This paper will essentially manage section 106 of the Transfer of Property Act, 1882 which draws the provision of the duration of lease. This paper will productively investigate the distinction between the lease for‘manufacturing or agricultural purpose’ and a lease for ‘any other purpose’. This research paper would also make it very conspicuous for the reader that there are diverse angles in which section 106 wasn’t appropriate as a law of the land as a result of which there were various amendment which took place regarding this.
Proceeding towards the content it would also deal with the scope of legislative history of this section, differentiation, notice etc. But considering the name of section duration of lease lets first discuss what a lease is. It’s been described in section 105of the Transfer of Property Act, 1882.
So considering all the parameters related to this institution which came up at 1882 lease has come up as one the most vital part of the statute and thus in light of the same, in this research paper, the researcher has tried to address the uncertainty that may emerge in such debate in a straightforward yet clear way.
SCOPE AND LEGISLATIVE HISTORY
Considering the scope of section 106 of the Transfer of Property Act, 1882 it’s of the widest amplitude the section establishes a rule for duration of leases which are not governed by a contract or a local law or usage, i.e. where the period of lease is not specified and thus then thereafter various amendments were proposed some passed some not.
Section 106 of the Transfer of Property Act, 1882 lays down a general rule that a lease of immovable property for agricultural or manufacturing purpose shall terminate on six months’ notice by either the lessor or lessee, while fifteen days is the time period in the case of a lease of immovable property for a purpose other than agricultural one. Every notice under this section has to be in writing, signed by or on behalf of the person giving it; either sent by post or is delivered personally.
This section has been amended and altered several times. By the amendment act of 1929, “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” has been substituted with “tendered or delivered personally to the party who is intended to be bound by it.”
By local acts, the following two changes have been brought in the section. Firstly, ‘expiring with the end of a year of the tenancy’ and ‘expiring with the end of a month of the tenancy’ have been omitted. Secondly, the words ‘fifteen days’ and ‘notice’ have been substituted by the words ‘thirty days’ and ‘notice’.
The purpose of the provision in sec. 106 is to terminate the relationship of lessor and lessee before the lessor sues for possession. He has no right of entry till the tenancy is disrupted. Further, the idea is that every lessee must have some reasonable notice before he is asked to vacate the premises.
There are various controversies related to section 106 and all of this started with the wrong interpretation of the case of Mangilal vs. SuganChand,. Years after the notice and the filing of the suit, the court would be compelled to declare the notice invalid, though the defendant had more than the prescribed time of six months or fifteen days by the date of filing of the suit or by the date of judgment dismissing the suit.
Also In the case where the lessess plea was accepted regarding commencement of tenancy this technicality has been leading to too much of an injustice to the plaintiff though no prejudice at all is caused to the defendant. This was all because of the case of Mangilal vs. SuganChand. In Dattonpant vs. Vithalrao similar principle was applied which clearly led injustice to the lessor.
The 108th report on ‘Amendment to sec.106 of the Transfer of Property Act, 1882’ of Law Commission of India, suggested that some provisions of the section needs to be amended. The committee proposed that the provision of expiry should be removed and the duration of 15 days must be substituted by 60 days. This proposal has not been approved yet by the union of India.
LIMITATIONS OF THE SECTION
The scope of this section is limited to certain conditions. They are:-
CONTRACT TO THE CONTRARY – There is not a necessity is this section that the contract to the contrary should be expressed only, rather it can be implied also the only condition being that the contract needs to be valid. All the stipulated provisions under section 106 of the act will remain active until there is a contract to the contrary as to the time of the duration of the lease in the lease agreement. Now the major limitation of this section is that if there is a contract to the contrary with different provisions regarding duration of lease then the statutory requirement of notice is of no use.
In the landmark case of Moosa Ruty v Thekka, the court held that it is not necessary to send a notice to the lessee about the land; a demand will be sufficient if the lease carries a condition that the concerned land will be surrendered whenever required.
In the case of V. Sidharthan v PattiortiRamadasan, the court held that the lessee is bound to surrender the premise on demand of the lessor. This would show a “contract to the contrary”. Also in the very case of Amar Singh v. Hoshir Singh, the court explicitly held that the lessor has the right to evict the lessee without even presenting a prior notice if the lessee fails to pay the agreed rent.
LOCAL LAW TO THE CONTRARY – The presumption considered in this section as to certain leases being deemed to be from year to year or from month to month, can be raised only in cases, where there is no local law to the contrary. It can’t be made if there is a law unexpectedly. Such law must be in force at the time of the judgment. Thus the local law would prevail if the law of the land has stopped to be in force.
Likewise in Uttar Pradesh understanding that the system for interpretation of section 106 of the Transfer of Property Act was prompting foul play convincing the lessor to record the crisp suits after quite a long while have slipped by. The legislature of UP had, by Act 24 of 1954, precluded the words “terminating with the end of a month of the tenure”. It had likewise expanded the time of notice of 15 days on account of month to month tenures to 30 days. After the said UP amendment, the first part of sec. 106 reads as follows:
The said contrary view is reflected in Gorakh Lal v. Maha Prasad Narain Singhwhich also adhered to the principles of the UP act.
USAGE TO THE CONTRARY – many times the provisions stated in section 106 have been doubted and were only considered applicable if there is no usage to the contrary. Utbandi, a custom in Bengal, is a tenancy at will, which can be terminated by a verbal demand for possession. If we talk about usage, then there is a sharp contrast between the usage in Bombay and Punjab. In Bombay it is mandatory to serve a notice to quit at least a month before whereas in Punjab, the notice period is 15 days.In the case of Surendranath Satkar v. Poornachandra Mukherji, the court held thatUtbandi, a custom in Bengal, is a tenancy at will, which can be terminated by a verbal demand for possession. If we talk about usage, then there is a sharp contrast between the usage in Bombay and Punjab. In Bombay it is mandatory to serve a notice to quit at least a month before whereas in Punjab, the notice period is 15 days.
This section clearly differentiates between the procedure and conduct of lease of immovable property for agricultural or manufacturing purposes and lease of immovable property for any other purpose.
LEASES FOR AGRICULTURAL OR MANUFACTURING PURPOSES –
In case of agriculture purpose, the provisions declared by the state government will be applicable to all or one such lease. In most of the cases, the agricultural tenures are controlled by local acts. Some agriculture tenancies are made at the sole discretion of the zamindar but still, these are not considered deviated even if they don’t abide to the statutory provisions.
For manufacturing purposes, the leases are from year to year, terminable by a six months’ notice by either of the parties, i.e. the lessor or the lessee.
The act in itself does not give a proper definition of the term “manufacture” but a clear and acceptable definition is given in the case of South Bihar Sugar Mills Ltd. v. Union of India.
To identify that whether a lease is for manufacturing purpose or not, the following requirements should be fulfilled given in the case of Bachulal Sah v. M.S. Gita Timber Co.
Production of a certain commodity.
- Involvement of either labour or machinery in the production of goods.
- The finished product must have a unique feature, a unique name and should be put to some specific use.
- In simple words, the finished product should be entirely different from its original composition and character. For example, polishing cannot be considered a manufacturing process.
LEASE FOR ANY OTHER PURPOSE – all the other kinds of the lease which don’t come in the ambit of agriculture and manufacturing purpose shall be from month to month terminable by a 15-day prior notice which expires at the end of the month of tenancy. Technically, a lease for several purposes like setting up a printing press or library etc. which does not fall under the ambit of “manufacturing purpose” as interpreted by section 106 of the act will be known as a lease for ‘any other purpose’.
NOTICE TO QUIT
As per section 106 of the Transfer of Property Act, 1882, a notice to quit has to be sent by the lessor to the lessee in order to terminate the lease agreement. The lease agreement can be terminated by issuing a notice of 15 days in cases of monthly tenancy which deals with ‘any other purpose’. If the lease is for agricultural or manufacturing purpose, the notice to quit can be served by giving a prior notice of six months as it is on yearly basis.
There is a list of conditions which need to be fulfilled and procedure in which a notice is to be served. The following conditions are:
- The notice must be candid and unequivocal. The notice terminating the tenancy must be with respect of the property leased, and not in respect of the proportion of the lease and if made it would be considered invalid.
- It should be signed by or on behalf of the person giving it. Similarly, if the notice of the lessor is signed by his attorney or by his sons after his death is considered to be valid.
- The notice must indicate with certainty the intention on the part of the person giving it to terminate the existing tenancy.
- Notice to quit may be served personally or by post. Although the publication of a notice in a local new-paper or publishing the notice in any other public domain, like telegraph, etc, is not a valid notice. In the same way in case of a corporation, the notice must be sent to an authorized officer. A registered notice would always be presumed to be service of the notice.
- Affixing the notice to the property is the last resort. The only thing which has to be taken care of is that the notice should be regarding the whole demised property not in proportion otherwise the notice would be ineffective.
DATE OF EXPIRY OF NOTICE
The concerned section clearly states that if the lease is from year to year, a notice will expire with the end of the year of the tenancy. And, if the lease is from month to month, a notice will expire with the end of the month of the tenancy.
The only thing which has to be taken care of is that the time should not be less than the prescribed time in the statutory provision although the time can be exceeded. The notice should expire at the end of the year or the month otherwise it would be invalid as decide in the very case of Maya Chanda & others v. Krishnan Lal Dey & Anr.
The researcher has therefore tried to establish each and every fact related to this very section and has also presented the various amendments which have been suggested and made regarding this. Considering the injustice which earlier the lessors would have to face 108th report of the law commission has clearly proposed new changes which have brought a more just and reasonable provision in section 106 of transfer of property act. Thus I hope that this project would completely explain and enunciate each and every aspect related to this very section making it easier for the reader to understand it.
By – Durgesh Kumar Shukla
Student, LL.M. ( Access to Justice)
Tata Institute of Social Sciences, Mumbai
 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 (premium) paid or promised, of money, a share of crops, service or any other thing of value (rent), to be rendered periodically or on specified occasions for the transferor (lessor) by the transferee (lessee), who accepts the transfer on such terms.
 a person who leases or lets a property to another; a landlord.
 a person who holds the lease of a property; a tenant.
 If these were the purposes behind section 106 but in fact, the lessee had, by the date of suit or the date of dismissal of suit years later, more than the period specified, in the statute, it is nothing but injustice to the lessor if he is compelled to file a fresh suit. Any procedure that leads to a multiplicity of court cases must be avoided.
 Sanjiva Row, Transfer of Property Act, 1493 (7thedn. 2011)., it stated that that the day on which the notice is served must be excluded though not the day on which the tenancy is sought to be terminated.
 Ibid, AIR 1965 SC 101
 AIR 1975 SC 1111, the facts were as follows: the notice was served on the tenant on 21.11.1968 purporting to terminate the tenancy by the 8th December 1968 treating the month of tenancy as commencing from the 9th day of a month and ending on the 8th day of the month following. It was held that the notice did not expire with the end of the month of tenancy. The end of the month of the tenancy was the 9th day and not the 8th day. Thus it was held that there was no valid and legal termination of the contractual tenancy.
 AIR 1928 Mad 687.
 AIR 1984 Ker 181.
 AIR 1952 All 141.
 “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 a 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 thirty days’s notice.”
 AIR 1964 All. 260 (FB).
 Bhojabhai v. Hayem Samuel, (1898) ILR 22 Bom 754.
 AIR 1933 Cal 609.
Bhojabhai v. Hayem Samuel, (1898) ILR 22 Bom 754.
 Rattan Sen v. Krishna Kaur, AIR 1933 Cal 134.
 Sanjiva Row, Transfer of Property Act, 1493 (7thedn. 2011).
 AIR 1968 SC 922., In this case, the court proposed that ‘manufacturing’ means the formation or fabrication of articles or production of new articles.
 BachulalSah v. M.S. Gita Timber Co., AIR 1996 Ori 3,
 Atal v. Kedar, (1921) 33 cal lj 515
 Mulla, The Transfer of Property Act, 333( Solil Paul ed.2000).
 Jogendro v. Dwarka Nath, (1888) ILR 15 Cal 681.
 1969(II)SCWR 478
Transfer of Property Act, 1882
- Saxena. PonnamPradan. Property Law. Lexis Nexis Butterworths Wadhwa Nagpur. 1st Edition. Third Reprint. 2010. New Delhi
- Sir, Gour, H.S. Dr. Sir Hari Singh Gour’s Commentary on The Transfer Of Property Act, 1882. Delhi Law House. 12th Edition. 2010. Delhi.
- DF Mulla. The Transfer of Property Act, 1882. Lexis Wadhwa Nagpur. (ed. Dr. GC Bharuka). 10th Edition 2006. Haryana
- Chitaley& Manohar. Commentary on the Transfer of Property Act (Vol.1). All India Reporter Pvt. Ltd. 7th Edition. 2010. Nagpur
Disclaimer– This document is intended to provide information only. If you are seeking advice on any matters relating to information on this website, you should contact us directly with your specific query or seek advice from qualified professionals only. We have taken all reasonable measures to ensure the quality, reliability, and accuracy of the information in this document. However, we may have made mistakes and we will not be responsible for any loss or damage of any kind arising because of the usage of this information. Further, upon discovery of any error or omissions, we may delete, add to, or amend information on this website without notice.
Click Here for more Articles
Click Here to write your own Blog/Article on Legal Bites
Author: Durgesh Kumar Shukla
Member, Indian Society for Criminology (ISC)
Student, LL.M. (Access to Justice), Tata Institute of Social Sciences, Mumbai
Interest: Criminology, Victimology and Child Rights