Chapter I INTRODUCTION

111. Determination of lease

A lease of immovable 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; 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; 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 any of these cases the lessor or his transferee 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.

Chapter II Clause (a): Efflux Of Time

Leases for a definite period expire on the last day of the term, and the lessor or any other person entitled to the reversion may enter without notice or other formality provided there is no 'holding over' within the meaning of sec. 116. Accordingly, clause (a) has to be read with sec. 116. Where before the determination of the lease by efflux of time the lessee applies to the custodian for confirmation of the lease under sec. 5A. East Punjab Evacuees' Administration of Property) Act, 1947 and the custodian impliedly assents to his continuing in possession, the lessee does not become a trespasser Thakar Das V Custodian 1 Tenancy getting terminated by efflux of time, tenant is not entitled to any statutory notice to quit P. S. Bcdi v Project & Equipment Corporation 2 . The Supreme Court has reiterated this principle in M. Vijayalaxmi v G. Goverdhan Reddy3. In view of the expression 'law abhors a forfeiture', which has almost become a legal maxim, a lessee is entitled to relief against forfeiture at the appellate stage since a 'suit' includes an 'appeal'. But when the lease stood determined by efflux of time, the grant of relief under sec. 114 would be entirely out of place Shyamlal v Nanda Rani4 Since a lease does not terminate until the expiry of the term, a suit for ejectment and possession before the expiry of the period is premature: but the suit need not necessarily be dismissed, for although it is not maintainable so far as it roiates to the claim for immediate possession, the landlord is entitled to a declaration of his right Ghulam Hussain v Mahomed Hussain5. following Sita Ram v Ram Lai 6 . The Madras High Court holds that such a suit is not maintainable and must be dismissed, even though the lease expires during the pendency ol the

1 2 3 4

AIR 1950 EP 175

AIR 1994 Del 255

(1997)11 SCC 358 AIR 1988 Cal 133 (135) 5 6 ALJ 177 6 18 All 440

suit. The reason is that the rights of the parlies must be determined as on the date of the action brought Ramanandan v Pulikutti7 No notice to quit is necessary when the action for ejectment is brought after the lease has expired and the tenancy has come to an end by efflux of time. When it is not shown that the lessors accepted rent after the termination of the lease, the lessees are tenants by sufferance, being in no better stalus than trespassers and are liable to ejcctmenl without notice Chandi Charan v Ashulosh8 and Md. Fazthzzaman v Anwar Husain9. When the interest of a mortgagee comes to an end. the lease created by him also comes to an end. To this there is an exception. Leases created either in exercise of statutory or express powers are binding on the mortgagor after redemption if those are exercised in the course of prudent management. Whether an act is prudent or improvident has to be decided in the light of the world of the past Tara Chand v Ganga Ram 10 . On redemption the tenant inducted by the mortgagee has no right to be in possession Jadavji v Navnilbhai11. A clause in the lease deed recited that il the lessee remained in possession of the shop-room after the period of lease without the consent of the lessor, he would pay one and half times rent per season. This is not a renewal clause which must be bilateral and not unilateral because the lessee's featrfty to pay enhanced rent is dependent on his possession without the sermssion of the lessor. The clause only safeguards the interests of the lessor to receive the amount from the lessee tor the use and occupation of the premises. The lessee cannot remain in possession of the premises without execution of a fresh lease deed and that having not been done, under sec 111(a) the lessee is liable to be evicted as his tenancy has determined by efflux of time Gulam Natx v Gulam Rasool12 and Lease to rear and catch fish was initially granted for seven years and was later on extended for another two years during the continuance of the agreement. Sec. 106 does not apply as the period fixed in lease was more one year. Such lease is determinable under sec 111(a) by efflux of imited by contract. Continuance of possession by temporary injunction

7 8

21 Mad 288 40 CWN 52 9 AIR 1932 All 314 10 AIR 1978 Delhi 58 11 AIR 1987 SC 2146 (2155) 12 AIR 1986 J&K

court, and ultimate permanent injunction till the defendant is evicted course of law, cannot be held to be assent by the landlord for of lessee's possession and sec. 116 does not apply Narayan Municipal Council13

Chapter III Clause (b): Contingent Term

If the term of tho lease Is limited conditionally on the happening of some event, the lease is determined by the happening of such event. Thus, where the term is limited for thirty years if the lessee shall so long live, the lease is terminable at the end of thirty years or upon the death of the lessee, which event may first happen Chauthmal v Sardarmal14 A lease for 99 years granted to a company provided inter alia that in case the company goes into liquidation voluntarily or otherwise, it will cease to be operative. The company went into liquidalion: Held that clause (d) die- not apply Srinath Zamindary, in re AIR 1952 Cal 207. Where a lease for 40 years contained a clause that if the lessee carried on any business other than manufacture ol salt, the lease would stand cancelled; held that clause (b) did not apply Krishna Chandra v National Chemical15 Where an employee of the landlord occupying a building is liable to be evicted on ceasing to be in employment, the tenancy is governed by sec. 111 (b), T.P. Act and no notice under sec. 106, T.P. Act is necessary for terminating the tenancy Pratap Narain v J. K. Iron & Steel Co.16. When a lease is created by the mortgagee in possession, the lessee cannot claim any right beyond the term of the original lessor's intercsl unless recognised as lessee by the mortgagor on redemption Sachalmal Parasram v Ratna Bai17 If the maximum duration of the term is fixed (the term may be for any length of time but there must be a definite limit), the lease may bo subject to determination within the period; and this
13 14

AIR 1991 On 179 AIR 1959 Raj 24 15 AIR 1957 On 35 16 AIR 1975 All 73 17 AIR 1972 SC 637

may be provided either by a provision that Ihe lease may be determined by notice on a given event, as for example, upon the termination ot a war [ Great Northern Rty Co. v Arnold ]18, or by a provision that the lease is to endure only during the continuation of a specified state of affairs, as for instance, while the lessee remains in the lessor's employment, or continues to occupy the premises, so that upon the state of affairs ceasing the lease automatically determines Halsbury's Laws of England19

18

19

(1916)33 TLR 114 4th Ed.. Vol. 27. para 207.

Chapter III Clause (c): Termination Of Lessor's Interest Or Power

Where the lessor's interest is limited, the lease comes to an end with the extinguishment of that interest Raghuvir Singh v Jethu20. If the lessor holds the property for his own life or for the life of another, the lease would terminate on the death of himself or that other person. A lease granted by a Hindu widow would fall under this clause. Such a lease is. however, voidable and not void on the grantor's death Ma&u Sudan v Rooke21. Where the husband, the contracting party, surrenders the lease, the wife has no legal right to stay on. She becomes a trespasser Sumatilai v Monorama22. This clause does not mean that if in the exercise of his power of due management the mortgagee has entered into an agreement of tenancy, on the mere redemption of the mortgage the tenancy would automatically lapse Hardie v Wahid23. A lease from year to year granted by the manager of a temple in course of management does no: come to an end with the expiry of the office of the manager or his successors Atyam Veerraju v Pechetti Venkanna24. In the case of a lease under sec. 76(a) the lease terminates on the extinction of the mortgage by redemption C. K. Kuttapan v Karihiyayani25. On redemption the tenant inducted by the mortgagee has no nght to be in possession Jadavji v Navnidbhai26. A tenant inducted into possession of an urban building or premises by a usufructuary mortgagee does not retain his status as a tenant alter redemption of Ihe mortgage. He is not entitled to protection under the Rajasthan Premises (Control of Rent and Eviction) Act, 1950 Gouri Shankar v Kapoor Chand 27

20 21

AIR 1923 Pat 130 25 Cal 1 (PC), 24 IA 164 22 (1977)18 GLR 512 23 AIR 1954 All 16 24 AIR 1966 SC 629 25 AIR 1981 Ker 107 26 AIR 1987 SC 2145 27 AIR 1983 Raj 79

Chapter IV Clause (d): Merger

The common law doctrine of merger is statutorily embodied in clause (d) ot sec. 111 of the T.P. Act. The doctrine of merger as contemplated in clause (d) conlemplates (i) coalescence of the interest of the lessee and the interest of Ihe lessor, (ii) in the whole of the property, (iii) at the same time, (iv) in one person, and (v) in the same right. There must be a complete union of the whole interests of the lessor and the lessee so as to enable the lesser interest of the lessee sinking into the larger interest of the lessor in the reversion T Lakshmipathi v P. Nithyananda Rcddy 28 . In mis case the apex court has approved the following decisions which relate to thedoctrine of merger: Badri Narain v Rameshwar Dayal29. The principle underlying the doctrine ol merger has been discussed in notes under sec. 101. The doctrine of merger stands statutorily incorporated in clause (d) ot sec. 111 and has lo be read along with sec. 109 of the Act and not in isolation - Nalakath v Koonkadan30. Under this clause a merger takes place when the tenant acquires the immediate reversion, and the greater estate and the less coincide in the same person without any intermediate estate Suraj Chandra v Behari Lal31. Merger is largely a question of intention, dependent on circumstances, and courts will presume against it when it operates to the disadvantage of a party Natakalh v Koonkadan32. "Merger" is generally defined as the absorption of a thing of less importance by a greater, whereby the lesser ceases to exisl but the greater is not increased, and rights are said to be merged when the same person who is bound to pay is also entitled lo receive Pacific States Savings & Loan Co. v Slrobeck 33 . The maxim nemo potest esse tenons et dominu. i.e. nobody can be both a landlord and tenant at the same time (in respect of the same property) Prosonno v Jagut Chundcr34. Explaining the underlying principles of "merger". Lohoti J. observes:
28 29

(2003)5 SCC 150 AIR 1951 SC 186 30 (2002)6 SCC 1 31 AIR 1939 Cal 692 (695) 32 (2002)6 SCC 1 33 139 Cal App 427 34 3 ClR 159

"A merger, at law, is defined to be where a greater estate and a lesser coincide and meet in one and the same person, in one and the same right, without any intermediate estate. The less estate is immediately annihilated, or, in the law phrase, is said to be merged that is. sunk or drowned in the greater. Thus, if there be a tenant for years, and the reversion in fee simple descends to or is purchsed by him, the term of years is merged in the inhentance. The rule in equity is the same as at law. with this modification; that at law it is invariable and inflexible; in equity it is controlled by the expressed or implied intention ol the parly in whom the interest or estates unite. Merger is founded on the principle that two estates one larger and one smaller cannol and need not coexist, if the smaller estate can in equity, and must in law. sink or merge into the larger estate' Nalakat35. The principle ot merger enunciated in this clause equally applies whore the merger takes place by virtue of transfers by operation of law Prontotho Nath v Kali Prosonno36.

35 36

Supra 28 Cal 744

Chapter V Clause (e): Express Surrender

Section 111 provides for vahous circumstances when the lease of immovable property comes to an end. It contemplates surrender either express as under clause (e) or implied under clause (f) Kamalabai v Mangilal37. For a valid and binding surrender it is not always essential for the lessee to deliver possession of leasehold property to the lessor. This will bo clear from the following observations of the apex court in Kamalabai v Mangilal 38 "It is thus clear that when the parties surrendered the tenancy and substituted it by a fresh arrangement merely because physically the possession was not handed over is not of much consequence. Apparently in the present case also by mutual agreement, the tenancy came to an end and by arbitration what was sought was an arrangement for time on payment of damages for use and occupation. Admittedly, it did not either continue the old tenancy or started a new one. This substitution of new arrangement and the determination of the old by mutual agreement clearly indicates that the tenant surrendered his tenancy right and Ihe court below was not right in coming lo Ihe conclusion that the surrender is not there as possession was not handed over". In either case it is an yielding up of the term of lessee's interest to him who has the immediate reversion or the lessor's interest. It takes effect like a contract by mutual consent on the lessor's acceptance of the act of the lessee. The lessee cannot, therefore, surrender unless the term is vested in him; and the surrender must be to a person in whom the immediate reversion expectant on the term is vested. There must be a taking of possession, not necessarily a physical taking, but something amounting to a virtual taking of possession. Whether this has occurred is a question of fact Shah Mathura Das v Nagappa 39 . This clause applies only to leases which can be surrendered; where a lease is entered into for a definite term, and there is a covenant in it expressly forbidding surrender by the tenant before the expiry of the term, this clause has no application Jotindra Mohan v Emam Ali40 . In cases of surrender, one has to look to the
37 38

(1987)4 SCC 585 Supra 39 AIR 1976 SC 1565 40 9 CLJ 632

substance of the transaction Kashiprasad v Bedprasad41. A formal deed of reconveyance is not necessary to effect a valid surrender Imambandi v Kamaleswari 42. Where the original lease is registered, the surrender of a portion of the tenancy with an abatement of rent can be effected only by a registered instrument B. Ahmed Maracair v Mathuvaliappa 43. Surrender consists in the yielding up of the term by the lessee to the lessor accompanied by delivery of possession and the acceptance of the same by the lessor. Where the Government takes possession of the property under a requisition order, it takes the possession from both the lessor and lessee. It cannot therefore, operate as a surrender so as to terminate the temancy Tarabai v Padamchand44. Where in spite of a letter by the tenant that he would surrender tne lease by a certain date the landlord allows him to continue in possession beyond the intimated period, the original tenancy must be held to be subsisting Gosta Behah v Ramosh45. A relinquishment in writing without a surrender of possession on the part of the tenant does not constitute a sufficient right in the landlord to recover possession by means of a suit in ejectment Amar Nath v Har Prasad46. There can be no valid surrender unless the surrender lakes place by mutual agreement between the lessor and lessee. Therefore, the lessee cannot make a valid surrender by merely giving notice to his landlord that he is going to relinquish the land, and the mere fact that the landlord silently receives the notice, which the lessee has no legal right to give, cannot be regarded as an assent to the relinquishment Judoonath v Scheone, Kilbum & Co 47 . If the lessor has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favour of the lessor, because it was not competent to the lessor to accept the surrender withoul the concurrence of the mortgagee. The right to agree to the surrender of the lease did not remain in the lessor-mortgagor but passed lo the mortgagee, and without the latter's
41 42

AIR 1940 Nag 113 14 Cal 109 (119) (PC) 43 AIR 1961 Mad 28.

44 45

AIR 1950 Bom 89 AIR 1978 Cal 23S 46 AIR 1932 Oudh 79
47

9 Cal 671

consent the surrender was not valid. Consequently, the lessee remained liable to pay rent to the mortgagee Havu v Ganapati48.

Chapter V Clause (f): Implied Surrender

An implied surrender takes place either by the creation of new relationship between the lessor and lessee, such as the acceptance of a new lease, or in other ways based on ihe consent of the parties, or by relinquishment of possession by the lessee and taking over of possession by the lessor which would lead to the inference of an implied surrender of me lease Amar Krishna v Nazir Hasan 14 Luck 72349. An implied surrender can be inferred trom the conduct ot the parties Konejeti v Thammana50. The principle which governs the doctrine of implied surrender of a lease is that when certain relationship existed between two parties in respect of a subject-matter and a new relationship has come into existence regarding the same subject-matter, the two sets cannot co-exist, being inconsistent and incompatible between each other i.e. if the latter can come into effect only on termination of the former, then it would be doomed to have beon terminated in order to enable the latter to operate. A mere alteration or improvement or even impairment of the former relationship would not ipso facto amount to implied surrender. It has to be ascertained on the terms of the new relationship vis-a-vis the erstwhile demise and then judging whether there was termination of the old jural relationship by implication T.K. Lathika v Seth Karsandas51 A surrender does not follow from a mere agreement made during the tenancy tor the reduction or increase of rent, unless there is a special reason to infer a new demise Gappalal v Shiraji52. It is not necessary that in order to operate as a sunender. the new lease should be of the same duration as the existing lease. If a lessee for twenly years takes a new lease lor ten years, the old
48 49

AIR 1930 Bom 329 (330). AIR 1939 Oudh 257 50 AIR 1957 AP 619 51 (1999)7 Supreme 601 52 AIR 1969 SC 1291

lease is of the new relationship vis-a-vis the erstwhile demise and then judging whothcr there was termination of the old jural relationship by implication T.K. Lathika v Seth Karsandas53. On the death of a tenant the tenancy right is inherited by all his heirs who hold the same as tenants-in-common or co-tenants and not as joint tenants. The fact that letter of attornment did not mention the names of some of the heirs and they also did not assert their rights cannot have the effect of determining their rights or cannot amount to an implied surrender Indra Sharma v Gopal Dass54 In the absence of evidence creating a new tenancy, implied surrender of the lease originally held cannot be presumed Sushil v Narayan55. Where the new lease is void or voidable or does not pass an interest according to the contract the acceptance of ii does not operate as a surrender of the original lease Jamini Mohan v Debendra56.

53 54

(1999)7 Supreme 601 AIR 1985 Del 118 55 AIR 1978 Cal 174 56 AIR 1924 Cal 355

Chapter VI Clause (g): By Forfeiture

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 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 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:

Case : Yashpal Lala Shiv Narain vs Allatala Tala Malik Waqf Ajakhan57

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http://indiankanoon.org/doc/1270013/

Chapter VII Clause (h): Notice To Quit

A breach of a condition, as explained earlier, only makes the lease voidable. It is to be remembered that the forfeiture is not complete unless and until the lessor gives notice that he has exercised his option lo determine the lease Asghar v U.P, Government58. The Supreme Court has ruled that the requirement of a written notice is a statutory formality and this requirement cannot be said to be based on any general rule ot justice, equity and good conscience. Hence it is not applicable to leases executed betore April 1930 when the Amending Act of 1929 came into force Namdeo Lokman Lodhi v Narmadabai59. Sale of property under lease without determination of the lease by notice under sec. 111(g) would be void as in that case the lease would be subsisting and the owner of the land had no right to sell it with vacant possession and unecumbered with the lease. The consideration paid therefore failed Chadrawati v Surendra60. Where a suit for eviction is instituted before the expiry of the period of the notice but the plaint is subsequently amended by stating that the claim for possession has matured during the suit, the suit cannot be dismissed as premature Pundlik v Mamraj61. A notice terminating the tenancy in part is invalid Ghasi Ram v Jagat Narain62. If a lease is granted by a municipality, it can be terminated by the municipality according lo law. and only by issuing a proper notice as required by the Transfer of Property Act, because the municipality is not outside the provisions of this Act. The municipality cannot determine the iease by simply sassing a resolution, and then and there requiring the lessee to quit Amnultah v Emp63.

58 59

AIR 1954 All 649 AIR 1953 SC 228 60 AIR 1979 All 406 61 1969 Mad LJ (notes) 23 62 AIR 1976 All 221 63 AIR 1928 All 95

Where a notice under sec. 111(h) has been given, it is not necessary to give also a notice under sec. 111(g) on the ground of forfeiture of the lease Mooi Chand v Ishwar Lal64. Bui if the lessor does not serve the requisite notice under sec 111(g) read with sec. 114A, the lease would be deemed to be subsisting Chandrawati Devi v Surendra Lai Singh65. Landlord agreed to sell the property to the tenant on payment of the purchase money in equal instalments and on failure to make payments the sale agreement would stand cancelled. Tenant did not pay even the first instalment. The landlord then filed a suit for possession of the property without giving one month's notice. Held that after the cancellation of the agreement Ihe tenantappellants cannot be said to have stood restored lo their original position as tenants. Hence the suit can be filed without giving notice under the T.P. Act Arjunlal v Girish Chandra66 In a case there was lease of a shed and not of land underneath it. When the shed had collapsed and the tenant reconstructed the shed and continued to possess the same, the issuance of notice for termination of the lease was not required as the subject-matter of the lease got destroyed and with that the lease came to an end Phulan Devi v Anand Saroop67.

64 65

AIR 1974 Raj 163 AIR 1979 All 406 66 AIR 1973 SC 2256

67

1995 AIHC 1590 (HP)

CONCLUSION
Sec 11 of Transfer of Property Act 1882 i:e Determination of Lease is a very wide topic and covers a large segment of day todays life issues. A lease or tenancy may come to an end in the following ways. It should, however, be noted that the effect of this Section has been practically superseded by varous Rent Control and Eviction Acts passed by various State Legislature fr e.g., By Lapse of time; By happening of a specified event; By termination of lessors interest; By merger; By surrender; By implied surrender; By forfeiture; On the expiration of the notice to quit.