What are the modes of creation of leases under the Transfer of Property Act (TPA), 1882? Ramesh relied.....

Question: What are the modes of creation of leases under the Transfer of Property Act (TPA), 1882? Ramesh relied upon an unregistered lease deed X for a term of more than one year to claim his right in respect of such lease. Discuss the validity of his claim. [HPJS 2019]

Answer

Under the Transfer of Property Act, 1882, a lease of immovable property can be created by the following modes:

1. By Registered Instrument (Section 107)

When the lease is for a term exceeding one year or from year to year, it must be made by a registered instrument, duly executed by both lessor and lessee. This is a mandatory requirement under Section 107 of the Act.

2. By Oral Agreement and Delivery of Possession

If the lease is for a term not exceeding one year, it can be created either:

• By oral agreement, or
• By delivery of possession.

This does not require registration, and the lease is valid as long as the lessee is granted possession and the terms are clear.

Analysis of Ramesh’s Claim

Ramesh is relying on an unregistered lease deed (X) for a term exceeding one year to assert his rights under a lease.

• According to Section 107 of the TPA, a lease for a term exceeding one year is compulsorily registrable.
• If the lease deed is not registered, it is inadmissible as evidence to prove the lease.
• However, under Section 49 of the Registration Act, 1908, such an unregistered lease may be used as evidence of a collateral transaction, such as proving possession, but not to establish a lease itself.

In Anthony v. K.C. Ittoop & Sons, (2000) 6 SCC 394, the Supreme Court held that even an unregistered lease deed for more than one year cannot create a valid lease but may create a month-to-month tenancy if the lessee is in possession and rent is being paid.

In Satish Chand Makhan v. Govardhan Das Byas, (1984) 1 SCC 369, it was observed that an unregistered lease for more than one year cannot be used to claim rights under such lease.

Ramesh's reliance on unregistered lease deed X for a lease exceeding one year does not create a valid lease under the law. Therefore, his claim of rights based on such a deed is legally invalid. At best, if he is in possession and paying rent, he may be considered a tenant at will or a monthly tenant under Section 106 of the TPA, depending on the circumstances.