Summary: Registering lease deeds removes ambiguity, provides legal certainty, and prevents disputes over implied renewal. This protects both landlords and tenants, reduces litigation and promotes smoother tenancy transitions. This blog explains the legal significance of registration of leases and guides readers on the risks of leaving leases unregistered, empowering them to make informed decisions and avoid unnecessary disputes.
Introduction
Lease deeds are among the most common tenancy documents in India. Short-term leases are especially popular among smaller property owners, because they do not need to be registered under the law, saving both time and money for the property owners. This blog explores the jurisprudence surrounding unregistered lease deeds, highlights the risks faced by property owners, and discusses the judicial remedies available to enforce their rights even without formal registration.
Pitfalls Surrounding Unregistered Lease Deeds
Section 105 of the Transfer of Property Act of 1882 (“TOPA”) defines lease as the transfer of a right to enjoy a property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.[1]
Leases are required to be statutorily registered under the Registration Act of 1908 (Registration Act) if the leasing period is over one year,[2] which is why it is common practice among home and small housing unit owners to lease out their properties for durations lesser than that. While this practice is a way around paying stamp duty, it could result in undesirable litigation surrounding the rights emanating from the lease deed.
Section 49 of the Registration Act[3] clearly states that unregistered documents cannot be enforced into evidence in a court of law, rendering the clauses of an unregistered lease deed as unreliable in court as evidence.[4] The Supreme Court in Food Corporation of India and Ors. Vs. V. K. Traders and Ors.,[5] noted that leases deeds brought on record to be relied upon as evidence were unregistered and, hence, could not be taken as evidence for valid transfer of possession. Hence, the property owners could not get their rights enforced in court under the TOPA, leaving them in a disadvantageous position.
Possible Judicial Remedies
However, an unregistered lease deed can be enforced in the court of law under certain conditions. Section 107 recognises leases made through oral agreements accompanied by delivery of possession of property.[6] In case of Anthony vs. K. C. Ittoop, the Supreme Court held that a jural relationship is said to formed when both sides admit that one was inducted into the possession of a property by paying or having agreed to pay either a yearly or monthly fee. This relationship cannot be construed as anything but that of a lessor and a lessee.[7] The existence of a jural agreement between the parties can be proven by merely admitting material facts and bringing on record the unregistered lease deed.[8] While these unregistered lease deeds alone may not be evidence, they can establish the existence of a lease-like arrangement if tied to an admission of facts. This would imply that a jural relationship was formed, upon which the court can adjudicate on the rights of the parties.
This suggests that jurisprudence surrounding the adjudication of rights emanating from unregistered lease deeds has evolved, especially around the right to evict a tenant upon lease termination. In Shanti Prasad Devi v. Shankar Mahto, the Supreme Court held that acceptation of rent after the expiry of the lease period constitutes a waiver of the termination notice of the lease.[9] The Court also held that the burden of renewal of a lease is on the Lessee, failing which the lease would be terminated under Section 116 of the TOPA.[10]
The Suresh Babu Case: Reviewing The Latest Position Of Law
This interpretation by the Court allows for property owners to exercise their rights over their leased properties more effectively. The culmination of this jurisprudence is seen clearly in the recent decision of the High Court of Karnataka in Suresh Babu C. v. V. Varadarajan and Anr. In this case, the lessor was able to obtain an order of eviction against the tenant on the basis of the existence of a jural relationship.[11] The Respondents had filed a counterclaim, in a suit for permanent injunction against eviction, stating that the lease had been terminated due to non-renewal and that a quit notice had been served. The Appellant acknowledged the existence of a lease deed, thereby confirming the jural relationship of a lessor and a lessee with the Respondents. However, while admitted to receiving the quit notice, the Appellant challenged the Respondents’ ability to bring a counterclaim under Order VIII Rule 6A of the Civil Procedure Code, 1908,[12] in a suit for permanent injunction.
The Court, however, observed that counterclaims were envisioned for the purpose of reducing litigation. It held that in this case, where the title of the property is clear and establishes the lessor’s ownership of the said property, the lessor was well within rights to bring about a counterclaim seeking to exercise the right to evict the tenant upon lease termination. In light to the admissions made, the Court held that the lessor was entitled to evict the lessee and that the permanent injunction would fail as the lease had already been terminated.
Conclusion: Importance and Benefits of Registration
In conclusion, the registration of lease deeds or any tenancy document minimises the ambiguity surrounding the right of parties contained within such deeds. Registered documents offer courts of law and leasing parties a sense of certainty surrounding the terms of the arrangement. It also provides for automatic termination of the lease upon expiry and protects against potential inaction by either party that could lead to the lease persisting beyond what was contemplated. This helps categorically avoid the undesirable consequence of tenants claiming that the lease deed continues by implied consent, despite making no attempt to renew the lease.
While the law has not shut its doors on small-home owners who prefer shorter leases for convenience, it leaves litigation as the only window to enforce their rights, which can be costly, time consuming and riddled with procedural complexities. Registered and enforceable lease deeds will not only act as a legal safeguard but also facilitate instil clarity in the minds of the contracting parties, resulting in quick resolutions, removal of ambiguity, and ensuring smoother transition in tenancy arrangements.
[1] Section 105, Transfer of Property Act, No. 4 of 1882.
[2] Section 17(1)(d), Registration Act, No. 16 of 1908.
[3] Section 49, Registration Act, No. 16 of 1908.
[4] Bajaj Auto Ltd. v. Behari Lal Kohli (1989) 4 SCC 39.
[5] Food Corporation of India and Ors. Vs. V.K. Traders and Ors. (2020) 4 SCC 60.
[6] Section 107, Transfer of Property Act, No. 4 of 1882.
[7] Anthony vs. K.C. Ittoop and Sons and Ors. (2000) 6 SCC 394.
[8] Erappa G. Vs. K.M. Manjunath 2022:KHC:12815.
[9] Shanti Prasad Devi v. Shankar Mahto AIR 2005 SC 2905.
[10] Ibid, Section 116, Transfer of Property Act, No. 4 of 1882.
[11] Suresh Babu C. vs. V. Varadarajan and Ors. (08.07.2025 – KARHC): MANU/KA/2099/2025.
[12] Order VIII, Rule 6A, Civil Procedure Code, No. 5 of 1908.