Section 108 of the Act deals with the liabilities and rights of the lessor and lessee of immovable property. In this article, we shall discuss the rights of lessee.

Section 108: Rights and liabilities of lessor and lessee:

In the absence of a contract or local usage to the contrary, the lessor and the lessee of immoveable property, as against one another, respectively, possess the rights and are subject to the liabilities mentioned in the rules next following, or such of them as are applicable to the property leased:

(A) ………………

(B) Rights and Liabilities of the Lessee

(d) If during the continuance of the lease any accession is made to the property, such accession (subject to the law relating to alluvion for the time being in force) shall be deemed to be comprised in the lease;

(e) if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void: Provided that, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself of the benefit of this provision;

(f) if the lessor neglects to make, within a reasonable time after notice, any repairs which he is bound to make to the property, the lessee may make the same himself, and deduct the expense of such repairs with interest from the rent, or otherwise recover it from the lessor;

(g) if the lessor neglects to make any payment which he is bound to make, and which, if not made by him, is recoverable from the lessee or against the property, the lessee may make such payment himself, and deduct it with interest from the rent, or otherwise recover it from the lessor;

(h) the lessee may 1[even after the determination of the lease] remove, at any time 2[whilst he is in possession of the property leased but not afterwards] all things which he has attached to the earth; provided he leaves the property in the state in which he received it;

(i) when a lease of uncertain duration determines by any means except the fault of the lessee, he or his legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property when the lease determines, and to free ingress and egress to gather and carry them;

(j) the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease; Nothing in this clause shall be deemed to authorise a tenant having an untransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee;

(k) …………. (q)

Rights of Lessee:

• Section 108 (d) lays down that during the period lease is in effect if any alteration is made (alluvion for the time being in force) then that alteration will come under that same lease. This rule would not apply where the parties are governed by their contract or local usage. This clause is also not applicable to agricultural leases (S. 117 of the Act).

In Tabor v. Godfrey, (1895) 64 LJQB 245 case, the Court held that the clause deals with increament when during the currency of the lease the original land is increased by addition to it. According to the clause, in the absence of express stipulation or local usage to the contrary, such additions are deemed to be included in the land originally leased and subject to the same terms of tenancy as the parent land. This rule would not apply where the parties are governed by their contract or local usage.

• Section 108 (e) lays down that if a significant part of the property that has been leased is destroyed wholly or partly by fire, by flood, by war, by the violent acts of the mob or by any other means resulting in its inefficiency of being a benefit for the lessee. If this happens, the lease is voidable at lessee’s option. There is a provision to this section that if the damage is done due to any act of the lessee himself, this remedy will not be available for him.

In Dada Siba Estate v. Raja Dharmdev Chand, AIR 1961 Punj 143 (DB) case, the Court held that under the clause 108(e) the option of continuance of leases remains with the lessee.

In George J. Ovungal v. Peter, AIR 1991 Ker 55 case, the Court held that ton the destruction of leased property, landlord tenant relationship would not automatically terminate and come to an end.

• Section 108 (f) lays down that lessee has the right to deduct any expenses he has made for repairs in the property from the rent if the lessor has failed to in reasonable time after sending notice. This clause would not apply where the parties are governed by their contract or local usage. This clause is also not applicable to agricultural leases (S. 117 of the Act).

In Home School NO. 16, 17, & 18 v. M. Shafi Ul Huq, 2002 AIHC 753 (754) case, the Court held that to effe4ct repairs, the tenant is expected to give notice to the landlord.

In Pritam Prakash Davar & Sons HUF v. Krisan Kumar Bhasin, 2009 (158) DLT 662 case the Court held that where landlord neglects to effect repairs in a reasonable time, the tenant has right to effect the repairs and recover costs from the landlord.

In V. G. K. Design & Development Engineering Pvt. Ltd. v. H. N. Narayana Reddy, AIR 2008 (NOC) 739 (Kar) case, the Court held that where the tenant has not given notice to the lessor and obtained his implied or express consent he would not be entitled to recover the expenses incurred by him in carrying out the repairs in tenanted premises.

• Section 108 (g) lays down that lessee has a right to recover any such payment which a lessor is bound to make by can deducting it from the interest of the rent or directly from the lessor. He has this right when the lessor has neglected to make that required payment. This clause would not apply where the parties are governed by their contract or local usage. This clause is also not applicable to agricultural leases (S. 117 of the Act).

In Shakuntala Devi Darak v. Transport Corporatiuon of India Ltd., 2011 (6) ALT 47 (A.P.) case, the Court held that Section 108(g) is only subject to any agreement between the landlady/landlord and tenant.

• Section 108 (h) lays down that lessee has a right to detach all things that he may have attached in the property or earth. His only obligation is that he has to leave the property in the same condition as he received it. He can remove the things attached to the earth at any time whilst he is in possession but not afterwards. This clause would not apply where the parties are governed by their contract or local usage. This clause is applicable to agricultural leases (S. 117 of the Act).

In Narayan Das v. Jatindranath, AIR 1927 PC 135 case, the Court held that there may be separation of the ownership of the buildings from the ownership of the land, and there is no rule of law that whatever affixed or built on the soil becomes part of it and is subjected to the same rights of property as the soil itself.

In Kakalpudi Rangaraju v. Happavaluri Sitaramaya, AIR 1955 AP 62 case, the Court held that the trees of spontaneous growth on the land belong to the owner; the lessee cannot remove or cut such trees. The lessee can remove only such trees as have been planted by him after the leases.

• Section 108 (i) lays down that when a lease is of unspecified duration in the lease agreement, lessee or his legal representative have a right to collect all the profits or benefits from the crops which were sown by the lessee at that property. They also have a right of free ingress and egress from such property even if the lease ends. The provisions of this clause do not apply when such a lease determines by fault of the lessee. This clause is not applicable to agricultural leases (S. 117 of the Act).

• Meaning of ingress and egress: The tenant and his servants are given right to enter upon the leases after the termination of the leases to gather and carry the crops. The tenant cannot claim to retain possession until the crops are cut. Thus by this clause pass and repass for the carts carrying crops is allowed.

• Section 108 (j) lays down that lessee has a right to transfer absolutely the property or any part of his interest in that property by sub-leasing or through mortgaging. Lessee is not independent of the terms and conditions mentioned in the lease agreement.

In Maa Durga Enterprises v. State of Bihar, 2009 (74) AIC 432 (345) (Pat) case, the Court held that under Section 108 (j), a lessee has been given right to sublease whole or any part of his interest in his property with further right to transferring it upon the sub-lease.

Veeran Devi v. Lt. Governor, Delhi AIR 1982 Del 470 (473) (FB) case, the Court held that where lessee assigns the rights adjuncted to lease, to a third person, the provisions of Section 18 (j) may apply subject to a contract to contrary.

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The primary aim of laying down the rights and duties of the seller and the buyer in the case of sale is to ensure fair dealings, and as far as possible, to minimize fraud and waste of the property. In this article, we shall discuss the liabilities of seller.

Liabilities of Seller Before Completion of Sale:

Liability to Reveal Fault or Material Defects:

Section 55 Clause (1) Subclause (a) lays down that the seller is bound to disclose to the buyer any material defect in the property or in the seller’s title thereto of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover.

An omission to make such disclosure amounts to fraud. The defects in the title include encumbrance or charge on the property, the existence of an easement, and restrictive covenants, etc. The defects in property may include a right of way and existence of nuisance in the neighbourhood.

In Flight v. Booth (1834) 1 Bing NC 370 the Court opined that it is necessary that the defect should be a material defect about which a buyer had known he would have not purchased that property.

In Ganpat Ranglal v. Mangilal Hiralal, AIR 1962 MP 144 case, the Court held that the seller is not bound to disclose such faults which are really known by the buyer or otherwise he is in the know of the information. Court further opined that to attract the provisions of Section 55(1)(a) two conditions are necessary: firstly, that the buyer should not be aware of the existence of the defect in the title; and, secondly, that he could not with ordinary care discover the defect. So far as the first condition is concerned, although the applicant vendor in his written statement pleaded that the buyer was aware of the existence of the mortgage, there is no proof of this fact and it must be assumed that the buyer was not aware of the defect. However, the second condition is not satisfied inasmuch as the buyer could have known about the encumbrance by making inquiries in the office of the Registrar. Section 55(1)(a) of the Transfer of Property Act has, therefore, no application to the present case.

In RL Pinto v FF Menezes AIR 2001 Kant 141 case, the Court held that the primary duty of the seller is to convey a good title to the buyer and therefore, he is bound to disclose a defect in the title if any.

In Ratanlal v Nanabhai AIR 1926 Bom 175 case, the Court held that the onus of showing a failure to disclose a defect in the title is on the buyer.

To Produce Title-Deeds for Inspection::

Section 55 Clause (1) Subclause (b) lays down that the seller is bound to produce to the buyer on his request for examination all documents of title relating to the property which are in the seller’s possession or power.

The seller is bound to produce all the documents demanded by the buyer for his examination. Buyer can ask for documents for his protection. The documents can be examined at the seller’s place or at the buyer’s place. If the buyer does not demand such documents for examination, the seller is in no obligation to show it to the buyer. If the documents are not examined by the buyer, then the Court presumes that the buyer is satisfied with the title of the property. If the buyer does not inspect title deeds, he would be fixed with the constructive notice of any defect in the seller’s power of transfer if it is found later on.

In Mathuri Bawa v. Prafulla Routray, AIR 2003 Ori 136 case, the Court held that It is no longer res integra that existence of a joint family does not raise a presumption that it owned properties jointly. Once there has been an admission with regard to the division of property no presumption of jointness shall thereafter arise.  Mere entry in the record of right showing names of predecessors-in-intent of vendor and vendee will not be conclusive to draw a conclusion that suit property was joint family property, the vendee will derive indefeasible right by virtue of sale-deed from the vendor.

To Answer Questions as to Title:

Section 55 Clause (1) Subclause (c) lays down that the seller is bound to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto.

As the buyer is acquiring the ownership from the seller, the buyer in his interest must get completely satisfied about ownership rights of the seller and his capacity to transfer the property. In such case only examining the documentation by the buyer is not sufficient. He may have some doubts, he is supposed to ask them to the seller and the seller is bound to answer all these questions related to the property.

In the case of Laxmidas & Company v. D.J. Tata case it has been held by the Mumbai high court that if the seller does not answer for such questions then the contract may be rescinded by the buyer.

To Execute Proper Conveyance:

Section 55 Clause (1) Subclause (d) lays down that it is duty of seller that on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place.

This is done by the signing of the sale deed or putting a thumb impression on the sale deed by the seller. The subclause shows that the duties of the seller and buyer are reciprocal. The buyer should make payment and the seller should execute the conveyance. The Subclause says it should be done at proper place and at the proper time. The Subclause does not clarify what is meant by proper place and at the proper time. It is presumed that it can be decided by mutual agreement between the buyer and the seller.

In Jamshed v. Burjorji, AIR 1934 Bom 1 case, the Court held that the conveyance must be within a reasonable time after tender of price. In case there is no stipulation of fixing the type of execution of the conveyance and seller makes unreasonable delay in executing conveyance, the proper course is to give the notice to make time as the essence of the contract.

To Take Care of Property and Title Deeds:

Section 55 Clause (1) Subclause (e) says that it is duty of seller that between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents.

Between the date of the contract of sale and date of actual delivery of property, the property remains with the seller. Since the seller has already executed a conveyance in the name of the buyer, the seller holds the property as the trustee of the buyer. During this period the seller has to take care of the property and all the relevant documents related to property. If the seller fails to protect them, he will have to compensate the buyer for the loss.

To Pay Outgoings (Public Charges and Rent Accrued):

Section 55 Clause (1) Subclause (g) says that the seller is bound to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing.

This clause clarifies that before the completion of the sale, the seller has to pay all outgoings on the property like rent, revenue, taxes, etc. up to the date of the sale. Unless there is the contrary intention, the seller must discharge all the encumbrances, if there are any on the property. The buyer has a right to require the seller to produce evidence that the property is free from all encumbrances. This liability of seller continues before the completion of the sale and even after completion of the sale.

In Nathu Khan v. Buxto Nath, AIR 1922 PC 176 case, the Court held that where the seller does not pay the outgoings and the buyer subsequently pays them, then the buyer becomes entitled to reimbursement by the seller.

Liabilities of Seller After Completion of Sale:

To Give Possession of Property:

Section 55 Clause (f) Subclause (f) lays down that the seller is bound to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits.

The seller is supposed to give the possession of the property to the buyer or to his authorized agent whenever the buyer requires. The actual delivery of property depends on the nature of the property. In the case of tangible immovable property, physical control is to be given to the buyer. While in case of intangible movable properties the delivery of possession is symbolic. Actual possession is not possible in the case of incorporeal rights such as a right to a fishery, a right of way, etc. The possession should be given after transfer of ownership to the buyer at the date of execution of the sale deed if there is no contract to the contrary.

Implied Covenant for Title:

Section 55Clause (2) lays down that the seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same: Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is encumbered or whereby he is hindered from transferring it. The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.

A covenant is a legal agreement between two or more parties. It is normal practice for the seller to provide covenants for title, in standard form, by selling with “full” or “limited” title guarantee, in accordance with the Law of Property (Miscellaneous Provisions) Act 1994. The effect of this wording is that, following completion, the buyer can sue the seller for breach of the title guarantee. The seller will normally sell the property with full title guarantee unless the seller is a trustee, personal representative or mortgagee, in which case he will normally sell the property with limited title guarantee.

In Raghunathan v. Chellammal,  94 LW 755 and B. Kutpuddin vs Zuleika Bibi (1997) IMLJ 15 cases, the Courts held that Section 55(2) of the Act makes it clear that the benefit of covenant for the title runs with the land and is enforceable by the subsequent purchasers of the land and if the buyer resells to several purchasers, each of the purchasers is entitled to sue on the covenant in respect of his part.

In N.Narasingarayadu v. N. Ankineedu, AIR 1962 A.P. 192 case the Court held that under Section 55(2), every sale for consideration carries with it a covenant for the title.

In Tavvala Veerabhadra Rao v. Bonam Venugopala Rao, 1997 (4) ALT 713 case, there was a warranty of title Under Section 55(2) of the Transfer of Property Act.

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