Lease of immovable
property for a period of less than a year is compulsory registrable unless
concerned State Government notifies otherwise
Transfer of
property act hereinafter referred as TP Act categorically says about lease of
immovable property how made at section 107 which is being reproduced herein
below:
107. Leases how
made. —
A lease of immoveable property from year to year,
or for any term exceeding one year or reserving a yearly rent, can be made only
by a registered instrument.
All other leases of immoveable property may be made
either by a registered instrument or by oral agreement accompanied by delivery
of possession.
Where a lease of immoveable property is made by a
registered instrument, such instrument or, where there are more instruments
than one, each such instrument shall be executed by both the lessor and the
lessee:
Provided that the State Government may from time to
time, by notification in the Official Gazette, direct that leases of immoveable
property, other than leases from year to year, or for any term exceeding one
year, or reserving a yearly rent, or any class of such leases, may be made
by unregistered instrument or by oral agreement without delivery of possession.
With regards to
duration of lease section 106 of TP Act “written contract” in title and
“contract” in the body. Section 4 of TP Act mandates that “the
Chapters and sections of this Act which relate to contracts shall be taken
as part of the Indian Contract Act, 1872 (9 of 1872)”. The terms “contract” has a special
meaning as given in section 10 of the Indian Contract Act under the heading of
what agreements are contracts. As per the said section only those “agreements
are contracts if they are made by the free consent of parties competent to
contract, for a lawful consideration and with a lawful object,
and are not hereby expressly declared to be void. Nothing herein
contained shall affect any law in force in India, and not hereby expressly
repealed, by which any contract is required to be made in writing or in the
presence of witnesses, or any law relating to the registration of documents”.
Any provision of law which intends to stipulate a special feature of to a
contract will not be affected rather that will be considered a unique feature
of that contract. Registration of a documents is a source of revenue for state
government. Hence object of a person; who does not get the document registered
which a law intended to be registered; cannot be said lawful as he wants to
evade to pay revenue for state government. Second proviso of Section 107 of TP
Act by using the terms “all other leases” for Lease of immovable
property for a period of less than a year provides that such lease may be either by a registered instrument or by oral
agreement accompanied by deliver of possession. TP Act by this
provision, in clear terms, intends that leases of immovable property
if not made by an oral agreement accompanied by delivery of possession then
it must be by a registered instrument. Hence any unregistered lease deed
of immovable property for a period of less than a year being without
lawful object will not be recognised by law and such cannot be helpful to
party to such lease
.
Section 4 of TP
Act mandates that “Section 54, paragraphs 2 and 3, Sections 59,
107 and 123 shall be read as supplemental to the Indian Registration Act, 1908
(16 of 1980)”. Section 49 of the Registration Act under heading of
Effect of non-registration of documents required to be
registered mandates “No document required by Section 17 or by any
provision of the Transfer of Property Act, 1882 to be registered shall (a) affect
any immovable property comprised therein…”. These provisions are with
respect to issue of effect of non-registration of a documents needs to be read
together. It is crystal clear that a document to be registered is stipulated in
section 17 of The Registration Act or any provision of the Transfer of Property
Act, 1882. As such section 17 of The Registration Act alone does not provide
exhaustive list of documents to be registered. Only two options have been
provided by second proviso of Section 107 of TP Act section 107 for lease
of immovable property for a period of less than a year i.e.
1) either by a registered instrument or
2)
by oral agreement accompanied by deliver of possession.
As
such leases of immovable property if not made by an oral agreement accompanied
by delivery of possession, it must be by a
registered instrument and not by unregistered instruments unless concerned State
Government notifies otherwise. I have not
came across any such notification whereby it has been directed that direct
that leases of immovable property, other than leases from year to year, or for
any term exceeding one year, or reserving a yearly rent, or any class of
such leases, may be made by unregistered instrument. In absence of such
notification leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any
class of such leases, mandatory be made only by registered instrument.
Now still some
people even some advocate(s) may deny out rightly aforesaid position saying it
is my own explanation as same is against the general prevailing perception.
They emphasis on judicial pronouncements on the issue in hand. Below is
relevant judicial pronouncement on the issue in hand.
The Hon’ble Delhi
High Court in Chemical Sales Agencies vs Smt. Naraini Newar on 17 September,
2004 Equivalent citations: AIR 2005 Delhi 76, 2005
(1) ARBLR 193 Delhi, 114 (2004) DLT 272, 2004 (77) DRJ 224 http://indiankanoon.org/doc/1028412/
“Section 107 of the Transfer of Property
Act, 1882 clearly provides that a lease of immovable property from year to
year, or for any term exceeding one year or reserving a yearly rent, can be
made only by a registered document. It further provides that all other leases
of immovable property must be either by a registered instrument or by oral
agreement accompanied by deliver of possession. Thus, only if there is a
registered instrument or there is an oral agreement accompanied by delivery of
possession can it be said that a relationship of Lesser and lessee is created.
In the present case, I find that there is no registered instrument creating any
such relationship. The purported lease agreement dated 01.05.1992 is not a
registered document. It is not property stamped and by virtue of Section
49 of the Registration Act, 1908, the said document shall not effect any
immovable property nor be received as evidence of any transaction affecting
such property.”
The Hon’ble
Karnataka High Court in Abdul Rasheed S/O Meeran Sab vs Srinivas S/O
Kashinathrao on 16 April, 2014 http://indiankanoon.org/doc/59543538/
answering the
issue of whether a lease deed, where the
term of lease stated therein does not exceed one year, requires to be registered
under the provisions of the Registration Act, 1908 said :
“As could be seen from the above quoted
provisions, all leases not covered by first para of S.107 of the T.P. Act
may be made either by a oral agreement accompanied by delivery of possession,
or by a registered instrument. A lease, the registration whereof is not
compulsory under S.17(1)(d) of the Registration Act, becomes compulsorily
registrable, if reduced into writing in view of second para of S.107 of the T.P.
Act read with para 2 of S.4 thereof. A written unregistered lease of immovable
property, even though the term of lease stated therein does not exceed one
year, is inadmissible in evidence in view of S.49 of the Registration Act, 1908
read with second para of S.107 of the Transfer of Property Act, 1882 &
second para of S.4 thereof. A lease for a period of one year falls within the
expression 'All other leases' stated in para 2 of S.107 of the T.P. Act and may
be made by a oral agreement accompanied by delivery of possession.”