According to the Transfer of Property Act 1882, these circumstances lead to a tenancy by holding over:
A lessee or under-lessee of a property remains in possession after the determination of the lease
A lessor or his legal representative either accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession
There is no agreement to the contrary
The expression 'holding over' is the act of retaining possession. There is a distinction between a tenant continuing in possession of a property after the determination of the lease without the consent of the landlord, and a tenant doing so with the consent of the landlord. The former is called a tenant by sufferance. On the other hand, the latter is called a tenant holding over or a tenant at will.
A lessee holding over with the consent of the lessor is in a better position. The assent of a landlord to the continuance of the tenancy after its determination creates a new tenancy. In such a case, the lease is renewed from year to year, or from month to month, according to the purpose for which the property is leased. Taking an example, assume A lets a house to B for three years, and B under-lets the house to C at a monthly rent of Rs 2,000. The three years expire,
but C continues in possession of the house and pays the rent to A. So C's lease is renewed from month to month. Similarly, in case A lets his house to B for the life of C. If C dies, but B continues in possession with A's assent, then B's lease is renewed from year to year.
STATUTORY TENANCY IS DISTINCT FROM A TENANCY OF HOLDING OVER IN THE SENSE THAT THE FORMER IS MORE SPECIFIC.
The possession of a tenant who has ceased to be tenant is protected by law. Even though he may not have a right to continue in possession after the termination of the tenancy, his possession is juridical.
Tenancy by holding over is different from statutory tenancy. Most Rent Control Acts recognise statutory tenancy - either expressly or by implication. In case the tenancy is given protection in any statute, it is termed as a statutory tenancy. In case of a statutory tenancy, the protection given to a tenant in retaining possession, even after the tenancy is terminated, is the creation of a statute. Statutory tenancy is a special connotation which means benefits and advantages are conferred on a tenant by any statute.
Statutory tenancy is distinct from a tenancy of holding over in the sense that the former is more specific. In case of a statutory tenancy, the terms of rights of a tenant who retains possession by holding over are defined by statute. All Rent Control Acts recognise and afford protection to every tenant against eviction despite termination of tenancy except on the grounds recognised by the Act. As such, no order or decree for eviction can be passed against a tenant unless any such ground is established to the satisfaction of the court.