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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.
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.
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,
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.