Rule
S.108 lists the rights and liabilities of the lessor and the lessee. They apply unless the lease or local usage says otherwise.
- Part (A), clauses (a) to (c): the lessor.
- Part (B), clauses (d) to (q): the lessee.
S.111 lists the eight ways a lease ends. Forfeiture (S.111(g)) needs a written notice by the lessor showing his intention to end the lease. Forfeiture can be waived (S.112), and the court can relieve against it in some cases (S.114, S.114A).
Forfeiture ends the lessee's estate before its time. The law makes the lessor act clearly and in writing, and gives the lessee a chance to put things right, so that eviction is never a surprise.
| Provision | What it says |
|---|---|
| S.108(A)(a) to (c) | Lessor: disclose defects, give possession, quiet enjoyment |
| S.108(B)(d) to (q) | Lessee's rights and duties |
| S.111(a) to (h) | Modes of ending a lease |
| S.112 | Waiver of forfeiture |
| S.114 | Relief against forfeiture for non-payment of rent |
| S.114A | Notice to remedy before a suit for forfeiture for other breaches |
Requirements
Valid forfeiture under S.111(g):
| # | Requirement | What to check |
|---|---|---|
| 1 | A ground | Breach of an express condition with a right of re-entry; or the lessee sets up title in a third person or himself; or the lessee is adjudged insolvent and the lease allows re-entry |
| 2 | Written notice by the lessor | Showing his intention to end the lease |
| 3 | S.114A notice, for a breach of an express condition | Notice naming the breach and asking for a remedy if it can be remedied. Not needed for non-payment of rent, or for a condition against assigning or subletting |
| 4 | No waiver | The lessor has not accepted later rent or otherwise treated the lease as continuing, knowing of the forfeiture (S.112) |
Forfeiture is never automatic. Breach only gives the lessor a choice. The lease continues until he gives the written notice.
Lessor's rights and liabilities (S.108(A))
| Clause | Content |
|---|---|
| (a) | Disclose any material defect he knows of, which the lessee does not know and could not find with ordinary care |
| (b) | Put the lessee in possession when asked |
| (c) | If the lessee pays rent and keeps his promises, he may hold the property without interruption (quiet enjoyment) |
| Right | Receive rent, and take the property back when the lease ends |
Lessee's rights and liabilities (S.108(B))
| Clause | Content |
|---|---|
| (d) | Benefit of accessions during the lease |
| (e) | Lease voidable at his option if fire, flood or similar force destroys the property or makes it unfit |
| (f) | If the lessor fails to make repairs he is bound to make, the lessee may make them and deduct the cost from rent |
| (g) | If the lessor fails to pay what he must pay, the lessee may pay it and deduct it |
| (h) | May remove things he attached to the earth, while in possession, leaving the property as he received it |
| (i) | Crops he sowed, when the lease ends by an uncertain event not caused by him |
| (j) | May transfer, mortgage or sublet his interest, unless the lease says otherwise |
| (k) | Disclose facts he knows that materially increase the value of the lessor's interest |
| (l) | Pay the rent at the proper time and place |
| (m) | Keep the property in good condition, fair wear excepted, and allow inspection |
| (n) | Give notice of any encroachment |
| (o) | Use the property as a prudent person would, and only for its purpose. No waste |
| (p) | No permanent structure without the lessor's consent, except for agriculture |
| (q) | Give back possession when the lease ends |
Ending a lease (S.111)
| Clause | Mode | Example |
|---|---|---|
| (a) | Efflux of time | A 3-year lease ends after 3 years |
| (b) | Happening of an event that limits the term | "Until the road is built" |
| (c) | End of the lessor's own interest on an event | Lessor was a life holder and dies |
| (d) | Merger | Lessee buys the lessor's interest in the whole property |
| (e) | Express surrender | Lessee gives up the lease to the lessor by agreement |
| (f) | Implied surrender | Lessee takes a new lease from the lessor during the old one |
| (g) | Forfeiture | Breach of condition, disclaimer of title, insolvency, with written notice |
| (h) | Notice to quit | Notice under S.106 or the lease |
Illustrations
1. Quiet enjoyment
- Facts: A landlord cuts off the electricity to force the tenant to pay higher rent.
- Result: Breach of S.108(A)(c). The tenant can sue for an injunction and damages.
- Why: A tenant who pays rent and keeps his promises may hold without interruption.
2. Fixtures
- Facts: A tenant fixes a split air conditioner to the wall. He also lays new floor tiles.
- Result: He may remove the air conditioner while in possession (S.108(B)(h)). He cannot rip up the tiles if that damages the property.
- Why: He must leave the property in the state he received it.
3. Subletting against the lease
- Facts: The lease bars subletting and gives a right of re-entry. The tenant sublets a room.
- Result: The lessor may forfeit by written notice (S.111(g)). No S.114A notice to remedy is needed.
- Why: S.114A does not apply to a condition against subletting.
4. Breach cured after notice
- Facts: The lease bars commercial use. The tenant runs a tuition centre. The landlord serves an S.114A notice giving 30 days to stop. The tenant stops.
- Result: No forfeiture.
- Why: The breach was remedied within a reasonable time.
5. Disclaimer of title
- Facts: The tenant tells others that he is the owner and the landlord has no title.
- Result: A ground for forfeiture (S.111(g)(2)). The landlord must still give written notice.
- Why: A lessee who denies his lessor's title renounces his character as lessee.
6. Waiver
- Facts: The landlord knows of a breach giving him a right to forfeit, but goes on accepting rent for 6 months without objection.
- Result: Forfeiture for that breach is waived (S.112).
- Why: Accepting rent that fell due after the forfeiture, with knowledge of it, shows he treats the lease as continuing.
Key Cases
Associated Hotels of India v RN Kapoor, AIR 1959 SC 1262
- Facts: Hotel rooms were let to a hairdresser under a document called a licence.
- Held: The transaction was a lease. Substance and intention decide, not the label.
- Principle: Applied when deciding whether S.108 and S.111 apply at all (see Scenario 2).
The rules in S.108 and S.111 are mostly applied on their own words. The case cited in the earlier version was cited for the wrong point and has been removed (see the review report).
Distinctions
| Basis | Forfeiture (S.111(g)) | Surrender (S.111(e), (f)) |
|---|---|---|
| Who acts | Lessor | Lessee with lessor's agreement |
| Cause | Lessee's breach, disclaimer or insolvency | Agreement, or a new lease |
| Consent of lessee | Not needed | Needed |
| Waiver | Possible (S.112) | Not applicable |
| Basis | Notice to quit (S.111(h)) | Forfeiture (S.111(g)) |
|---|---|---|
| Breach needed | No | Yes |
| Who gives notice | Either party | Lessor |
| Notice | S.106 period | Written notice of intention to end |
Exam Scenario
L leases a flat to T for 3 years. The lease has a "no pets" condition with a right of re-entry. T keeps a dog. L learns of it, but accepts rent for 4 more months without objection. He then serves a notice of forfeiture. Advise T.
Approach
- Met: Breach of an express condition with a right of re-entry (S.111(g)(1)).
- Met: L knew of the breach.
- Issue: L accepted rent falling due after he knew. This shows an intention to treat the lease as continuing (S.112).
- Not met (for L): No waiver. The forfeiture for this breach has been waived.
Conclusion: L cannot forfeit the lease for the dog already known and condoned.
Remedy: T can resist eviction. A fresh breach, or damage to the flat (S.108(B)(m), (o)), would give L a new ground.
Scenario 2
Priya lets Raj use Room 5 in her building for his business for 2 years at Rs.15,000 a month. The agreement says Priya may enter the room at any time and may revoke the permission on 7 days' notice. Is it a lease or a licence?
Approach
- Issue: Substance and intention decide (Associated Hotels, 1959).
- Not met: Exclusive possession. Priya keeps a right to enter at any time.
- Not met: Transfer of an interest. The right is revocable at Priya's will on 7 days' notice.
- Issue: A fixed 2-year term and monthly payment point the other way, but are not decisive.
Conclusion: Most likely a licence, not a lease.
Remedy: Priya may revoke on 7 days' notice. Raj can claim any remedy the agreement gives him and, if the revocation breaks the contract, damages, but he cannot insist on S.106 or S.111 protection.
Recall Check
- What are the lessor's three duties under S.108(A)?
- Name the eight modes of ending a lease under S.111.
- What notice is needed before forfeiture, and when does S.114A not apply?
- What amounts to waiver of forfeiture under S.112?
Flashcards
What is the lessor's covenant of quiet enjoyment (S.108(c))?
If the lessee pays the rent and keeps his promises, he may hold the property during the lease without interruption (S.108(A)(c)).
Can a lessee sublet or assign the leasehold?
Yes, under S.108(B)(j), unless the lease says otherwise.
What is "forfeiture" under S.111(g)?
Ending of the lease for breach of an express condition with a right of re-entry, for the lessee setting up title in a third person or himself, or for his insolvency where the lease allows re-entry, in each case on written notice by the lessor.
What must a lessor do BEFORE forfeiting a lease?
Give written notice of his intention to end the lease (S.111(g)). For breach of an express condition, other than non-payment of rent or a bar on assigning or subletting, he must also serve an S.114A notice naming the breach and asking for a remedy.
What constitutes "waiver of forfeiture" under S.112?
Waiver of forfeiture is under S.112, not S.113. With knowledge of the forfeiture, the lessor accepts rent that fell due after it, distrains for rent, or does any other act showing an intention to treat the lease as continuing.
Does forfeiture operate automatically?
No. The lessor must elect to end the lease by written notice. Until then the lease continues.
Does forfeiture of a lease operate automatically on breach?
No. The lessor must elect to end it by written notice of his intention (S.111(g)). Breach alone does not end the lease.