Sub lease of property and stamp duty payable:
A lease may be granted by a person, who himself is a lessee. The second lease is called a sub-lease, under-lease or a derivative lease. When a lessee grants to another person a lease of the property held by himself as a lessee, it becomes a sub-lease. With respect to the second lease, the original lessee becomes the sub-lessor and the one, who is granted the lease, is called the sub-lessee.
In case of a sub-lease, the sub-lessee shall possess all the rights, unless there is a contract, expressing a wish of the parties not to possess the rights of the sub-lessor by the sub-lessee. The sub-lessee can be subjected to all the liabilities of the sub-lessor, provided he elects to do so. But a sub-lessee, by a mere transfer, does not cease to be subject to the liabilities of the original lessee.
Although the lessee himself creates a sub-lease, the lessee may, dishonestly and out of ulterior motives, surrender (expressly or implicitly) the lease and, thereby, impair the sub-lease. Thus, a lessee may, deliberately, harm and jeopardize the sub-lease, especially, after receiving a good amount of premium. Therefore, in order to protect the rights of the sub-lessee, the Transfer of Property Act has made certain provisions. Expressed or implied, the surrender of a lease does not prejudice sub-lease or under-lease of the property or a part of the property thereof. In case of surrender of a lease, the sublease continues to subsist and, in that case, the rent payable by and, the contracts binding on the sub-lessee, shall be, respectively, payable to and, enforceable by the leassor. However, it should be noted that that in the case of forfeiture, it is otherwise. The forfeiture of the lease has the effect of cancelling and the sub-lease. However, such a forfeiture shall not occur if the forfeiture has been fraudulently procured by the leassor or, in any case where a release has been granted against the forefeiture because of non-payment of rent.
What is the Stamp Duty payable on the sub-lease
The Stamp Duty, payable on the sub-lease/under-lease, is to be calculated in the same manner as in the case of a lease.