Forfeiture of Leases under Section 111(g) of the Transfer of Property Act, 1882: Statutory Text and Judicial Exposition

Forfeiture of Leases under Section 111(g) of the Transfer of Property Act, 1882: Statutory Text and Judicial Exposition

Introduction

Section 111(g) of the Transfer of Property Act, 1882 (“TPA”) prescribes forfeiture as one of the modes by which a lease of immovable property is determined. Although apparently succinct, the clause operates at the intersection of contract, property and statutory regulation, generating a rich body of jurisprudence. This article critically analyses the constituent elements of forfeiture, the mandatory requirement of notice, and the remedial architecture that tempers its rigour, with particular reference to leading decisions of the Supreme Court and High Courts of India.

Statutory Framework

Section 111(g) declares that a lease determines “by forfeiture” in three eventualities: (i) breach of an express condition enabling re-entry; (ii) the lessee’s renunciation of his character by denying the lessor’s title or setting up a hostile title; and (iii) adjudication of the lessee as an insolvent when the lease so stipulates. A valid forfeiture is completed only when the lessor “gives notice in writing to the lessee of his intention to determine the lease”. The clause is textually linked to Section 112 (waiver), Section 114 (relief against forfeiture for non-payment of rent) and is reinforced by the estoppel in Section 116 of the Indian Evidence Act, 1872.

Conceptual Anatomy of Section 111(g)

Breach of an Express Condition

An express covenant permitting re-entry is a jurisdictional fact. In State of U.P. v. Lalji Tandon[1] the Supreme Court confirmed that while renewal covenants are enforceable, breach of accompanying conditions (e.g., failure to execute a fresh deed) can trigger forfeiture, subject to compliance with the notice requirement. Similarly, in Hindustan Petroleum Corp. Ltd. v. Dolly Das[2] the Court upheld the lessor’s right to seek possession after the stipulated renewal period expired, emphasising that statutory amalgamation does not expand contractual renewal rights. Both decisions underscore that contractual autonomy governs, yet statutory formality (notice) conditions its exercise.

Renunciation and Denial of Title

The second limb operates ipso facto upon a tenant’s repudiation of the landlord’s title. Classic authority is Namdeo Lokman Lodhi v. Narmadabai[3] where the Supreme Court held that even pre-TPA leases attract the statutory notice requirement when forfeiture is claimed for non-payment. High Court jurisprudence elaborates the contours:

  • Harold William v. Xth ADJ, Bareilly[4] – mere inquiry into derivative title does not constitute renunciation; a clear, unequivocal denial is required.
  • Ab. Rashid Mir v. Ahmad Ullah Mir[5] – pleading adverse possession amounts to renunciation and attracts forfeiture.
  • Bhargavakula Nainargal Sangam v. Arunachala Udayar[6] – where the relationship of lessor–lessee is itself disputed from inception, Section 111(g) is inapplicable.

Insolvency of the Lessee

The insolvency ground is comparatively rare in modern litigation. The principle, however, informs corporate lease cases where winding-up or amalgamation is involved, as illustrated in Hindustan Petroleum[2].

The Mandatory Notice Requirement

The concluding limb of Section 111(g) renders a notice of intention to determine indispensable. The Bombay High Court in Zulqarnain Saifi v. Dhirajlal Sangani[7] reiterated that while “termination” need not be expressed in talismanic words, the notice must unmistakably convey an intention to determine the lease. Earlier, the Gujarat High Court in Keshavlal Virchand v. Bai Ajawali[8] held that even where grounds under rent-control statutes exist, the landlord must still serve a notice conforming to Section 111(g) and Section 106.

Interaction with Rent Control Legislation

The celebrated seven-judge ruling in V. Dhanapal Chettiar v. Yesodai Ammal held that where eviction is sought exclusively under a State Rent Act, a Section 106 notice is unnecessary. However, when forfeiture under Section 111(g) is pleaded as an independent ground, the statutory notice remains obligatory, a position preserved by subsequent High Court decisions such as Yashpal Lala Shiv Narain v. Allatala Waqf[9].

Relief Against Forfeiture

Sections 112 and 114 constitute equitable correctives. Deposit of arrears before eviction proceedings can waive forfeiture (Sabir Hussain v. Allahtala Waqf[10]). Conversely, where the lease deed itself omits a forfeiture clause, relief is unavailable (Yashpal[9]). The jurisprudence demonstrates judicial preference for sustaining tenancies where possible, aligning with the policy that forfeiture is “a weapon of a very oppressive character and should be kept strictly within the limits for which the legislature intended” (Namdeo Lokman[3]).

Forfeiture vis-à-vis Assignment and Apportionment

Where the lessor transfers a fractional reversionary interest, Section 109 governs, not 111(g). The Madhya Pradesh High Court in Sardarilal v. Narayanlal[11] clarified that an assignee of part of the reversion cannot singly determine the lease unless rent is legally apportioned, echoing English law developments post-1925 but not statutorily incorporated in India.

Procedural Dimensions: Writ Jurisdiction, Laches and Public Premises

In governmental leases, public law remedies intersect with private law rights. In Hindustan Petroleum[2] the Supreme Court entertained a writ to adjudicate renewal rights but curtailed laches-based objections, whereas Aggarwal & Modi Enterprises v. NDMC[12] affirmed that municipal authorities must act in conformity with current statutes, public auction being mandatory, thereby limiting tenants’ expectations of renewal.

Relationship with the Concept of “Transfer”

Forfeiture is a mode of determination of a lease, not a “transfer of property” in the sense employed in tax statutes (Jagatram Ahuja v. C.G.T.[13]). The contrast is instructive: while Section 2(xxiv) of the Gift-tax Act deems creation of a lease to be a transfer, Section 111(g) addresses its extinction. The Supreme Court’s observations in Vasudev Ramchandra Shelat v. Pranlal Thakar[14] on the divisibility of property rights further illustrate that estates in land may be “split” both at creation and at termination, reinforcing the doctrinal symmetry.

Policy Considerations

Indian courts oscillate between enforcing contractual discipline and mitigating the harsh consequences of forfeiture. The trend, visible in rent-control as well as public-premise cases, favours substantive justice over technical default, provided statutory pre-conditions (notice, opportunity to remedy) are satisfied. This equilibrium aligns with comparative common-law experience, yet Indian law retains distinctive features—statutory relief (S. 114), codified waiver (S. 112) and the super-imposed fabric of rent legislation.

Conclusion

Section 111(g) continues to be a potent instrument in the hands of lessors, but its deployment is hedged by rigorous procedural and equitable safeguards. The leading authorities discussed herein demonstrate: (i) strict insistence on an express forfeiture clause or unequivocal renunciation; (ii) indispensability of a written notice of intention; (iii) judicial willingness to grant relief where equity so demands; and (iv) the continued relevance of forfeiture even within specialised statutory regimes. Future controversies are likely to focus on digital service of notices, interaction with insolvency proceedings, and the balance between public-interest tenancies and private rights. Nevertheless, the doctrinal architecture erected by Section 111(g) and refined by the courts provides a resilient framework capable of accommodating such developments.

Footnotes

  1. State of U.P. & Ors. v. Lalji Tandon, (2004) 1 SCC 1.
  2. Hindustan Petroleum Corp. Ltd. v. Dolly Das, (1999) 4 SCC 450.
  3. Namdeo Lokman Lodhi v. Narmadabai, AIR 1953 SC 228.
  4. Harold William v. Xth Addl. DJ, Bareilly, 2003 SCC OnLine All 1136.
  5. Ab. Rashid Mir v. Ahmad Ullah Mir, 2012 SCC OnLine J&K 111.
  6. Bhargavakula Nainargal Sangam v. Arunachala Udayar, 1989 SCC OnLine Mad 265.
  7. Zulqarnain Saifi v. Dhirajlal Sangani, 2010 SCC OnLine Bom 769.
  8. Keshavlal Virchand v. Bai Ajawali, AIR 1953 Sau 113.
  9. Yashpal Lala Shiv Narain v. Allatala Waqf, 2005 SCC OnLine All 1372.
  10. Sabir Hussain v. Allahtala Waqf, 2003 SCC OnLine All 1634.
  11. Sardarilal v. Narayanlal, AIR 1980 MP 17.
  12. Aggarwal & Modi Enterprises v. NDMC, 2005 SCC OnLine Del 898.
  13. Jagatram Ahuja v. Commissioner of Gift-Tax, (2000) SC (unreported).
  14. Vasudev Ramchandra Shelat v. Pranlal Thakar, (1974) 2 SCC 323.