Holding Over and Tenancy by Sufferance

Section 116 of the Transfer of Property Act, 1882 resolves a recurring conveyancing puzzle: a lease has determined, but the lessee remains. Is the relationship of landlord and tenant continuing, has a fresh tenancy sprung up, or is the occupant now a wrongdoer? The answer depends on a single fact — the consent of the lessor. If the lessor accepts rent or otherwise assents to the continued possession, the lease is renewed from year to year or month to month under Section 116, and the tenant is said to be holding over. If the lessor does not assent, the occupier is a tenant at sufferance, a phrase that English law preserves only as a fiction to distinguish a possession rightful in its inception from a trespass wrongful from the start.

The distinction is small in language but vast in consequence. A tenant holding over is entitled to a notice to quit under Section 106; a tenant by sufferance is not. A tenant holding over assigns and mortgages his interest like any other tenant; a tenant by sufferance has no estate to assign. Section 116 is therefore the bridge between two utterly different jural positions, and the cases turn almost entirely on what was sufficient to amount to assent.

Statutory anchor — Section 116 TPA

The section sits within the leases chapter of the TPA. It assumes that the lease has first been determined by one of the modes of termination listed in Section 111 — most commonly by efflux of time under clause (a) or by notice to quit under clause (h). Until the original lease is at an end, there is nothing to hold over from. As the Supreme Court put it in Karnani Industrial Bank v Province of Bengal AIR 1951 SC 285, there can be no question of the lessee "continuing in possession" until the lease has expired.

Two pre-conditions for the section to apply

A reading of Section 116 yields two cumulative requirements, restated by the Delhi High Court in M R Sahni v Doris Randhawa AIR 2008 Del 110:

1. The lessee or under-lessee must remain in possession after the termination of the lease.
2. The lessor or his representative must accept rent from him, or otherwise assent to his continuing in possession.

The use of the word "otherwise" is significant. Acceptance of rent is treated by the section as one specific form of assent; conduct short of accepting rent — a demand for rent, a fresh negotiation, a recital in correspondence — may equally evidence assent. What the section requires, the Supreme Court reiterated in Bhawanji Lakhamshi v Himatlal Jamnadas Dani AIR 1972 SC 819, is a bilateral arrangement: an offer of a fresh demise evidenced by the lessee's continuing occupation, and a definite consent on the lessor's side, expressed by accepting rent or otherwise.

Holding over distinguished from tenancy by sufferance

The distinction between holding over and tenancy by sufferance is the single most examined point under Section 116. A tenant continuing in possession with the consent of the landlord is a tenant holding over (or tenant at will, in older terminology); a tenant continuing in possession without that consent is a tenant by sufferance. The two streams differ on every material incident.

A tenancy at sufferance, the Calcutta High Court explained in Mozam Shaikh v Ananda Prasad AIR 1942 Cal 341, is merely a fiction to prevent the continuance of possession from operating as a trespass. It cannot be created by contract. It arises only by the implication of law where a person who came into possession under a lawful title continues after that title has been determined, without the consent of the person entitled. The English foundation lies in Doe d Knight v Smythe (1815) 4 M&S 347, but the doctrine is reproduced unchanged in Indian decisions because the TPA, though comprehensive, is not exhaustive on this point.

The contrast was crisply put by the Allahabad High Court in Kundan Lal v Deepchand AIR 1933 All 756: if a tenant remains in possession after the determination of the lease without the landlord's consent, the common-law rule is that he is a tenant on sufferance. If the landlord assents, he is a tenant holding over and falls within Section 116. The Supreme Court in R V Bhupal Prasad v State of Andhra Pradesh (1995) 5 SCC 698 carried the point further: a tenant at sufferance has no estate or interest in the property; his possession is merely tolerated; he can be evicted without notice and is liable for mesne profits.

Comparative table

• Origin. Holding over arises by an implied bilateral contract under Section 116; tenancy by sufferance arises by operation of law and cannot be created by contract.
• Consent. Holding over requires the lessor's assent; sufferance presupposes its absence.
• Privity. Holding over creates a fresh landlord-tenant relationship; sufferance creates none — there is no privity of contract or estate.
• Notice to quit. A tenant holding over is entitled to notice under Section 106; a tenant at sufferance is not.
• Mesne profits. A tenant holding over pays rent; a tenant at sufferance is liable for mesne profits as if he were a trespasser.
• Transferability. A holding-over tenant has an assignable interest; a tenant at sufferance has nothing to assign.

What amounts to "assent" under Section 116

Because assent is the load-bearing element, the cases focus almost entirely on its proof. The general rule was stated by the Supreme Court in Bhawanji Lakhamshi (supra) and reaffirmed in Kewal Chand Mimani v S K Sen AIR 2001 SC 2569: the landlord's acceptance of rent must be such that it is referable only to a desire to assent to the tenant continuing in possession. The context in which payment is made matters; the time at which it is made matters; the character in which it is received matters.

The following propositions emerge from a steady line of authority:

1. Acceptance of rent. Acceptance of rent simpliciter raises a presumption of assent, which the lessor may rebut by showing he received the sum in some other character — for example, as damages for use and occupation, or as standard rent under a rent-control statute.
2. Statutory tenancies. Where the tenant continues in possession under the protection of a rent-control Act, mere acceptance of rent will not amount to assent. The Supreme Court in Bhuneshwar Prasad v United Commercial Bank (2000) 7 SCC 232 held that the landlord cannot eject a statutory tenant except on specified grounds, so his acceptance of rent does not unequivocally signal an offer of a fresh tenancy. Independent evidence of assent is required.
3. Acceptance under a different head. Where the landlord receives the amount tendered as mesne profits or compensation, and not as rent, there is no holding over. Phool Rani Trivedi v Sheel Chandra AIR 2004 Del 424 illustrates the rule: a deposit accepted as damages for occupation, and not as rent, does not bring Section 116 into play.
4. Pre-termination payments. Acceptance of rent for a period prior to the termination of the lease cannot create a fresh tenancy. The Calcutta High Court in Khudiram Mukherjee v Samsul Bari AIR 1983 Cal 303 held that the lessor's animus to assent to continued possession can be inferred only from acceptance referable to the post-termination period.
5. Mere delay. Mere delay by the lessor in taking eviction proceedings does not amount to assent. The Calcutta High Court so held in Ratan Lal v Farshi Bibi (1907) ILR 34 Cal 396 and the principle has been consistently followed.
6. Service of notice to quit. Service of a fresh notice to quit on a tenant whose lease has expired is equally not an assent — it is the opposite, an assertion of the lessor's right to possession.
7. Long retention plus acceptance. Where the tenant retained possession for many years after the expiry of the lease and the lessor regularly accepted rent, the courts have inferred a tenancy by holding over. In Munshi Safar Ali v Abdul Majid AIR 1927 Cal 279, eleven years of continuous acceptance was held sufficient evidence.
8. Bilateral act. The Karnataka High Court in Sudarshan Trading Co Ltd v L D D'Souza AIR 1984 Kant 214 underscored that a tenancy of holding over is a creature of a bilateral, consensual act; it does not arise from the unilateral conduct of either party. A repudiating tenant cannot force the section into play; nor can a lessor manufacture a fresh tenancy by his own act alone.

Effect on rent-control statutes — the statutory tenant problem

The interplay between Section 116 and rent-control legislation is one of the trickier areas of property practice. A person who remains in possession after the contractual tenancy has expired, but whom a rent-control Act protects from eviction except on specified grounds, is loosely called a "statutory tenant". The phrase is, as the Supreme Court observed in Anand Nivas (P) Ltd v Anandji Kalyanji Pedhi AIR 1965 SC 414, technically inaccurate — such a person is not a tenant at all in the property-law sense. He has no estate or interest in the premises; he merely enjoys the protection of the statute against eviction so long as he pays the standard rent and observes the conditions of the original tenancy.

The Supreme Court's clarification in Bhawanji Lakhamshi remains the leading statement: where a rent-control Act is in force, the landlord cannot evict the tenant except on specified grounds. His acceptance of rent in such a setting cannot, by itself, evidence assent to a fresh contractual tenancy. The tenant who claims a fresh tenancy by holding over must produce independent proof of the landlord's animus. The position was reaffirmed in Shanti Prasad Devi v Shankar Mahto (2005) 5 SCC 543, where the Supreme Court refused to read mere acceptance of rent as a creation of fresh tenancy where the original lease contained a covenant against renewal.

Periodicity of the renewed tenancy — the link to Section 106

Section 116 does not free the parties to determine the periodicity of the renewed tenancy at large; it imports the rules of notice to quit under Section 106. The renewed lease runs from year to year if the property is leased for agricultural or manufacturing purposes, and from month to month in any other case, subject always to a contract to the contrary.

The Federal Court in Kai Khushroo Bezonjee Capadia v Bai Jerbai Hirjibhoy Warden AIR 1949 FC 124 (per Mukherjea J) and the Supreme Court in Bhawanji Lakhamshi have approved the view that the new tenancy carries by implication the same terms as the lease which expired, so far as those terms are consistent with a yearly or monthly tenancy. Lord Ellenborough's classic statement in Digby v Atkinson (1815) 4 Camp 275 — that the tenant holds subject to all the covenants in the lease which are applicable to his new situation — has been applied in successive Indian decisions.

Two riders are important. First, the period-of-notice clause in the original lease is not necessarily imported into the new tenancy; the Madras High Court in Bapayya v Yudvalli Venkataramam AIR 1953 Mad 884 declined to read it as a term of the holding-over tenancy. Second, an arbitration clause from the expired lease has been held inapplicable to the implied tenancy created on holding over (Dayal Chand v Union of India AIR 1971 P&H 23). In each case the test is whether the term is incident to a yearly or monthly tenancy.

Agreement to the contrary

Section 116 operates "in the absence of an agreement to the contrary". Two senses of that phrase have emerged in the cases. The first, more straightforward sense, is an express stipulation between the parties that fixes the terms of the holding over — for example, an agreement that the lessee will continue at a different rent or for a particular period. Where such an agreement exists, it controls the new tenancy.

The second sense was articulated by the Privy Council in Kamakhya Narayan Singh v Ram Raksha Singh AIR 1928 PC 146. There the heirs of a lessee for life continued in possession after the lessee's death and paid rent, which the lessor accepted, but in receipts issued in the name of the original lessee. When the heirs demanded receipts in their own names, the lessor refused to accept further rent. The Privy Council held that the refusal was an agreement to the contrary which prevented Section 116 from applying. The lesson is that the section's presumption of assent can be rebutted by conduct that unambiguously denies the new relationship.

Parties — under-lessees, heirs, assignees

Section 116 expressly extends its protection to under-lessees. An under-lessee remaining in possession after the determination of the head lease, whose under-lease is expressly preserved, can claim the benefit of holding over if the lessor accepts rent from him. The illustrations to Section 116 reinforce the point.

Heirs of a deceased lessee fall outside the section unless a fresh tenancy is created by mutual consent. There is no privity between the lessor and the heirs simply because the heirs continue in possession. The Madras High Court in Adimudam v Pir Ravuthan (1885) ILR 8 Mad 424 held that the heirs become trespassers if they continue without the lessor's positive assent. The same logic excludes assignees of a lessee whose lease has expired — a Bombay decision, Kisan Punjaji v Yashodabai (1968) 70 Bom LR 765, refused to allow an assignee to invoke Section 116 because there had been no fresh consensual transaction with the lessor.

Tenancy by sufferance — its juridical character

The phrase "tenancy by sufferance" is, as several decisions stress, a term of art rather than a descriptive one. The Calcutta High Court in Mozam Shaikh (supra) called it "the least and lowest interest which can subsist in reality". A Punjab Bench in Suraj Kumar v Bharma Devi AIR 1958 Punj 169 was even more candid: a tenancy at sufferance is in truth a wrong, not a tenancy at all; the term is preserved only to mark a possession that began lawfully but turned wrongful.

Two consequences follow. First, no notice to quit is necessary to determine a tenancy by sufferance — the relationship has no privity to terminate. The Supreme Court in Sevoke Properties Ltd v West Bengal State Electricity Distribution Co Ltd (2020) 11 SCC 782 reiterated that once the lease is determined by efflux of time under Section 111(a), the occupier is a tenant at sufferance and there is no necessity for a notice of termination under Section 106. Second, the lessor may bring an action for ejectment without further preliminaries, and the tenant by sufferance is liable to mesne profits (Gulam Mohinddin v Dayabhai AIR 1923 Bom 398).

That said, possession of even a tenant by sufferance is juridical until a decree for eviction is made. The Supreme Court in Chander Kali Bai v Jagdish Singh Thakur AIR 1977 SC 2262 was clear that the lessor cannot resort to self-help. He must follow due process; if he uses force, the tenant by sufferance can recover possession under the Transfer of Property Act read with the Specific Relief Act, 1963. The Andhra Pradesh High Court took a similar view in Shri Lakshmi Venkateshwara Enterprises v Syeda Vajhiunnissa Begum AIR 1994 AP 32, refusing to treat a tenant by sufferance as a stranger to the protection of Section 6 of the Specific Relief Act.

Holding over distinguished from continuation of the original term

A subtle distinction often missed in the answer scripts is the line between holding over and continuation of the original tenancy. Holding over presupposes that the lease has been determined and that what continues is a new, implied tenancy. Where, by contrast, the lessee remains in possession in pursuance of an option of renewal contained in the original lease, no question of holding over arises — the parties are still operating under the original demise. The Calcutta High Court in Ranjit Kumar Dutta v Tapan Kumar Shaw AIR 1997 Cal 278 made the point sharply: the principles of holding over come into play only after determination of the lease; they cannot apply where occupation continues under the registered lease after exercise of an option to renew.

The Bengal Court in Arabinda Basu v Ranjit Kumar AIR 1955 Cal 519 had drawn a related distinction between a tenant at sufferance and a tenant whose tenancy had been formally renewed; the renewal creates a fresh estate, the sufferance creates none. For the exam, the safest test is to ask: has the original lease been determined? If yes, Section 116 may apply; if not, the question is one of construction of the original lease and not of holding over at all.

Selected leading authorities

The following decisions repay close reading and are the staple of judicial-service papers on this section.

• Bhawanji Lakhamshi v Himatlal Jamnadas Dani AIR 1972 SC 819 — the foundational Supreme Court statement: assent must be referable to the desire to permit continued possession; rent-control overlay alters the inference.
• Kai Khushroo Bezonjee Capadia v Bai Jerbai Hirjibhoy Warden AIR 1949 FC 124 — the Federal Court's authority that holding over creates a new tenancy whose terms are by implication those of the expired lease.
• Shanti Prasad Devi v Shankar Mahto (2005) 5 SCC 543 — acceptance of rent after expiry of a lease that excluded renewal does not create a fresh tenancy.
• R V Bhupal Prasad v State of Andhra Pradesh (1995) 5 SCC 698 — tenant at sufferance has no estate; lessor entitled to immediate possession.
• Karnani Industrial Bank v Province of Bengal AIR 1951 SC 285 — there can be no question of "continuing in possession" until the lease has expired.
• Doe d Knight v Smythe (1815) 4 M&S 347 — the English foundation of tenancy at sufferance.
• Mozam Shaikh v Ananda Prasad AIR 1942 Cal 341 — the classic Indian statement that sufferance is a fiction to avoid trespass.
• Suraj Kumar v Bharma Devi AIR 1958 Punj 169 — sufferance is a wrong, not a tenancy.

Drafting and pleading angle

For the drafting paper, two practical points are worth carrying. First, where a landlord wishes to preserve his right to evict at the end of the lease without being met with a Section 116 plea, he must avoid receiving any sum that can be characterised as "rent" after the lease has determined. The safer course is to issue a written demand for damages for use and occupation, and to receipt all subsequent payments as such. Second, where a tenant wishes to claim the benefit of Section 116, he must plead it expressly. The Madras and Allahabad High Courts have repeatedly held that a holding-over plea, being founded on an implied agreement, must be specifically taken in the written statement and cannot be raised for the first time at the appellate stage.

The wider conveyancing context — the rules on rights and liabilities of lessor and lessee, the requirement of a registered conveyance for an instrument of sale by the landlord during the holding-over period, and the charges that may attach to the leasehold — must always be kept in view. Section 116 does not float free of the rest of the Act; it is a hinge that connects the law of leases to the doctrines of operation of transfer, competence to transfer, and notice — actual and constructive.

Exam-angle takeaways

Three propositions recur in judicial-service question papers and are worth memorising in the form decisions have used:

1. The two essential ingredients of Section 116 are continued possession and the lessor's assent (whether by acceptance of rent or otherwise) — both must be present.
2. Holding over creates a new tenancy, not a continuation of the old; the new tenancy's periodicity is governed by Section 106.
3. A tenant by sufferance is not a tenant in the true sense; the doctrine survives only to keep the post-lease occupier out of the trespasser's box, and can be evicted without notice but only through due process.

For state judiciary mains, candidates should be ready to discuss the rent-control overlay — the effect of Bhawanji Lakhamshi and Anand Nivas — and the related doctrines on the modes of determination of lease. For CLAT PG, a single-line statement of the difference between holding over and tenancy by sufferance, paired with the citation of Bhawanji Lakhamshi, will usually carry full marks.

Frequently asked questions

What is the difference between holding over and tenancy by sufferance?

A tenant who continues in possession after the determination of the lease with the lessor's consent is a tenant holding over and falls within Section 116 TPA; a tenant who continues without that consent is a tenant by sufferance. The Supreme Court in Bhawanji Lakhamshi v Himatlal Jamnadas Dani AIR 1972 SC 819 confirmed that the assent of the lessor — by accepting rent or otherwise — is the load-bearing element. Holding over creates a fresh implied tenancy; sufferance creates no relationship at all.

Does mere acceptance of rent always create a tenancy by holding over?

Not always. Acceptance of rent simpliciter raises a presumption of assent, but that presumption is rebuttable. Where a rent-control Act protects the tenant from eviction except on specified grounds, the Supreme Court in Bhuneshwar Prasad v United Commercial Bank (2000) 7 SCC 232 held that acceptance of standard rent does not unequivocally evidence assent to a fresh contractual tenancy. The lessor may also show he received the sum as damages for use and occupation, in which case Section 116 does not apply.

Is a tenant by sufferance entitled to a notice to quit under Section 106?

No. A tenancy by sufferance creates no privity of contract or estate; it is a fiction to avoid the post-lease occupier being treated as a trespasser. The Supreme Court in Sevoke Properties Ltd v WB State Electricity Distribution Co Ltd (2020) 11 SCC 782 held that once the lease is determined by efflux of time, the occupier is a tenant at sufferance and no notice under Section 106 is required to determine that fictional relationship. The lessor must, however, still follow due process to recover possession.

What periodicity does the renewed tenancy under Section 116 carry?

Section 116 imports the rule in Section 106. The renewed lease runs from year to year if the property was leased for agricultural or manufacturing purposes, and from month to month otherwise, subject to a contract to the contrary. The Federal Court in Kai Khushroo Bezonjee Capadia v Bai Jerbai Hirjibhoy Warden AIR 1949 FC 124 and the Supreme Court in Bhawanji Lakhamshi held that the new tenancy by implication carries the same terms as the expired lease, so far as those terms are consistent with the new periodicity.

Can heirs of a deceased lessee invoke Section 116 by continuing in possession?

Not automatically. There is no privity between the lessor and the heirs simply because they remain in possession; the Madras High Court in Adimudam v Pir Ravuthan (1885) ILR 8 Mad 424 held that the heirs become trespassers in the absence of the lessor's positive assent. A fresh tenancy can arise only if the lessor accepts rent from them, or otherwise assents to their continuance — the same bilateral act that Section 116 requires for any other lessee.