Is an Unregistered Lease Over 11 Months Valid?

The disputed property was a shed. The senior member of the owner's family put Anthony in possession under a lease deed dated January 4, 1974, which was ostensibly meant to run for five years. The monthly rent was fixed at Rs. 140. Anthony paid that rent until October 1974.

Ownership of the shed then passed to Devaki, a woman of the family, through a partition among the family members. Anthony paid rent to her from then on. She later transferred the shed to K.C. Ittoop and Sons, who filed the eviction suit. The trial court decreed it, holding that Anthony was not a tenant because the lease deed was void for want of registration.

The first appeal went the other way. The District Judge held that, registration or no registration, there was a valid tenancy, so Anthony could be evicted only under the Rent Act. In a second appeal, a single High Court judge set that aside and sent the case back. The District Judge was told to decide "whether, independent of this lease the defendant was in possession as a lessee from month to month." After the remand, the District Judge found that the parties intended to create a lease and that Anthony was a tenant under the Kerala Building (Lease and Rent Control) Act, 1965. The landlord's remedy, he said, was to apply to the Rent Control Court.

K.C. Ittoop and Sons took the matter back to the High Court. A single judge disagreed with the District Judge, held that Anthony had not proved a landlord-tenant relationship independent of the void lease, and passed an eviction decree. Anthony came to the Supreme Court by special leave. A two-judge Bench noticed a conflict of opinion between Benches of equal strength and sent the appeal to a larger Bench of three.

The statutory wall was high. The first paragraph of Section 107 of the Transfer of Property Act, 1882 says a lease from year to year, for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. Section 17(1) of the Registration Act, 1908 makes registration compulsory for the same kinds of lease. Section 49 then says an unregistered document that needed registration cannot affect the immovable property or be received as evidence of the transaction.

Anthony's five-year deed was unregistered, so the Court could not use it to find a five-year lease. The deed went out of consideration "hook, line and sinker." Counsel for the landlord did not even try to rely on the exceptions in the proviso to Section 49.

The real question was whether that ended the inquiry. The judgment says it did not. Section 105 defines a lease as a transfer of a right to enjoy property in return for a price paid or promised, and such a transfer can be made expressly or by implication. The three paragraphs in the first part of Section 107 are, in the Court's words, only the different modes of creating leases. Its second paragraph covers every lease outside the first, and says such leases may be made by registered instrument or by oral agreement accompanied by delivery of possession.

The judgment never uses the phrase "11-month". Its reasoning is about the line at one year. A lease that does not fall within the first paragraph of Section 107 cannot run beyond one year, and the Court presumed exactly that for Anthony.

The Court separated the unusable document from the real relationship. Both sides admitted that the owner put Anthony in possession and that he paid, or had agreed to pay, monthly rent. The Court held that this jural relationship could only be one of lessor and lessee under the second paragraph of Section 107.

The landlord argued that Anthony's possession might simply have been permissive. The Bench refused to accept that:

• The document-only route is closed. Non-registration had only two consequences: no lease exceeding one year was created, and the instrument became useless for creating a lease. The presumption that a lease not exceeding one year was created by the parties' conduct stayed un-rebutted.
• The "void deed means no tenant" route is closed. Under Section 2(6) of the Kerala Act, a tenant is any person by or on whose account rent is payable for a building, and "let" means to demise on lease. Anthony occupied as a tenant and paid rent, so he became a statutory tenant whose eviction could be considered only on an application to the Rent Control Court.

The High Court's decree was set aside. The suit stood dismissed "without prejudice to the right of the respondent to move under the provision of the Rent Act."

• Gather the paper trail first. Collect the lease deed, even if unregistered, along with proof that the owner put the occupant in possession and proof that monthly rent was paid or agreed. Add the chain of ownership. In Anthony's case that meant the partition in favour of Devaki and her later transfer to K.C. Ittoop and Sons. The unregistered deed cannot prove a long lease, but it sits alongside the facts of possession and rent.
• Use the right forum. In Anthony, the occupant was a tenant under the Kerala Building (Lease and Rent Control) Act, 1965. A landlord wanting him out had to apply to the Rent Control Court, because the civil court's jurisdiction was displaced. The Court noted it was not disputed that this follows once the occupant is a lessee.
• Plead conduct, not just the deed. The winning case rested on possession handed over by the owner and rent paid and accepted, which showed a lessor-lessee relationship independent of the unusable deed.
• Avoid the mistake this judgment corrected. Do not argue that a void, unregistered lease deed automatically makes a rent-paying occupant a non-tenant. That argument won in the trial court and the second High Court round, and the Supreme Court rejected it.