasehold rights in favour of the appellants stand extinguished; RAMESH KUMAR JHAMBH V. OFFICIAL ASSIGNEE, HIGH COURT BOMBAY, AIR 1993 BOM 374.Implied surrender there can be implied surrender, if the lessor grants a new lease to a third person with the assent of the lessee under the existing lease who delivers the possession to such person or where the lessee directs his sub-tenant to pay the rent directly to the lessor. Since the respondents had by executing the agreement impliedly surrendered their leasehold rights, they were no longer lessees; P.M.C. KUNHIRAMAN NAIR V. C.R. NAGARATHA IYER, AIR 1993 SC 307.Clause (1) of section 111(g) has no application as there was no covenant prohibiting sale or on its breach, of the right of re-entry. Clause (2) of section 111(g) is also of no avail to the landlord for forfeiture because there is no unequivocal and clear disclaimer of title of the landlord. Therefore neither clause (1) nor (2) of section 111(g) are of any avail for forfeiture; GURU AMARJIT SINGH V. RATTAN CHAND, AIR 1994 SC 227.The statement by the tenant that he was not aware of as to who was his landlord cannot be held to be denial of title of landlord and no eviction decree by forfeiture was granted; MUNISAMI NAIDU V. C. RANGANATHAN, AIR 1991 SC 492.It has been held that the Board was entitled to institute proceedings against the tenant as the notice period had expired; VASANT KUMAR RADHAKISHAN VORA V. THE BOARD OF TRUSTEES OF THE PORT OF BOMBAY, AIR 1991 SC 14.____________________________________Section 116 in The Transfer of Property Act, 1882116. Effect of holding over.—If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106.Illustrations(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100. The five years expire, but C continues in possession of the house and pays the rent to A. C’s lease is renewed from month to month.(b) A lets a farm to B for the life of C. C dies, but B continues in possession with A’s assent. B’s lease is renewed from year to year.