Section 106 of TPA

Source: Delhi High Court 

Why in News? 

Recently, the bench of Justice Prathiba M Singh and Justice Shail Jain  held that a tenant cannot dispute the landlord’s title during tenancy, even when alleging forgery, unless supported by credible evidence. The ruling came while dismissing a tenant’s appeal against eviction, emphasizing that tenants cannot misuse tenancy to delay lawful possession. 

• The Delhi High Court  held this in the matter of Naseem Ahmed v. Deepak Singh (2025). 

What was the Background of  Naseem Ahmed v. Deepak Singh (2025) ? 

• The dispute concerns Shop No. 4 at Village Mirpur Turk, Karawal Nagar, Delhi, where Naseem Ahmed (tenant) was inducted by Smt. Gayatri Devi (landlord's mother) for commercial purposes at Rs. 600 per month, later enhanced to Rs. 780. The tenant claims rent was paid until June 2011, after which the landlord refused acceptance. He tendered Rs. 20,280 arrears via cheque, which was returned un-encashed. The landlord alleges continuous default since 2011 and unauthorised occupation. 
• After Smt. Gayatri Devi's demise, her son Deepak Singh claimed ownership through a Will dated 5th April 2022. He issued a termination notice on 20th January 2024, claiming market rent of Rs. 20,000 per month. 
• The matter travelled through three proceedings: First, an eviction petition (125/2011) was filed under the Delhi Rent Control Act, which was eventually withdrawn in March 2019 as the Act was inapplicable to the suit premises. Second, the landlord filed Civil Suit 127/2024 before the Commercial Civil Judge, but it was returned as the valuation of Rs. 6,20,000 exceeded its pecuniary jurisdiction of Rs. 3,00,000. Third, the landlord instituted Civil Suit 143/2024 before the District Judge (Commercial Court), valuing the suit at Rs. 7,60,130. 
• The Commercial Court allowed the landlord's application under Order XII Rule 6 CPC on 22nd July 2025, granting a decree for possession based on admissions. The tenant appealed, challenging the Commercial Court's pecuniary jurisdiction and disputing the landlord's ownership, alleging the Will was forged. 

What were the Court’s Observations? 

• The Court held that courts are entitled to take judicial notice of rent escalation in metropolitan cities. The tenant himself admitted an adjacent shop was let out at Rs. 7,000 in 2018. Applying moderate escalation, the valuation would far exceed Rs. 3,00,000. The Court observed that the Rs. 20,000 monthly rent adopted by the landlord was reasonable, consistent with prevailing rentals, and not arbitrary. 
• The Court emphasised the doctrine of dominus litis, whereby the plaintiff has the prerogative to value the suit and choose the forum, subject only to the limitation that valuation must not be arbitrary or mala fide. Courts ordinarily respect the plaintiff's valuation unless shown to be capricious. 
• The Court invoked the Doctrine of Estoppel and Approbation and Reprobation, noting the tenant's contradictory stands. Before the Civil Judge, he argued the suit exceeded pecuniary jurisdiction; now he contends valuation is below Rs. 3,00,000. The Court held that the law does not permit a litigant to "blow hot and cold" or "play fast and loose" with the Court. Having urged one position for advantage before one forum, the tenant cannot now assail that very foundation. The landlord cannot be left remediless. 
• The Court held that a decree under Order XII Rule 6 CPC requires three conditions:  
  • (1) landlord-tenant relationship exists;  
  • (2) tenancy not covered under Delhi Rent Control Act; and  
  • (3) tenancy duly terminated. 
• First condition: The tenant admitted induction by the landlord's mother. This stood fulfilled. 
• Second condition: The tenancy was for commercial purposes in Karawal Nagar, an area not notified under the Delhi Rent Control Act. The Court held that the Act's applicability is confined to areas expressly notified. Since Karawal Nagar remains unnotified, the Rent Controller has no authority, and only the Civil/Commercial Court has jurisdiction. 
• Third condition: The Court held that a tenant cannot challenge the landlord's title while continuing in possession. Section 116 of the Indian Evidence Act (now Section 122 of Bharatiya Sakshya Adhiniyam, 2023) embodies the principle of Tenant Estoppel—a tenant is precluded from denying the landlord's title during tenancy. Even where forgery allegations are raised, absence of credible evidence or challenge by other legal heirs negates any triable issue. The Court observed this principle rests on statutory authority and equitable considerations to prevent tenants from misusing tenancy to prolong occupation and frustrate lawful eviction. 
• The Court held the Will forgery allegation was wholly unsubstantiated, as no legal heir challenged it before any competent Court. Without cogent contemporaneous evidence, the Commercial Court was justified in treating the Will as having persuasive evidentiary value. 
• Regarding termination, the Court observed that Section 106 of the Transfer of Property Act provides that commercial leases are terminable by fifteen days' notice. Critically, the Court held that institution of a suit itself constitutes sufficient notice to quit, satisfying Section 106 TPA requirements. Once notice is served or deemed served, the tenancy stands terminated, and the tenant's status reduces to that of an unauthorised occupant. 
• The Court observed that denials in pleadings must be specific and supported by material particulars. Evasive denials or denials for want of knowledge are legally insufficient. The tenant's denials were vague and evasive, which strengthened justification for summary disposal. His assertion of rent payment until 2011 lacked contemporaneous receipts or banking records, raising no triable issue. 
• The Court held that all statutory prerequisites were satisfied, and defences raised were legally barred and untenable. The summary disposal was warranted as the tenant's challenge lacked merit when tenancy stood admitted. The Court dismissed the appeal and directed the tenant to hand over vacant peaceful possession within three months. 

What Does Section 106 of the Transfer of Property Act, 1882, Provide For? 

• Basic Framework 
  • Section 106 of the Transfer of Property Act governs the duration and termination of leases where there is no written contract or local usage specifying different terms. 
• Types of Leases and Notice Requirements 
  • For leases of immovable property used for agricultural and manufacturing purposes, the law presumes a year-to-year tenancy that can be terminated by either the lessor or lessee by giving six months' notice. 
  • For leases of immovable property used for any other purpose including commercial or residential purposes, the law presumes a month-to-month tenancy that can be terminated by either party by giving fifteen days' notice. 
  • The fifteen-day notice for non-agricultural leases must expire with the end of a month of tenancy, meaning it must align with the monthly rental cycle. 
• Notice Period Calculation 
  • The notice period begins to run from the date when the notice is actually received by the other party, not from the date when it was sent or posted. 
  • A notice will not be deemed invalid merely because it mentions a shorter period than statutorily required, provided the suit or proceeding is actually filed after the proper statutory period has elapsed. 
• Form and Service of Notice 
  • Every termination notice must be in writing and must be signed by the person giving it or by someone authorized on their behalf. 
  • The notice may be served by sending it through post to the party who is intended to be bound by it. 
  • Alternatively, the notice may be delivered personally to the concerned party at any location. 
  • If personal delivery is not possible, the notice may be given to one of the party's family members or servants at their residence. 
  • If none of the above methods are practicable, the notice may be affixed to a conspicuous part of the leased property itself. 
• Continuation After Lease Expiry 
  • When a lessee continues to occupy the property after the lease expires and the lessor accepts rent or otherwise consents to the continued possession, the lessee becomes a tenant by holding over and the lease is automatically renewed on the same terms as specified in Section 106. 
  • When a lessee continues to occupy the property after the lease expires without the lessor's consent, the lessee becomes a tenant by sufferance whose possession is wrongful in its continuance though it was lawful at inception. 
• Legal Status of Tenant at Sufferance 
  • A tenant at sufferance is distinguished from a trespasser by the legal fiction that their initial possession was lawful, whereas a trespasser's possession is unlawful from the very beginning. 
  • There exists no landlord-tenant relationship between a lessor and a tenant at sufferance, and therefore no notice under Section 106 is required before filing a suit for eviction against such a person. 
  • A tenancy at sufferance automatically terminates when the landlord demands possession, when the landlord enters the property without notice, or when the tenant voluntarily quits the premises. 
• Institution of Suit as Notice 
  • Courts have consistently held that filing a suit for possession itself constitutes valid notice to quit under Section 106, thereby satisfying the statutory notice requirement. 
  • Once a suit is instituted and summons are served, even if technical objections are raised about the termination notice, the filing of the suit operates as deemed service of notice under Section 106. 
  • After such notice is served or deemed served through institution of the suit, the tenancy stands legally terminated and the tenant's status is reduced to that of an unauthorized occupant with no legal right to continue in possession. 
• Applicability and Exceptions 
  • Section 106 applies only as a default provision in the absence of any written contract, local law, or established local usage that provides for different terms. 
  • If the parties have executed a written lease agreement specifying different notice periods or termination procedures, those contractual terms will prevail over the default provisions of Section 106. 
  • The statute adopts a purpose-based classification recognizing that agricultural and manufacturing leases involve seasonal cycles and longer-term investments requiring six months' notice, while commercial and other leases are more flexible requiring only fifteen days' notice.