Section 106 of the Transfer of Property Act 1882 in India governs leases of immovable property in the absence of a contract. It was amended in 2002 to address issues in the courts around the sufficiency of notice periods and determining lease commencement/termination dates. The key changes were increasing the notice period for terminating non-agricultural/manufacturing leases from 15 to 30 days, and clarifying that the notice period must be counted from the date of receipt rather than date of sending. The amendment aimed to reduce disputes around interpreting lease durations under section 106.

1. Lease – Amendment in Section 106 of the Transfer of Property Act 1882

2. Introduction Lease is a Transfer of Enjoyment of Property for a certain period of time by a relationship of contract between lessor & lessee. Consideration being the possession of property on one side & rent on the other. Governed in India by the Transfer of Property Act 1882.

3. Section 106 before amendment In the absence of a contract or local law or usage to the contrary, lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on part of either lessor or lessee, by six months notice expiring with the end of a year of the tenancy ; & a lease of immovable property for any other purpose shall be deemed to be a lease from month to month terminable, on the part of either lessor or lessee, by fifteen days’ notice expiring with the end of a month of tenancy

4. The Issues & Motivations for the amendment (1) The sufficiency of the duration of the notice. Mangilal v Sugan Chand AIR1965SC101 The date of receipt of notice not to be included.

5. (2) Date of commencement & termination of lease period. Dattopant Vs Vithalrao AIR 1975 SC 1111 The 30 th day or the 31 st day ?Dispute between lessor & lessee regarding termination & commencement of lease date.

6. In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year terminable, on the part of a lessor or lessee, by six months’ notice ; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by thirty days’ notice (3) The Uttar Pradesh Amendment Act (Act 24 of 1954) :-

7. Gorakh Lal Vs Maha Prasad Narain Singh AIR 1964 All 260 If notice received after the expiry of lease period, to be read as “maximum 30 days or six months’ notice”.

8. Draft Bill Recommended by 181 st Report of Law Commission of India In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year terminable, on the part of a lessor or lessee, by six months’ notice ; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by sixty days’ notice .

9. Transfer of Property (Amendment) Act 2002 (Act 3 of 2003 106. Duration of certain leases in absence of written contract or local usage.-(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice ; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice . (2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice. (3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in t at sub-section. (4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.

10. Conclusion The amendment should result in less disputes regarding the lease duration under section 106.

11. References (1) Law Commission of India, One Hundred Eighty-first report on amendment to sec. 106 of the Transfer of Property Act, 1882 , D.O.No.6(3)77/2002-LC(LS) (2) D.F.Mulla, Transfer of Property Act ,Lexis Nexis Butterworths,(10th edn.) (3) B.B.Mitra ,Transfer of Property Act, Kamal Law House ,Kolkata,( 18th edn.) (4) Dr.Hari Singh Gour, Transfer of Property Act ,Delhi Law House,Delhi,(11th edn.)