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Section 116: Effect of holding over

Transfer of Property Act • Official Statutory Text & Practice Guide

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Act 1882
Section 115 All 137 Sections of Transfer of Property Act Section 117

Legal Commentary & Landmark Judgments: Section 116

Section 116 codifies the doctrine of holding over, establishing that where a lessee remains in possession after determination of the lease and the lessor accepts rent or assents to continuing possession, the lease is renewed from year to year or month to month according to the purpose under Section 106.

  • Holding Over Ingredients: If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession.
  • Statutory Renewal: The lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106.
  • Tenancy by Holding Over vs Sufferance: Tenancy at sufferance (tenant holding without landlord consent) transforms into tenancy by holding over the instant the landlord accepts rent or assents.
  • Requirement of Fresh Notice: Once tenancy by holding over is created, tenant cannot be evicted without serving a fresh statutory notice to quit under Section 106.
Key Landmark Precedents:
  • R.V. Bhupal Prasad v. State of A.P., (1995) 5 SCC 698: The Supreme Court authoritatively analyzed the distinction between tenant at sufferance and tenant holding over under Section 116, holding that acceptance of rent creates a lawful renewed tenancy requiring fresh Section 106 notice.
  • Shanti Prasad Devi v. Shankar Mahto, (2005) 5 SCC 543: The Supreme Court clarified that mere acceptance of rent where the landlord had already expressed an intention to evict does not constitute assent under Section 116; holding over requires bilateral intention to renew.
  • Sevoke Properties Ltd. v. West Bengal State Electricity Distribution Co. Ltd., (2020) 11 SCC 782: Reaffirmed that expiry of a fixed-term lease terminates tenancy, and absent bilateral renewal under Section 116, the tenant's possession is precarious.
Courtroom Practice & Strategic Litigation Guidance:

If your fixed-term commercial lease has expired and the landlord continues accepting regular rent into their bank account without protest, you have acquired a renewed month-to-month tenancy under Section 116 requiring fresh Section 106 notice for eviction.

Section 115 All 137 Sections of Transfer of Property Act Section 117