Lease Deed – Unregistered

It is also a well settled position of law that in the absence of a registered instrument, the courts are not precluded from determining the factum of tenancy from the other evidence on record as well as the conduct of the parties. A three Judge Bench of the Hon’ble Apex Court in Anthony v. K.C. Ittoop and Sons, (2000) 6 SCC 394, held as under:

“12……..A lease of immovable property is defined in Section 105 of the Transfer of Property Act. A transfer of a right to enjoy a property in consideration of a price paid or promised to be rendered periodically or on specified occasions is the basic fabric for a valid lease. The provision says that such a transfer can be made expressly or by implication. Once there is such a transfer of right to enjoy the property, a lease stands created. What is mentioned in the three paragraphs of the first part of Section 107 of the Transfer of Property Act are only the different modes of how leases are created. The first paragraph has been extracted above and it deals with the mode of creating the particular kinds of leases mentioned therein. The third paragraph can be read alongwith the above as it contains a condition to be complied with if the parties choose to create a lease as per a registered instrument mentioned therein. All other leases, if created, necessarily fall within the ambit of the second paragraph.

When lease is a transfer of a right to enjoy the property and such transfer can be made expressly or by implication, the mere fact that an unregistered instrument came into existence would not stand in the way of the court to determine whether there was in fact a lease otherwise than through such deed.

Taking a different view would be contrary to the reality when parties clearly intended to create a lease though the document which they executed had not gone into the process of registration. That lacuna had affected the validity of the document, but what had happened between the parties in respect of the property became a reality. Non-registration of the document had caused only two consequences. One is that no lease exceeding one year was created. Second is that the instrument became useless so far as creation of the lease is concerned. Nonetheless the presumption that a lease not exceeding one year stood created by conduct of parties remains unrebutted.”

Thus, in the absence of registration of a document, what is deemed to be created is a month-to-month tenancy, the termination of which is governed by Section 106 of the Act. Park Street Properties Pvt. Ltd. v. Dipak Kumar Singh, (2016) 9 SCC 268.

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