Once A Lease Commences Under Transfer Of Property Act, It Cannot Automatically Transform Into Tenancy Under Rent Control Act Upon Expiry: Calcutta High Court

"Once a lease commences under the Transfer of Property Act, it cannot automatically change its character and partake the nature of a tenancy under the Rent Control Act, merely because such Rent Control Act came into force, unless specifically provided therein." Calcutta High Court, in a significant ruling, held that a long-term registered lease governed by the Transfer of Property Act, 1882, which expired by efflux of time, cannot automatically transform into a statutory tenancy under the West Bengal Premises Tenancy Act, 1997.

A division bench comprising Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya observed that accrued substantive rights under old statutes cannot be taken away retrospectively without express legislative intent.

The case arose from a first appeal preferred by a lessee challenging a trial court judgment and decree that ordered eviction upon the expiry of a lease and granted a preliminary decree for mesne profits. The original lease deed was executed in July 1905 for a period of 35 years and subsequently extended by another registered deed in December 1907 for 65 years, ending on July 31, 2005. The lessor instituted an eviction suit in 2006 under the provisions of the Transfer of Property Act, 1882.

The primary question before the court was whether the jural relationship between the parties constituted a lease governed by the Transfer of Property Act, 1882, or a tenancy coming within the purview of the West Bengal Premises Tenancy Act, 1997. The court was also called upon to determine the effect of the 2002 Amendment to Section 3(c) of the 1997 Act on pre-existing registered leases.

Court Rejects Automatic Inclusion

The court observed that the absence of a specific exemption in respect of a particular class of leases does not automatically imply their inclusion in the 1997 statute. Such inclusion must be specifically and expressly provided for by the legislature.

"Absence Of Specific Exemption Does Not Imply Statutory Inclusion"

The bench noted that to ascertain the governing statute before the promulgation of the 1997 Act, one must look at the point of time when the jural relationship was entered into. The statute prevalent at that juncture determines the governing law between the parties, as held in Rajesh Mitra alias Rajesh Kumar Mitra v. Karnani Properties Ltd.

Accrued Rights Cannot Be Taken Away

The judges emphasized that accrued substantive rights cannot be retrospectively taken away by a subsequent piece of legislation unless it specifically provides so. The 1997 Act contains no express provision to bring historical registered lease deeds previously governed by the Transfer of Property Act within its fold.

"Substantive Rights Under Old Statutes Remain Protected"

Relying on precedents such as Prakashwati Chopra v. Sibaji Mitra and Charu Diesels LLP v. E.L. Properties (P) Ltd., the bench reiterated that a lessee whose lease expires by efflux of time and who continues in possession becomes a tenant-at-sufferance. Such a person does not automatically fall within the definition of a "tenant" under Section 2(g) of the 1997 Act.

Statutory Expiry And Vacant Possession

The court underscored that under Section 111(a) of the Transfer of Property Act, a lease determines by efflux of the time limited thereby. Under Section 108(B)(q), the lessee is bound to put the lessor into possession upon determination, a mandate that took full effect when the lease expired on July 31, 2005.

"Efflux Of Time Denuds Legality Of Possession"

The bench dismissed the appeal and affirmed the trial court's judgment and decree for eviction and mesne profits. However, taking note of the pendency of the appeal, the court granted the appellant a final period of three months to peacefully vacate and deliver vacant possession to the respondents.

Date of Decision: 05 August 2026