Transfer of Property Act (TPA)
Agricultural Leases under Section 117: Why the Chapter Does Not Apply, and What Governs Instead
The lease chapter was written for urban and commercial tenancies. Agricultural tenancies in India were, and remain, governed by custom, by local usage and by the tenancy and land reform legislation of each State, which pursue objects the Act knows nothing of — security of tenure, ceilings on holdings, conferment of ownership on tillers. Section 117 therefore takes agricultural leases out of the chapter altogether, and leaves it to each State Government to bring back such of the provisions as it thinks fit, by notification, and after six months' notice.
1. The Section
Section 117, TPA 'None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the State Government may by notification published in the Official Gazette declare all or any of such provisions to be so applicable in the case of all or any of such leases, together with, or subject to, those of the local law, if any, for the time being in force. Such notification shall not take effect until the expiry of six months from the date of its publication.' |
2. What the Exemption Covers
Position | |
|---|---|
Which provisions are excluded | The whole of Chapter V — sections 105 to 117 — in its application to leases for agricultural purposes |
Which are not | The general provisions of Chapter II, sections 5 to 53A, are not excluded by section 117; they apply to a transfer of immoveable property generally, subject to the saving in section 2 |
How the exemption is lifted | Only by a notification of the State Government in the Official Gazette, which may apply all or any of the provisions to all or any such leases |
When such a notification operates | Not until the expiry of six months from the date of its publication — a deliberate period of warning, so that existing arrangements may be adjusted |
What the notification may do | Apply the provisions together with, or subject to, the local law then in force, so that the two may be read as a single scheme |
3. What Is a Lease 'for Agricultural Purposes'
- The test is the purpose of the letting, judged at the time the lease was granted and from the terms and surrounding circumstances, and not the description in the deed.
- Cultivation of the soil is the core. Ploughing, sowing, raising and harvesting crops, and operations of that kind are agricultural in the ordinary sense.
- Operations merely carried on upon land are not. A lease of land for a brick kiln, for a factory, for a poultry or dairy business conducted as an industry, or for storage, is not a lease for agricultural purposes merely because the land is rural.
- A mixed purpose is decided by the dominant one, and where the agricultural element is subsidiary the lease falls within the chapter.
- And the question is one of fact, on which the local tenancy legislation may itself supply a definition that governs.
4. What Governs an Agricultural Lease Instead
Source | What it supplies |
|---|---|
State tenancy and land reform legislation | Security of tenure, restrictions on resumption and eviction, regulation of rent, and in many States the conferment of occupancy or ownership rights on the tenant |
Local usage and custom | The incidents of customary tenures, which the Act was careful not to disturb |
The contract between the parties | So far as it is not overridden by the local law |
Chapter II of the Act | The general provisions on transfers of property — conditions, notice, priority, lis pendens, part performance and the rest — which section 117 does not exclude |
Justice, equity and good conscience | Where no statute or usage applies, the courts have applied the principles underlying the lease chapter, not as statute, but as rules of justice and convenience |
5. The Practical Consequences
- Section 106 does not apply, so the six-month notice for a year-to-year agricultural lease comes from the section only where a notification has made it applicable; otherwise the period is fixed by the local law, usage or contract.
- Section 107 does not apply, so the requirement of a registered instrument for an agricultural lease is a matter for the Registration Act and the local law, not for this chapter.
- Section 108 does not apply, so the rights and liabilities of the parties come from the contract, the local law and usage.
- Sections 111 to 116 do not apply, so determination, forfeiture, relief against forfeiture and holding over are governed by the tenancy statute of the State.
- But the exemption is not a vacuum. In most States the tenancy legislation is far more protective of the agricultural tenant than the chapter would have been.
6. Why the Act Was Drafted This Way
The reason behind the exclusion Agricultural tenures were ancient, local and diverse. A uniform code drawn on English lines would have cut across settled customary arrangements across the whole of British India. The objects were different. The lease chapter regulates a bargain between two parties; agricultural tenancy legislation pursues a social object — the protection of the cultivator and the reform of land holding. And land is a State subject. The scheme of section 117, leaving the extension of the chapter to State Governments and subordinating it to the local law, anticipates the constitutional division that came later. Compare section 2, which similarly saves the incidents of contracts and rules of personal law from the operation of the Act. |
7. Related Topics and Provisions
- Leases, Sections 105 to 117 — the chapter from which agricultural leases are excluded
- Lease under the Act and Rent Control Legislation — the parallel displacement in the urban context
- Section 2, TPA — the savings that preserve local law, usage and personal law
- Section 106, TPA — duration and notice, which apply only if a notification so provides
- Application of the Act and Personal Laws — the wider question of what the Act does not touch
- State tenancy and land reform legislation — the law that governs in the Act's place