What are the rights and liabilities of a lessor and a lessee?..... briefly the reasons for your reference.

Question: What are the rights and liabilities of a lessor and a lessee? If a tenant executes a rent deed and the landlord also signs thereon, in token of his acceptance, would it be admissible in evidence? State briefly the reasons for your reference. [RJS 1974]

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Answer

Under the Transfer of Property Act, 1882, Sections 105 to 108 lay down the legal framework for leases of immovable property.

I. Rights and Liabilities of the Lessor 

A. Rights of the Lessor

Right to Rent [Section 105]: The lessor is entitled to receive the rent or premium as agreed under the lease.

Right to Recover Possession [Section 111]: Upon expiry or lawful termination of the lease, the lessor can reclaim possession.

Right to Compensation: If the lessee commits waste or damages the property beyond normal use, the lessor can seek compensation.

B. Liabilities of the Lessor

Disclosure of Defects [Section 108(a)]: Must disclose to the lessee any latent material defects known to him.

Quiet Enjoyment [Section 108(b)]: Must ensure the lessee’s peaceful possession without interference.

Delivery of Possession [Section 108(b)]: Must give possession of the property at the beginning of the lease.

II. Rights and Liabilities of the Lessee

A. Rights of the Lessee

• Right to Peaceful Possession [Section 108(c)]: Entitled to enjoy the leased property peacefully during the lease term.
• Right to Recover Damages [Section 108(f)]: Can claim compensation if evicted due to a defect in the lessor’s title.
• Right to Remove Fixtures [Section 108(h)]: Entitled to remove any attachments made during the lease upon termination, if no damage is caused.

B. Liabilities of the Lessee

• Payment of Rent [Section 108(j)]: Must pay rent or premium as agreed.
• Use for Proper Purpose [Section 108(o)]: Must use the property as a prudent owner would and only for the purposes agreed.
• Restoration of Possession [Section 108(q)]: Must return possession upon lease expiry in as good condition as received, subject to normal wear and tear.
• Avoidance of Waste [Section 108(m)]: Must not commit acts that permanently damage the property.

Admissibility of a Rent Deed Signed by Both Parties in Evidence

Yes, a rent deed executed by the tenant and signed by the landlord in acceptance is admissible in evidence, subject to statutory requirements.

Legal Reasoning:

Sections 91 & 92, Indian Evidence Act, 1872 [currently Sections 94 and 95 of Bharatiya Sakshya Adhiniyam, 2023 (BSA)]:

When the terms of a contract are in writing, oral evidence cannot be used to contradict it.

A signed rent deed constitutes primary evidence of the lease terms.

Section 17 & 49, Registration Act, 1908:

If the lease is for more than 12 months, it must be registered.

An unregistered deed for over a year cannot be used to prove the lease but may be used for collateral purposes like possession.

Section 35, Indian Stamp Act, 1899:

If not duly stamped, the deed is inadmissible unless stamp duty and penalty are paid.

Relevant Case Laws:

Anthony v. K.C. Ittoop & Sons [(2000) 6 SCC 394]: The Supreme Court held that even if a lease deed is unregistered and thus void for creating a lease exceeding one year under Section 107 of the Transfer of Property Act, a valid month-to-month tenancy can still arise by oral agreement and conduct of the parties under the second paragraph of Section 107.

The Court ruled that the appellant was a tenant protected under the Kerala Rent Control Act, and eviction could only be sought before the Rent Control Court, not a civil court.

Delta International Ltd. v. Shyam Sundar Ganeriwalla [(1999) 4 SCC 545]: The Supreme Court held that the agreement in question was a license and not a lease, despite the grant of exclusive possession. The Court emphasised that the true intention of the parties, discerned from the terms of the agreement and surrounding circumstances, is determinative, and the document explicitly disclaimed any landlord-tenant relationship.

Since the parties had no legal authority to create a sub-lease without the landlord's consent and no such consent was obtained, the Court restored the trial court’s decree treating the agreement as a license.

Sections 105 to 108 of the Transfer of Property Act, 1882 define the mutual rights and obligations of the lessor and lessee. A signed rent deed, if duly stamped and registered (where required), is admissible as evidence of the lease agreement under the Indian Evidence Act.