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The primary difference between the two forms of tenancy lies in the consent of the landlord. If the tenant stays in possession of the property after the expiry of the lease, with the assent of the landlord, then it is considered a tenancy at will and if the tenant, after the expiry of the lease, stays in possession, against the landlord’s will, then it is called as tenancy at sufferance. Tenancy at Will This form of tenancy usually develops once the period of lease is over but the tenant continues to be in possession of the property by paying monthly rent to the landlord, with the implied assent of the landlord^1. The legal provision that allows for tenancy at will in India is the Clause (1) Section 106 of the Transfer of Property Act, 1882. The clause states that in the absence of a contract, a lease of an immovable property is deemed to be a lease on month-to- month basis and can be terminated by either party by giving a 15 days’ notice. On the expiry of the notice period, the lessor/landlord acquires the right to have the tenant ejected^2. This type of tenancy can usually be ascertained from the agreeable and cooperative conduct of the lessor and lessee with respect to the possession of property and rent. Tenancy at Sufferance Tenancy at sufferance arises from instances where a lessee though originally enters the leased land with lawful title but even does so after the expiry of the lease by efflux of time^3 and against the will of the lessor/landlord. The same has no legality, is a legal fiction and is almost equitable to continuous trespass, once the original period of lease has expired^4. There exists no relationship between the tenant and landlord in tenancy at sufferance. It is irrelevant if the tenant has been paying rent, if the Landlord has not assented to such a lease agreement^5. Tenancy at sufferance can be said to begin from the time the notice to quit is served although it may. Differentiating the Two (^1) Sunil Tyagi and Anu Chowdhry , “India: Consequences of Expiry of Lease” , Mondaq.com, 30th (^) January 2015, https://www.mondaq.com/india/landlord-tenant--leases/370288/consequences-of-expiry-of-lease as assessed on 2/12/ (^2) Vasantkumar Radhakisan Vora vs Board Of Trustees [1991] SC AIR 14 (^3) R.V. Bhupal Prasad vs State Of Andhra Pradesh & Ors. [1996] SC AIR 140 (^4) LiveLaw.com Staff, “A ‘Tenant in sufferance’ Not Entitled To Any Protection Of Rent Act Against SARFAESI Proceedings: Supreme Court”, Live Law, 17th^ August 2021, https://www.livelaw.in/top-stories/supreme-court- tenant-in-sufferance-not-entitled-protection-rent-act-sarfaesi-proceedings-179758 as accessed on 2/12/ (^5) HGorg Staff, “What does a Sufferance Tenancy Mean?”, HG Org. Legal Resources, n.d., https://www.hg.org/legal-articles/what-does-a-sufferance-tenancy-mean-45584 as accessed on 2/12/
A common issue which comes up in cases time and again, is whether the acceptance of rent from a lessee is sufficient to prove the intention of the lessor to renew the lease on a month- to-month basis and classify the equation as a tenancy at will or will it still be tenancy at sufferance. The Supreme Court has made a clear distinction between the two types of tenancy^6 to clear this issue permanently and it has held that landlord’s consent is the sole deciding factor to the same. It has also held in a case that mere acceptance of rent does not imply consent and consequently a tenancy at will because there are often instances where the rent is accepted by the landlord out of lack of any alternative, in cases where the tenants remain in possession despite the expiry period of lease and the real determining factor is the intention of the parties which can be inferred from their actions such as sending of notice to quit etc^7. Doctrine of Clog on Equity of Redemption Any restriction or any clause or provision which is inserted in a mortgage deed with an intent to deprive the mortgagor of his right of redemption of the mortgaged property, on payment or performance of the debt, is considered a Clog on Equity of Redemption (hereinafter, clog on redemption). Any such provision or clause or stipulation is void and unlawful. The doctrine of clog on equity of redemption has its roots in common law precedents founded upon the principles of equity and their application on the right of mortgagor to redeem a mortgaged property (or in civil legal parlance, a right to sue for redemption). The doctrine has been extensively applied in cases where the mortgagee attempts to bar the mortgagor from redeeming his mortgaged property for the past three centuries with the fundamental proposition of law being “Once a mortgage, always a mortgage” a legal maxim infamously pronounced in Case^8 by Lord Nottingham in 1681. In India, the doctrine of Clog on Redemption is embodied in Section 60 of the Transfer of Property Act,1882. The section provides a statutory right to the mortgagor to redeem the mortgaged property, on payment of his debt. The doctrine has seen its development over the years in Indian judicial framework as well, the Supreme Court has time and again elucidated on the doctrine in great detail, especially in the landmark cases of Seth Ganga Dhar v. Shankarlal^9 and Pomal Kanji Govindji Case^10 , inter alia, observing that the right of (^6) Vasantkumar (n 8) (^7) Firm Sardarilal Vlshwanath vs Pritam Singh [1978] AIR 1518 (^8) Harris v. Harris [1681] 1 Vern 33 (^9) Seth Ganga Dhar v. Shankarlal [1958] SC 770 (^10) Pomal Kanji Govindji & Ors vs Vrajlal Karsandas Purohit & Ors [1989] AIR 436
The best course of action for Baburao is to go to court seeking declaration/ cancellation of the transfer deed on the grounds that that the sale/transfer of the second floor was subject to the certain covenants/ conditions, which were breached by the transferee. The reasons for the same are as follows: The transfer deed between Baburao (Transferor) and Ms. Shalini (Transferee), is a conditional agreement consisting of both, positive and negative covenants. In conditional transfers, the transferee promises to do or refrain his/her actions in order to comply with the covenants stipulated in the conveyance agreement, the failure of which is be a legally ground for termination of the transfer document.
When accepted the covenants to the conveyance agreement such as, no parties shall be allowed on the property, property not to be used for commercial purposes and the requirement to install electricity and water connection within two weeks of the deed. Consequently, a party is also said to have had notice of the covenants prior to signing the agreement and has entered into the contract implying her acceptance to all the covenants. The law regarding the breach of such conditions of the agreement, i.e., failure or omission to comply with the covenants is provided under Section 11 (talks about restrictions on interest created or positive covenants) and Section 40 (provides for restrictions on the use of land or negative covenants) of the Transfer of Property Act, 1882. The second paragraph of Section 11 is relevant for Baburao’s case. Section 11’s first paragraph makes all conditions to the enjoyment of the transferee’s property completely void. However, the second paragraph provides for the exception to the general rule and states that conditions restraining the enjoyment of the transferee’s property can be laid and are legally enforceable in cases where the transferor still has properties adjoining or has transferred only one piece of his/her land to the transferee , provided it is for the beneficial enjoyment of the property retained by the Transferor. This is precisely the case in Baburao’s situation. To further substantiate this proposition of law, the landmark case of Tulk v. Moxhay^13 can be relied upon. In the said case, the defendant (Moxhay), despite knowing of the covenant (^13) Tulk v Moxhay [1848] 41 ER 1143
attached to the land (of keeping the land as a “pleasure ground”), wanted to initiate construction on the land. The plaintiff (Tulk) who had first sold the said piece of his land (out of his estate) with the covenant, went to court for an injunction as the surrounding and adjoining properties were owned by him. The Court held that as the defendant had actual notice of the covenant, he was obligated to abide by it (and passed the injunction in favour of the plaintiff). Therefore, it has since been a settled rule of law that restrictive covenants are enforceable in case of their violation, even on subsequent transferee, meaning that Baburao can legally enforce the covenants through mandatory injunctions and cancellation of the transfer deed. Similarly, in the case of Princy v. Jose^14 the appellant (transferor) set certain conditions or covenants which would need to be obligated in case of re-construction of the building which were not abided by the respondent (transferee) against which she went to court. In this case, the Kerala High Court reiterated that as per second part of section 11, the restriction/condition imposed on the enjoyment of property in a particular manner are saved if it is for the beneficial enjoyment of the property retained by Transferee. Section 40 of the Act, lays down the rules regarding the restrictions on the use of land and their enforceability. According to the section where a transferee is under an obligation arising out of or annexed to the ownership of an immovable property, such obligation can be legally enforced against the transferee for the benefit of any third person’s beneficial enjoyment of his immovable property, provided notice of the said obligation is given to the transferee. In the hypothetical case, Baburao’s covenants/conditions were, a) Transferee agreeing to come before 11pm; b) Prohibition of parties on the property; c) Guests to be only allowed pursuant to Transferor’s permission; d) Installation of new electricity and water meter and bill payments by Transferee within two weeks of the completion of transfer. The conditions laid down by the Baburao (Transferor) are for the beneficial use of his adjoining or remaining property per se. The conditions a) , b) and d) can be justified as being beneficial for the enjoyment of the Transferor on the rationale that Baburao’s daughters are currently in class XII and would therefore need an academically conducive environment (^14) Princy v. Jose, [2010] AIR Ker. 1
the formation of Societies itself is a contract. The same was clarified by the Supreme Court in the following landmark case: Zoroastrian Co-operative Housing Society Ltd. V. District Registrar, Co-op. Societies (Urban)^15 Facts: In this case, the housing society had reserved their membership and transfer of property (plots) to Parsis only with the condition that the property can only be sold to Parsis. The petitioner, an owner of the house was intending to sell the plot to a non-Parsi, in response to which the petitioner filed for injunction. Issue of Law: There were primarily two issues of law which came before the Supreme Court:
- If the grounds of Religion are justified under conditions on transfer as given in the Bye-Laws of the Society?
- Whether the conditions enlisted in the bye-laws of the society are to be counted as Absolute Restraint under Section 10 of the Transfer of Property Act. Held: Justification for Religious Grounds for Co-operative Housing Societies The Court opined that the intent behind forming cooperative societies is to preserve and sustain the identity of the society and to carry on the objective behind forming the society. The court also opined that the rationale behind forming such cooperative societies was that it is essential for a society to have a “bond of common habits and common usage… which should strengthen their neighbourly feelings, their loyal adherence to the will of the society” and remarked that such a bond is generally found in tribes, groups based on profession or religious sentiments or any strong commonality of like nature. Therefore, it shall not be illegal for societies of minority communities to make bye-laws which restrict and put (^15) Zoroastrian Co-operative Housing Society Ltd. V. District Registrar, Co-op. Societies (Urban) [2005] 5 SCC 632
conditions on transfer, in the greater interests of the members of the cooperative society, collectively. Whether the Bye Laws act as absolute restraint and are Void: While the case was upheld in favour of the appellant, the Supreme Court ruled in the favour of the Co-operative society. The Apex Court held that the membership of the society is itself a contract to which a person enters into by his/her free will and consequently, any transfer of property in a cooperative society is regulated by the Bye-laws of the society (which are accepted by free consent. It further opined that section 10 concerns only absolute restraints on transfer and that the same should be imposed at the time of transfer of property to the transferee. However, in the said case (and similar to the given hypothetical problem), the transferee inherited the property with the restrictions placed by section 31 of the Act and the bye-laws and it is only because he qualified to become a member that he became a member of the society. It was held that prior consent of the society for transferring the property or membership to a person, he should be eligible to become a member and such a restriction would therefore, not be called as an absolute restraint. Hence, it was not illegal. Additionally, to further substantiate the argument, the Case of Damyanti Naranga v. Union of India & Others 16 can be relied upon wherein the court has stated that the right to form associations guaranteed under the Constitution of India^17 also includes the freedom and a person’s right to form association extends to do the right to be associated with only those whom they admit in the association voluntarily and that any law which allows non-members of the association to enter the association will be in violation of the fundamental mentioned above. Therefore, in light of the aforementioned case laws and the rational reasoning given by the courts on the issue of restrictions of transfer of property of cooperative housing societies, the bye-laws would be considered legally valid partial restraints on transfer of property and Nirvana cannot alienate the property without prior approval (as per clause B) and compliance to the society’s bye laws. (^16) Damyanti Naranga v. Union of India & Others [1971] SC 966 (^17) Art. 19 (1) (c), Constitution of India
