Sections 115-117 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
What happens to a sub-tenant when the main lease ends? What if a tenant stays on after the term and the landlord keeps taking rent? And do these rules cover farm leases at all? Sections 115, 116 and 117 answer these three questions. This is explained as per the text of the Act consulted.
Section 115: a surrender of a lease does not prejudice an earlier under-lease on substantially the same terms, but a forfeiture annuls under-leases, unless the lessor procured the forfeiture in fraud of the under-lessees or relief under section 114 is granted. Section 116: if a tenant stays on and the lessor accepts rent or otherwise assents, the lease is renewed from year to year or month to month, by the purpose, as in section 106. Section 117: the Chapter does not apply to agricultural leases unless the State Government notifies it, with effect six months after publication.
Source note
The text consulted is a publisher's print of the Act showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003); later amendments should be checked. In section 117, "[ *]" marks omitted words after "State Government", and a bracketed phrase marks words inserted or substituted. These sections follow the modes of ending a lease in our article on section 111. Under-leases are also touched on in our article on the lessee's right to sub-let under section 108.
If you are a landlord or tenant unsure whether a lease continues after its term, a legal consultation before taking or paying rent can save trouble.
Section 115: effect of surrender and forfeiture on under-leases
Surrender
The surrender, express or implied, of a lease does not prejudice an under-lease of the property or any part of it previously granted by the lessee, on terms and conditions substantially the same (except as regards the amount of rent) as those of the original lease. But, unless the surrender is made for the purpose of obtaining a new lease, the rent payable by, and the contracts binding on, the under-lessee shall be respectively payable to and enforceable by the lessor.
In short, the sub-tenant's position survives a surrender, and he then deals directly with the lessor, except where the surrender was to get a new lease.
Forfeiture
The forfeiture of a lease annuls all under-leases, except where:
- the forfeiture has been procured by the lessor in fraud of the under-lessees; or
- relief against the forfeiture is granted under section 114.
Relief under section 114 is explained in our article on sections 114 and 114A.
| Event | Effect on a previously granted under-lease |
|---|---|
| Surrender (express or implied), under-lease on substantially the same terms | Not prejudiced; rent and contracts become payable to and enforceable by the lessor, unless the surrender was to obtain a new lease |
| Forfeiture | Under-lease annulled |
| Forfeiture procured by lessor in fraud of under-lessees | Under-lease not annulled |
| Forfeiture, but relief granted under section 114 | Under-lease not annulled |
Section 116: effect of holding over
If a lessee or under-lessee remains in possession 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, 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. So the purpose-based rule in section 106 decides which kind of renewal applies; see our article on section 106.
Two things must be present together: continued possession and acceptance of rent or other assent. The text does not say that possession alone, or silence alone, is enough.
The Act's illustrations
- (a) A lets a house to B for five years. B under-lets it to C at a monthly rent of Rs. 100. The five years expire, but C continues in possession and pays the rent to A. C's lease is renewed from month to month.
- (b) A lets a farm to B for the life of C. C dies, but B continues in possession with A's assent. B's lease is renewed from year to year.
Section 117: agricultural leases
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 applicable to all or any such leases, together with, or subject to, those of the local law, if any, for the time being in force. Such a notification does not take effect until the expiry of six months from the date of its publication.
Check whether your State has issued any such notification. The text consulted does not mention any.
| Question | Answer in section 117 |
|---|---|
| Does the leases Chapter apply to agricultural leases? | No, unless the State Government notifies |
| Can the State apply only some provisions? | Yes, "all or any" |
| Does the local law still matter? | Yes, the provisions apply together with or subject to it |
| When does a notification take effect? | After six months from publication |
Worked example
Parveen leased a shop to Naveen for three years under a registered lease. The lease expires, Naveen stays on, and Parveen accepts the next month's rent without any objection. The shop is not for agricultural or manufacturing purposes, so under section 116, in the absence of an agreement to the contrary, the lease is renewed from month to month. Had Parveen refused the rent and told him to leave, the section's conditions of acceptance or assent would not be met on the text.
If Naveen had sublet part of the shop to Omkar, and the main lease had been surrendered by agreement with Parveen, Omkar's under-lease would survive under section 115, with Omkar paying rent to Parveen, unless Naveen surrendered to obtain a new lease.
Practical points
- Landlords: do not accept rent after a lease ends unless you intend the lease to continue; keep a record of what you intended.
- Tenants: keep rent receipts after the term ends, since they are evidence of the landlord's acceptance.
- Sub-tenants: know which event ended the main lease, since the effect differs for surrender and forfeiture.
- Agricultural leases: check the local law and any State notification; this Chapter may not apply.
- Written documentation: a short written extension avoids doubt about renewal; see modification of lease terms.
Need help with a lease that ran past its term?
Whether a lease has been renewed, and on what footing, depends on the facts: possession, rent and what the landlord did. Our legal consultation team can read the lease and the payment record and tell you where you stand.
Key takeaways
- A surrender does not prejudice an earlier under-lease on substantially the same terms; the under-lessee then deals with the lessor.
- A forfeiture annuls under-leases, except where procured in fraud of under-lessees or relieved under section 114.
- A tenant who holds over with the lessor accepting rent or assenting gets a renewal from year to year or month to month, as section 106 specifies.
- The leases Chapter does not apply to agricultural leases unless the State Government notifies.
- A notification takes effect six months after publication.
Read next
- Section 111: how a lease comes to an end
- Section 106: duration of lease and notice to quit
- Sections 114 and 114A: relief against forfeiture
- Modification of lease terms: supplemental deed
Disclaimer: Based on a publisher's print of the Transfer of Property Act, 1882 showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003), as consulted on 2 October 2026. State amendments, later amendments, stamp duty and registration charges are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.