What the Supreme Court said on the requirement of compulsory registration of rent deed of immovable property
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What the Supreme Court said on the requirement of compulsory registration of rent deed of immovable property

Shruti Mahajan

The Supreme Court has said that when a rent deed is silent on the duration of the tenancy, a mere clause for an increase in rent for after one year cannot be construed as the tenancy being yearly in nature requiring mandatory registration of the deed (Siri Chand [deceased] thr Lrs vs Surinder Singh).

The Bench of Justices Ashok Bhushan, MR Shah, and V Ramasubramanian was deciding an appeal against the decision of the Punjab & Haryana High Court in a dispute involving the registration of a rent deed.

The main question before the Court was whether the rent deed in the instant case needed to be mandatorily registered as under Section 17(1)(d) of the Registration Act of 1908.

Examining the requirement under the Section, the Court noted that the provision requires compulsory registration of lease documents for immovable property that are from year to year or for any term exceeding one year or reserves a yearly rent.

In the instant case, however, the rent note presented before the Court was silent on the aspect of duration of the tenancy as regards the shop in question but provided for the rent to be paid every month before the 5th day of each month.

"When a rent deed/lease deed does not provide for a period and when it provides for payment of rent monthly, whether tenancy can be treated from year to year or for any term exceeding one year or reserving a yearly rent?"
The Court on the question before it

One of the 16 clauses in the rent deed in question also provides for an increase in rent by 10 percent after one year has lapsed, the Court noted. But the documents does not specify the period for which it is executed.

"When the lease deed does not mention the period of tenancy, other conditions of the lease/rent deed and intention of the parties has to be gathered to find out the true nature of the lease deed/rent deed."
the Court observed.

The Court noted that merely including the clause of the increase in rent after every year cannot be construed to mean that the tenancy was for a duration exceeding one year. The increase in the rent deed was contingent upon the tenancy going beyond a period of one year, however, the duration still remained unspecified.

Therefore, in the absence of a categorical specification as regards the duration of tenancy the presumption would be that the tenancy in the present case was a monthly one. The Court observed,

"When the clauses of rent note are cumulatively read, the intention of the tenant is more than clear that tenancy was only monthly tenancy, which could have been terminated on default of payment of rent by 5th day of any month or by notice of one month."

The Court thus concluded that the rent note before it was not the kind of a note that required compulsory registration under Section 17(1)(d) of the Registration Act.

Read Judgment:

Siri Chand vs Surinder Singh.pdf
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