Illegal Dispossession and Closure of Leasehold Property - The case highlights disputes where the lessor allegedly dispossessed the lessee unlawfully, with contention over responsibility for factory closure due to the lessor's fault per Clause 8(g) of the lease deed. The lessee claims that permission for closure should have been obtained from them, not the lessor or management, especially since workmen were appointed by the lessee. The arbitration clause in the lease was not invoked, and no definitive finding was made regarding culpability for closure, leaving the issue unresolved. The lessee also accused the lessor of preventing factory operation, while the lessor claimed machinery was removed without authorization. ["2025 0 Supreme(Mad) 2542"]
Lessor and Lessee Liability and Default - The lessee and lessor are bound by agreements to pay dues and adhere to conditions, including restrictions on sub-letting or assigning the lease without consent. Default clauses consider a mill as defaulter if its owner or related parties are involved in other defaulted mills. Notably, earlier policies (2000-2001) did not impose liability on lessors for lessee’s financial defaults, but subsequent policies from 2017-2018 introduced clauses holding lessors liable. ["2024 0 Supreme(P&H) 33"]
Rights and Obligations in Lease Agreements - The lease defines the roles of lessor and lessee, including payment of rent, disclosure of interest, and rights to remove improvements or assign the lease. The lessee is obliged to pay rent timely and can remove their interest even after lease termination. The lessor is responsible for providing quiet enjoyment and cannot interfere unlawfully. ["2023 0 Supreme(UK) 578"]
Assignment and Liability in Lease Transfers - When a lessee assigns a lease with the lessor's recognition or consent, the original lessee typically remains liable for rent unless explicitly discharged. Court rulings indicate that even with written consent, the original lessee may still be liable unless explicitly released, depending on jurisdiction and specific agreement terms. ["
GOONESEKERE v. RAMAPILLAI
"]Lessee's Action Against Trespassers and Lessors - A lessee cannot claim damages from the lessor for unlawful dispossession or trespass unless eviction occurs through due legal process. If third parties oust the lessee unlawfully, the lessor is not automatically liable unless there is a breach of covenant or unlawful interference. ["
ALAGIAWANNA GURUNNANSE v. DON HENDRICK et al.
"]Covenants and Rights in Lease Agreements - Typical covenants include the lessee’s obligation to pay rent, not sub-let or assign without approval, and the lessor’s duty to allow quiet enjoyment. Notice periods for quitting are stipulated, and upon lease expiry or termination, the lessee must vacate and return premises. ["
KURUNERU v. ALIM HADJIAR
"]Lessee’s Improvements and Third-Party Claims - Lessee-made improvements generally cannot be claimed against third-party claims of superior title unless the lessor is a bona fide possessor. Improvements made during the lease are protected unless the lessor has a better title, and eviction during the lease does not automatically entitle the lessee to compensation. ["
MOHIDEEN v. ISEY
"]Lease Termination and Cancellation - Lease cancellation can be informal, such as an endorsement signed by both parties, and does not necessarily require formal notarization. Surrender of possession is essential for valid termination, as courts recognize informal agreements and acts of surrender as sufficient to end a lease. ["
PIYADASA v. PANDITHARATNA HAMINE
"]
Analysis and Conclusion:The sources collectively illustrate that in endowment leases, the rights and liabilities of lessors and lessees are governed by specific contractual clauses, statutory provisions, and judicial interpretations. Key points include the importance of lawful possession, proper procedures for assignment and termination, and the responsibilities during disputes or closures. Lessees are generally protected against unlawful dispossession but remain liable for rent unless legally discharged. Lessors' liability varies depending on contractual clauses and policy updates, especially concerning defaults and third-party claims. Proper documentation and adherence to contractual terms are crucial in resolving disputes related to leasehold rights, obligations, and termination.
