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Where section 106(1) of the Transfer of Property Act, 1882 applies, and there is no contract, local law…

Section 106(1) deems an agricultural or manufacturing lease to run from year to year and allows either party to terminate it on six months’ notice. The default for other…

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Where section 106(1) of the Transfer of Property Act, 1882 applies, and there is no contract, local law or usage to the contrary, what is the deemed duration of a lease of immovable property for agricultural or manufacturing purposes?

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Answer and explanation

Correct answer B

Section 106(1) deems an agricultural or manufacturing lease to run from year to year and allows either party to terminate it on six months’ notice. The default for other leases is month to month with fifteen days’ notice. Under section 117, the lease chapter applies to agricultural leases only to the extent specified in a State Government notification.

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Option A

Incorrect. Month to month is the default for purposes other than agriculture or manufacturing when section 106(1) applies.

Option B

Correct. Under Section 106(1) of the Transfer of Property Act, 1882, in the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes is deemed to be a lease from year to year, terminable on the part of either lessor or lessee by six months' notice.

Option C

Incorrect. Six months is the notice period for ending the year-to-year lease, rather than a fixed duration.

Option D

Incorrect. A year-to-year lease is periodic and does not automatically end after one year.

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