Topic: Section 107. Leases how made

1107. 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.

2[All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

3[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 may4[***] 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.]

COMMENTS

Lease of immoveable property
The legislature intended that a lease of immoveable property for a period of more than one year should be made by a registered deed. But if a lease of immoveable property for a term of more than one year is not made by a registered deed or is made orally, then in such cases the presumption about the duration of lease under section 106 will apply; Punjab National Bank v. Ganga Narain Kapur, AIR 1994 All 221.

Lease not to apply agricultural lease

Principle of section 107 which envisage mode in which lease is to be made do not apply to agricultural lease; Atar Singh v. Jiledar Singh, AIR 2005 MP 157.

Nature of lease

If a lease agreement is neither a registered document nor an oral argeement accompanied by delivery of possession, it cannot create lessor and lessee relationship. Such document shall not effect any immoveable property nor be received as evidence of any transaction affecting such property; Chemical Sales Agencies v. Naraini Newar, AIR 2005 Del 76.

---------------------
1. As to limitation to the territorial operation of section 107, see section 1, supra, section 107 extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).

2. Subs. by Act 6 of 1904, sec. 5, for the original paragraph.

3. Ins. by Act 20 of 1929, sec. 55.

4. The words “with the previous sanction of the Governor General in Council” omitted by the A.O. 1937.