Contingent Clause In Rent Deed To Increase Rent Each Year Cannot Be Read To Mean That Tenancy Was For More Than One Year Period - Synopsis
Nilanjana Ganguly 30 Jun 2020

The Supreme Court noted that, simply because the Rent Deed contains a clause that binds the tenant to increase the rent by a certain percentage each year, it can not be read to mean that the rent was for a period of more than one year.

 In this case, the question before the Apex Court was whether the rent note signed by the tenant required compulsory registration under Section 17(1)(d) of the Registration Act, 1908? The Court noted that, pursuant to Section 17(1)(d) of the Registration Act, leases of immovable property from year to year or for any period of more than one year or the reservation of an annual rent are subject to compulsory registration.

The rent deed in question does not reserve an annual rent, and there is no mention in the rent deed that it is a lease from year to year. However, there is a clause (9) which provides that the tenant is bound to make rent money by increasing 10 per cent each year.

The Court said “Clause (9) may or may not operate in view of specific clauses reserving right of landlord to evict the tenant on committing default of non-payment of rent by 5th of every month or when landlord requires shop by giving one month's notice.”

The Court therefore concluded that the leasing note was not such a type of leasing note, which requires compulsory registration under Section 17(1)(d) of the Act.


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