What is meant by lease its parties or sale or consideration and lessor
Lease its parties and consideration: It is a type of transfer of an interest in immovable property. Section 105 of the Transfer of Property Act, 1880 defines a ‘lease’ as follows:-
“A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, expressed or implied, or in perpetuity, in consideration of a price, paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered, periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.”
It was held in Jaswantsinh Mathursinh & Anor v. Ahmedabad Municipal Corpn & Ors (1992) Supp( I ) SCC 5,12 that, “under S. 105 of the Transfer of Property Act, a lease creates a right and an interest in the enjoyment of the demised property and, a tenant or a sub-tenant is entitled to remain in possession thereof, until the lease is duly terminated and eviction tales place in accordance with law.
Thus, a lease is a right, vested in the lessee for a perticular time or in perpetuity, as the case may be, to enjoy the immovable property. As a consideration for the transfer, the lessee is required to pay a lump sum amount or, rent or, both.
How do you distinguish it from “sale”?
A sale is an absolute transfer of property. A lease is a partial or limited transfer of property. In a lease, there is a transfer of the right to enjoy such property. Thus, in case of a lease, there is a separation between ownership and possession.
What could be the duration/period of a lease?
It could be for any fixed period of time or it could be for perpetuity.
What are the parties to the lease known as?
The person who gives the property on lease is called a “Lessor” and the person who takes the lease is called a “Lessee”.
In a lease transaction, what is the consideration the Lessee pays/gives to the Lessor?
The lessee pays/gives to the lessor any price in the form of a premium, or by payment of money periodically or on specified occasions.
Can the ‘consideration’ be other than money?
Yes. It could be a share of crops, service or any other thing of value. It could be rendered at the period, agreed upon or on specific occasions. This price could be even an amount which is an outstanding debt. If consideration is paid as, and by way of rent, monthly, quarterly, six monthly, annually and/or even otherwise or, payable on specified occasions, it is called lease-rent.