LICENCE-DEFINITION AND GRANT OF LICENCE

INTRODUCTION
Property is perhaps the most important and the most complicated and
extensive branch of modern law. Under this field of law, the rights, claims, duties and
obligations of the parties involved with any kind of property become the subject of
study.
Earlier, licence was described as the fact that a landowner communicated
his consent to anothers using his land; while at other times licence was described the
legal relationship whereby the other could use the land without being liable for
trespass. In present times, licence is referred to as a validation by the owner of the
land for the acts of the licensee which would otherwise be committed unlawfully.
The traditional concepts of bare or mere licenses, licenses coupled with
an interest or with a grant, licenses acted upon or executed, and licenses
upon valuable consideration were used earlier. Most of these concepts assumed
certain differences in the legal consequences of various transactions, and therefore
furnished a poor starting point for determining what the legal consequences of a given
transaction should be. It also made it easy to overlook important license transactions
which these phrases did not suggest.
A factual classification of licenses which starts with the differences in the
parties intentions will place in one group the transactions wherein the parties have
contemplated that the interests created should be revocable. But the transactions
where the parties have contemplated irrevocable interests require further subdivision.
A large number of licenses are not at all lacking in formality; they are called licenses
solely to distinguish them from leases. Another large group of licenses are so called
because they are oral; previous discussion has been confined almost entirely to these.
Licenses of another group present a different problem because they are written but
unsealed. Still other licenses are so called, although they are in writing .and under
seal, because they lack technical conveyance language.
According to some scholars, the legal instrument of License in immovable properties
was developed to deal with the legal complications of lease and rental rights under
Indian law. In particular, this legal instrument was developed to enable property
owners to restrict lessees and evict them more easily. Still, many property owners that
intended to protect themselves by entering a leave and license agreement (i.e. a
license agreement to use an immoveable property for a certain purpose), find
themselves facing court decisions ruling that their agreement was in fact a lease
agreement. Some of the mistakes made by such property owners may be avoided
In this work, elucidated the meaning of licence and how a licence is granted in India.
In India, Indian Easements Act of 1882 governs such transactions. Section 52, 53 and
54 are the relevant provisions provide to understand concept and grant of licence in
India. The differentiation between leases and licence along with lease and easement
have also been made.
DEFINITION OF LICENCE
A licence is a personal right granted to a person to do something upon
immovable property of the grantor and does not amount to the creation of interest in
the property itself. It is purely a permissive right and is personal to the grantee. It
creates no duties and obligations upon the persons making the grant and is, therefore,
revocable except in certain circumstances expressly provided for in the Indian
Easements act, 1882 itself. The licence, when granted, has not other effect to confer
liberty upon the licencee to go upon the land which would otherwise be lawful.

A licence in the law of land is ordinarily a permission merely to do something on or to

the detriment of the land of the giver of the licence, the licensor. Occasionally it is a
permission to interfere with an easement or profit a prendre belonging to the licensor.
It creates a privilege in favor of the licencee.
A licence may be oral in which case, terms, conditions and the nature of the licence,
can be gathered from the purpose for which the licence is granted coupled with the
conduct of the parties and the circumstances which may have led to the grant of the
licence. Every licence is governed by the provisions under the Easements act.
A licence does not confer an interest or property in the thing, and though it may be
coupled with a grant which conveys an interest in property, licence by itself does not
confer any interest.
Where the parties entered into a partition agreement and divided the property giving
themselves certain rights, it would not amount to a licence.
The negative definition of licence under Indian law makes it necessary that before a
right can be shown to be a licence only, it must be proved not to be an easement or
an interest in the property.
A.Licence under English Law
According to English Law, a licence is purely a personal privilege or right enabling the
licencee to do something on the land of the licensor which would otherwise be
unlawful.It is an excuse by reason of the consent of the licensor for doing an act which
would otherwise be unlawful. It is merely a leave to do a thing, which enables the
licencee to do lawfully what he could not otherwise do except unlawfully.
A licence is merely a permission to do an act, which without such permission would
amount to a trespass. A dispensation or licence properly passeth no interest, nor
alters or transfers property in anything, but only makes an action lawful, which
without it had been unlawful.
Licence is only a permission to do something on an immovable property like
occupation, or enjoying fruit thereof, or using it for some other purpose.
License is an official permit or permission to carry on some business or do some
act which without the license would be unlawful and the words license and permit are
often used synonymously. Licence is interchangeable with permission. Permission or
licence is granted for use of an immovable property for a particular purpose given by
the granter to the grantee which as of a necessity in his retention of dominant right of
possession over the immovable property with the granter.
LICENCE UNDER INDIAN LAW
In India, the Indian Easements Act, 1882 provides for law relating to licences in
property law. Section 52 of Indian Easements Act, 1882 defines Licence as under:
Where one person grants to another, or to a definite number of other persons, a right
to do or continue to do, in or upon immovable property of the grantor, something
which would, in the absence of such rights, be unlawful, and such right does not
amount to an easement or an interest in the property, the right is called a licence.
From the above definition of licence, it seems that if a person himself has acquired a
right or interest in an immovable property through an instrument, the right conveyed
in his favour in that instrument, will not be licence. In India, judicial and legislative
definitions of licence have followed the English definitions of the term.
Under Section 52, if a person is given the right to use the immovable property in a
particular way under certain terms while retaining control and possession of the same,
the person so permitted is only a licencee. The question that arises in this context is
that whether the relationship is that of landlord-tenant or licensor-licensee. The
relationship depends on the intention of the parties that whether there was interest in
the land or merely personal privilege without any interest.
A licence cannot be granted only in favour of definite number of persons and not in
favour of fluctuating body or individuals. The agreement involved in the case, even if

binding on the defendants, cannot be considered to be at least a bilateral agreement

between the representatives of the two parties and containing reciprocal conditions. A
licence is a personal right given to the licencee and, therefore, Section 56 of the
Easements Act, 1882 provides that licence cannot be transferred by the licencee or
exercised by his servants and agents.
The Supreme Court in# Associated Hotels of India Ltd. v. R.N. Kapoor summed
the concept of Licence as under:
Under the aforesaid section, if a document gives only a right to use the property in
particular way or under certain terms while it remains in the possession and control of
the owner thereof, it will be a licence. The legal possession, thereof, continues to be
with the owner of the property, but the licencee is permitted to make use of the
premises for a particular purpose. But for the permission, his occupation would be
unlawful. It does not create in his favour any estate or interest in the property.
It important to take note of essential features of licence as under
1) No transfer of interest :A licence is a permission to do some act which, without
such permission, would be unlawful.
2) No interest in accretions :A licensee has no interest in the property and
therefore, he acquires no right by accretion.
3) Neither transferable nor heritable :A licence is neither transferable; nor
heritable.
4) A licence is a matter purely personal between grantor and grantee.
5) Section 52 of Easement Act does not require any consideration, material or
nonmaterial, to be an element of the definition of licence, nor does it require that the
right
under the licence must arise by way of contract or as a result of mutual promises.
6) The person who grants the licence must be the owner of the property. The other
person who gets the permission must be a stranger or have no right in the property.
7) licence creates no duties and obligations upon the person making the grant
and is therefore revocable except in certain circumstances expressly provided in the
Act itself.
8) A licence is usually revocable by grantor, except in the two cases mentioned in
the section 60 of Easement Act.
9) A subsequent transfer of the property terminates a licence.
10) A licensee cannot sue trespassers and strangers in his own name.
11) A licence is terminated by death of either party.
KINDS OF LICENCE
A licence may be of the following two kinds:
1. Bare licence which is purely a matter of personal privilege, and
2. Licence coupled with a grant or interest in the land.
Whether the act allowed to be done is a bare licence or something more than a
licence depends on the terms of the transaction.
When a landowner permits another to use the land under circumstances in which it is
reasonable to foresee that the licensee will spend money or otherwise change position
in the belief that the license will not be revoked, the license may become irrevocable.
For example, if a person owns two parcels, one of which has no access to a public
road, sells the landlocked parcel to another person, and gives him permission to build
a driveway across the lot the seller has retained, the license becomes irrevocable
when the buyer invests in the property, reasonably believing that the permission will
not be revoked.
1.

Bare Licence

A bare licence is a personal permission or consent, granted without consideration,

to enter, traverse over or be present upon the land of another. A bare licence is a
licence granted gratuitously which is not coupled with the grant of an interest in
the land, e.g. the licence which one necessarily grants to ones guests. Such a
licence may be revoked at any time.
A bare licence is a defence to what would otherwise amount to the tort of trespass.
Where the licencee oversteps the ambit of the licence, his status will therefore be that
of trespasser.If the person is permitted to enter the land for one purpose but enters
for another purpose, or whilst on the land begins to pursue a different purpose to that
which he is authorised, again he becomes a trespasser, where it is known or
understood that the occupier would not have given consent.
If a person is allowed to do the act on the land without interfering with the nature of
the land or without taking any profits from the land, then it is a case of bare licence.
Bare licences may be created expressly or impliedly and no formalities are required
a bare licence may arise by implication from circumstances or conduct.
Bare licenses generally are not assignable (transferable) and are revocable at will by
the property owner. Bare licence becomes irrevocable when the licensee acting upon
the licence executes a work of a permanent character and incurs expense in doing so.
2.
Licence coupled with a grant or interest in land
A licence coupled with a grant or interest in land arises where there is a permission to
enter onto anothers land for the purpose of removing something from that land (such
as timber). This licence combines the grant of an interest (such as a profit a prendre)
with an ancillary permission to enter the land to realise or exploit that interest.
A license coupled with an interest arises when a person acquires the right to take
possession of property located on someone elses land, as when a lender acquires the
right to repossess an automobile that is located on private property after the borrower
has defaulted on a loan.
A licence may be coupled with the grant of an interest in the land, as when standing
timber is sold on terms that the purchaser is to sever the timber: the sale of the
timber on these terms implies the grant to the purchaser of a licence to enter the land
in order to obtain the timber. Such a licence is irrevocable so long as the interest to
which it is annexed lasts, and unless otherwise agreed it can be assigned.
If the person is allowed to take exclusive possession of the land, to plant trees over it,
then it is not a bare licence but it is a licence that is coupled with grant or interest in
land. If the licence gives the licensee a right to make a construction on land, it is not a
bare license but it is a licence coupled with an interest in land. In such a case, the
licensee who has entered possession after execution of the licence, is entitled to
maintain a suit against the trespasser who has dispossessed him.
Licenses coupled with an interest usually are both assignable and irrevocable, at least
until the holder of the license has had a reasonable time to retrieve the property that
gave rise to the license. Where such operative facts give a privilege accessory to and
in aid of the exercise of a power, or other legal interest, otherwise vested in the
licensee.
Gratuitous licensee
The word Gratuitous means without consideration or freely.
1. Gratuitous licensee shall not transfer license to any other person.
2. Gratuitous licensee shall not file suit against trespasser or stranger.
In case of Vishivanath V. Jandabhai reported in 1990(2)Bom.C.R. 406, it was
held that a gratuitous licensee cannot claim any legal right in the property.
Rights of licensee
1. Decision passed by court against licensor is binding on the licensee.
2. When licence is revoked, then licensee is entitled to reasonable time to leave the
property affected thereby and to remove any goods which he has been allowed to
place on such property.

3. When gratuitous licensee executes work of permanent character during licence and
with the consent of licensor, then gratuitous licensee is entitled to get compensation
of expenses incurred by him after revocation of licence.
Duties of Gratuitous licensee :
1. It is the duty of gratuitous licensee that he shall not cause injury or damage to the
property.
2. It is his duty that he shall not make any permanent change in the property of
licensor which is in his possession.
3. It is his duty to abide each and every terms and condition of licence.
4. If licensor is not aware about any injury or damage caused to the property of
licensor by third person, then it is the duty of licensee to inform it to licensor.
5. It is his duty to disclose any defect in the property of licence to licensor if he finds
it.
6. After completion of period of license, gratuitous licensee has to vacate premises/
property or to give possession of property to licensor.
7. It is his duty to take care of property or premises of licence during the period of
licence.
LEASE AND LICENCE: DISTINCTION
As defined by Section 105 of the Transfer of Property Act, 1882:
A lease of immovable property is a transfer of a right to enjoy such property,
made for a certain time, express or implied, or in perpetuity, in consideration of a
price paid or promised, or of money, a share of crops, service or any other thing of
value, to be rendered periodically or on specified occasions to the transferor by the
transferee , who accepts the transfer on such terms.The transferor is called the lessor,
the transferee is called the lessee, the price is called the premium, and the money,
share, service or other thing to be so rendered is called the rent.
The requirements for a lease are:
exclusive possession of a defined area of land,
for a fixed period (or series of periods) of time,
with the intention to create an estate in land that is an interest in the land
itself which can be assigned or sold.
A licence is simply a permission to use land. It allows someone access to the land of
another for an agreed purpose. It is an authority that justifies what would otherwise
be a trespass. It does not confer any interest in land.
Whether a transaction amounts to a lease or license, is a question that has been
considered in a whole host of judicial pronouncements and cases continue to be
handed over. The question that whether a transaction is lease or license depends
upon the intention of the parties and whether exclusive possession has been given or
not.
The test to determine that whether a transaction is a lease or a licence is:
1. The intention of the parties, which is to be gathered from the terms of the
contract. If the terms are not clear, then the surrounding circumstances shall
determine the intention of the parties.
2. In the absence of a written document and when somebody is in exclusive
possession, then the intention is to be gathered from other evidence such as
exclusive possession would be the most relevant circumstance to arrive at the
intention of the parties at the time of making the lease.
3. If dispute arises then intention to be gathered from the reading of the document
as a whole.
4. Lease or licence is matter of contract between the parties. The contract is to be
construed or interpreted on the well-laid principles for construction of
contractual terms.

The definition in Section 52 of the Act referred to above does not refer to exclusive
possession. If there is no exclusive possession then the arrangement cannot be a
lease and must be a licence. The general rule is that the Court will look at the
substance of the agreement rather than the form in which it is expressed.
The major differences between lease and licence are:
A Lease is a transfer of right to enjoyment (exclusive possession) of that
property by the lessor the lessee, made for a certain term in consideration of a
fee subject to the terms set out in the lease agreement while a licence is the
granting of a permission to use the land in consideration of a fee subject to the
conditions set out in the licence.
A lease grants exclusive possession for a fixed period (term). A licence does not
grant exclusive possession.
A lease creates an interest in the land which can be transferred to the lessee for
the period of the lease. A licence does not create or transfer an interest in the
land.
A lease can be transferred (assigned) to another party and if registered on the
title is binding on a new owner of the land. A licence is not transferable.
A lease is not revocable (other than subject to any conditions set out in the
lease (e.g. a redevelopment clause). A licence is revocable.
Licence and Easement: Distinction
As per Section 4 of the Indian Easements Act, 1882; easement is defined as right
which the owner or the occupier of certain land possesses, as such, for the beneficial
enjoyment of that land, to do and continue to do something, or to prevent and
continue to prevent something being done, in or upon, or in respect of certain other
land not his own.
An easement is right or interest in immovable property for the land belonging to
another. When once an easement is validly created, it is annexed to land. The benefit
of it passes with the dominant tenement and the burden of it passes with the servient
tenement to every person into whose occupation the dominant and servient
tenements respectively come.
The major points of difference between an easement and a licence are the
following:
1. An easement is a right appertaining to property while a license is only a
personal right.
2. An easement is a right in rem and is enforceable by all and against all into
whose hands the servient and the dominant tenements respectively may come,
while a license is only a right in personam and therefore, not so enforceable.
3. An easement can be assigned with the property to which it is annexed, but a
license cannot be assigned at all except where it is a license to attend a place of
public entertainment.
4. A right of easement is not revocable at the will of the grantor while a license is
so revocable, except where the grantor is stopped by his conduct from
exercising the power of revocation conferred by law.
5. A license is permissive right traceable to a grant from the licensor either
expressly or impliedly. But an easement is acquired either by assertive
enjoyment by the dominant owner or by a negative covenant between the
parties or by grant or by statute.
6. An easement may be positive or negative in character, a license is invariably
positive and cannot be negative in character. It may be that there are cases in
which a negative pbligation might be cast on the licensor with the object of
protecting a licence coupled with a grant but such obligation is due to the grant
accompanying the licence and not to the licence per se.
GRANTING OF LICENCE

The provisions relating to granting of licence are the same as those governing the
easements. The provisions relating to granting of licence in India are Sections 53 and
54 of the Indian Easements Act, 1882.
Two preliminary questions that arise when entering into a Leave and Licence
agreement are who can grant a licence and how a licence is granted.
The first question is answered in section 53 of The Indian Easements act, 1882, that
states that a licencee may be granted by anyone in the circumstances and to the
extent in and to which he may transfer his interests in the property affected by the
licence. In other words, one cannot grant a licence and one cannot receive a licence if
the licensor does not possess a sufficient lawful interest in the property.
The second question is answered in section 54 of The Indian Easements act, 1882,
that states that a the grant of a licence may be express or implied from the conduct of
the grantor, and an agreement which purports to create an easement, but is
ineffectual for that purpose, may operate to create a licence. This definition is very
important. Owners of properties should mind that their behavior may create a licence,
even without a formal licence agreement.
Licence is, therefore, a grant of a right to do something upon an immovable without
creating interest in the property. It is therefore, distinguishable from an allied grant
such as a lease or an easement. Both lease and easement create an interest in the
property. Licence is only a permission to do something on an immovable property like
occupation, or enjoying fruit thereof, or using it for some other purpose.
POWER TO GRANT A LICENCE
Section 53 provides for the power to grant a licence. It states that A licence may be
granted by anyone in the circumstances and to the extent in and to which he may
transfer his interests in the property affected by the licence.
Power to grant a licence is co-extensive with the power to transfer. A man can grant a
license in the circumstances and to the extent he can transfer his interest in the
property affected thereby. The power to grant a license is only a personal right
attaching only a personal obligation on the grantor is more extensive than the power
to impose an easement which affects the property itself.
A licence by a mortgagee or co-tenant who is lawfully in the sole possession and
enjoyment of the property, to do a thing which he could himself lawfully do is a valid
licence. Anyone who can transfer property even if he is not the owner can grant a
licence. The licence can also be revoked by such a person.
The grant of licence may be express or implied which can be inferred from the
conduct of the grantor. Under Section 52, there is a grant of the right made by the
grantor. Without a grant in the general sense, no licence can be created.
An agreement for licence can subsist and continue to take effect only so long as the
licensor continues to enjoy a right, title and interest in the premises. On the
termination of the right ot the title, the agreement for licence comes to an end. If the
licensor is an tenant, the agreement for licence by him terminates with the tenancy,
and the licence ceases to be licensee.
In order to grant a licence, the licensor need not be the owner of the property. The
tenancy rights are also immovable rights of the tenant and therefore, he can grant the
licence. But by virtue of Section 53, the tenant can grant the licence subject to the
limitation and the extent to which he may be able to transfer the interest, viz., the
tenancy rights. A tenant is empowered to transfer his interest but he cannot do so
beyond the term of his lease.
FORM OF LICENCE EXPRESS OR IMPLIED

Section 54 provides that The grant of a licence may be express or implied from the
conduct of the grantor, and an agreement which purports to create an easement, but
is ineffectual for that purpose, may operate to create a licence.
A licence is notionally created where a person is granted the right to use the premises
without becoming entitled to the exclusive possession of them or the circumstances
and conduct of the parties show that all that was intended was that the grantee
should be granted a personal privilege with no legal interest.
A mere licence passes no interest nor alters or transfers property in any way but
merely makes an act lawful which without would have been unlawful. It is necessary
that the licence be in writing or registered.Where the licence is coupled with a grant of
immovable property or of an interest in immovable property, which is compulsorily
registrable, it must be in writing or registered.
Implied Licence
A licence may be implied from the conduct of the licensor whereby he allows
something to be done on his land by another person who believes the land to be his
own.[xlv] A plea of implied licence may be based on the right of equity to intervene,
must have for its foundation either a contract or the existence of some fact which the
legal owner is stopped from denying.
An everyday-life example of implied licence is in the case of a shopkeeper in the
invitation to customers to enter his premises to do business.
Licence may also be implied from the conduct of the licensor which induces in the
mind of the licensee a reasonable belief that the former consents to the latters doing
of certain acts, the doing of which would have been unlawful but for such consent.
The consent may also consist of words, spoken or written or acts and omissions on the
part of the licensor that would invoke reasonable belief in the mind of the licensee
that what he does is either actively approved or not objected to by the licensor.
A licence to enter upon the land of another is not implied by the sale of goods which
are stored upon the land, by a person other than the person against whom it is
claimed, nor the failure of the tenant to keep the premises in repairs authorises the
landlord to enter upon it for that purpose, in the absence of a contract to that effect.
Express Licence
An express license is one which in direct terms authorizes the performance of a
certain act; as a license to keep a tavern given by public authority. Express licences
govern more specific situations where the permission has been expressly directed
towards a particular individual. An example is where owner invites guests for dinner or
to stay in a room on his property. The licence governs only the specified period of the
stay and any re-entry after that period without further permission would constitute
trespass.
It is important to note that a person cannot grant a licence to himself or to himself
jointly with another. Therefore, it must be granted by an owner of the property who is
different from the licensee.
As a grant forms the basis of an easement as well as a licence, an agreement which
purports to create an easement may operate to create a licence only if it is ineffectual
for certain reasons to create such easement. As both an easement and licence
legalize acts which would have been unlawful otherwise, both go hand in hand but
while licence stops, an easement goes further and incorporates itself with the
property of the grantee, the beneficial enjoyment of which is its principal
characteristics. The rule in England where an easement is created only by grant under
seal has a very salutary effect. In India, the cases between landlords and tenants, in
which a grant by the former to the latter, of a right of easement, is ineffectual to
create an easement in the strict sense of the term, are covered by this rule.
REVOCATION OF LICENCE

a) A conjoint regarding of Ss.59 and 60 of the Act would establish that though
ordinarily all licences are revocable when the grantor transfers the property,
yet, in two exceptional cases provided for under S.60, the transfer would not by
itself put an end to the licence. Provisions of S.60 qualifies and restricts the
scope of general provisions with reference to the revocability of licence under
S.59 of the Act. If the licence is for some reasons irrevocable by the grantor
himself S. 59 does not authorize the transferee to revoke it. The transferee of
the property from a licensor has no higher rights than those of the transferor
and consequently the transferee is not entitled to revoke the licence when the
licensee had built upon the land.
b) Leave and License agreement comes to an end on the ceasing of the interest of
the licensor in the property particularly if the agreement merely creates licence.
A licence is neither annexed to the property in respect of which it is enjoyed, nor
is it a transferable or heritable right, but is a right purely personal between
grantor and
licensee. Therefore, where a licensee dies, the licence expires
and the legal representatives of the licensee hold as mere trespassers.
License when revocable :
A licence may be revoked by the grantor, unless
( a) it is coupled with a transfer of property and such transfer is in force;
(b) the licensee, acting upon the licence, has executed a work of a permanent
character and incurred expenses in the execution.
A bare licence can always be revoked by grantor. A licence, unlike a contract,
creates no mutual obligation and rights between parties and it may be revoked under
this section except when it is one which falls within the exception mentioned therein.
The power of revoking a bare licence given by the section to the licensor is not
affected by the fact that the licence has been given for a valuable consideration. The
fact that a licence has been acquired for an agreed term would not affect the right of
the licensor to revoke it at any time where it is only a bare licence. The licensor has
the power to revoke a licence at any time and his right to do so is not dependent upon
his giving a reasonable notice or sufficient time to the licensee as a condition
precedent. The right of a licensee to get a
reasonable notice before revocation and the right of the licensor to revoke a licence
are not interrelated in the sense that the licensor could be restrained from exercising
his right without issuing such a notice as a condition precedent.
In the case of Bhaurao vs. Geetabai 2013(4) Mh.L.J. 196. Easements act
Section 60(b) Irresvocable licence Proof of merely because there is a work of
permanent character executed by incurring expenses, would not by itself be enough
to establish that the licence was irrevocable.
In the case of Himmatrao Marutorao Dhobale vs. Arun Gulrao Jichkar, 2015
(2) Mh.L.J. 560. Easements Act Section 60(b) and Evidence Act Section 115
Appellant proved that respondent is licensee on suit plot Respondent constructed
house on the suit plot and occupied and resided in it Respondent cannot be denied
benefit of provisions of section 60(b) merely because respondent had denied that he
is a licensee.
S.62deals with the licence which deemed to be revoked :
A) When from a cause preceding the grant of it, the grantor ceases to have any
interest in the property affected by the licence; B) When the licensee releases it,
expressly or impliedly to the grantor or his representative;
C) Where it has been granted for a limited period, or acquired on condition that it shall
become void on the performance or nonperformance of a specified act, and the period
expires, or the condition is fulfilled.

D) Where the property affected by the licence is destroyed or by superior force so

permanently altered that the licence can no longer exercise his right;
E) Where the licensee becomes entitled to the absolute ownership of the property
affected by the licence.
F) Where the licence is granted for a specified purpose and the purpose is attained or
abandoned or becomes impracticable;
G) Where the licence is granted to the licensee as holding a particular office,
employment or character, and such office employment or character ceases to exist;
H) Where the license totally ceases to be used as such for an unbroken period of
twenty years and such cessation is not in pursuance of a contract between the grantor
and the licensee;
I) In the case of an accessory licence, when the interest or right to which it is
accessory ceases to exist.
CONCLUSION
The conclusion that the term license implies nothing does not mean that there is no
law of licenses. There is license law, but it must be stated in terms of particular types
of cases. Where a licensor gives no reason to expect otherwise, the licensees
privileges can be terminated at will. Where a licensor manifests an intention that the
privilege shall be more enduring, the consequences depend upon other
circumstances. If it offends no legal policy, the license may create a true easement. If
it offends the rule requiring a sealed instrument, it will probably create an easement,
but the licensee can obtain relief only through equitable procedure. If enforcement of
the license would encumber the land with relatively useless burdens, neither the
parties expectations nor their formalities nor their expenditures will give the interest
the characteristics of an easement.
This simple rationalization of license cases is largely impeded by the ambiguous usage
of license to signify sometimes a transaction, sometimes a relationship. All the recent
writers agree that one of the usages should be adopted and the other rejected, but
disagree on which to adopt and which to reject.
Illustration (A):
An owner of a property enters into a lease thereof, but to avoid the rigours of Rent
Control legislation, calls it as a licence agreement. Though such a lease is captioned
as a `licence agreement', the terms thereof show that it is in essence, a lease. Such a
licence agreement which puts the licensee in exclusive possession of the premises,
untrammeled by any control, and free from any directions from the licensor (instead of
conferring only a bare personal privilege to use the premises) will be a lease, even if
described as licence. For example, if the exclusive possession of an apartment or a
flat or a shop is delivered by the owner for a monthly consideration without retaining
any manner of control, it will be a lease irrespective of whether the arrangement is
called by the owner as a `lease', or `licence'. As far as the person who is let into
exclusive possession, the quality and nature of his rights in respect of the premises
will be that of a lease or a tenant and not that of a licensee. Obviously such a
`licensee' cannot be `evicted' or `dispossessed' or prevented from using the premises
without initiating legal action in accordance with law.
Illustration (B):
The owner of a land constructs a shopping mall with hundred shops. The owner of the
mall earmarks different shops for different purposes, that is sale of different types of
goods/merchandise, that is shops for exclusive clothing for men, shops for exclusive
clothing for women, shops for hosieries, shops for watches, shops for cameras, shops
for shoes, shops for cosmetics and perfumes, shops for watches, shops for sports
goods, shops for electronic goods, shops for books, shops for snacks and drinks etc.
The mall owner grants licences in regard to individual shops to licensees to carry on
the identified or earmarked business. The licensor controls the hours of business,

regulates the maintenance, manner of display, cleanliness in the shops. The ingress
and egress to the shop licensed to the licensee is through the corridors in the mall
leading from three or four common access points/entrances which are under the
control of the licensor. The licensee is however entitled to stock the shop with brands
of his choice though he does not have the right to change the earmarked purpose,
entertain any clientale or customers of his choice and fix the prices/terms for his
goods. He can also lock the shop at the end of the business hours and open it
whenever he wants. No one else can trade in that shop. In such a case, in spite of the
restrictions, controls and directions of the licensor, and in spite of the grant being
described as licence, the transaction will be a lease or tenancy and the licensee
cannot be dispossessed or evicted except by recourse of law.
Illustration (C):
In a shopping complex or in a mall the owner gives a licence to a person to use a
counter to sell his goods in consideration of a fee. The access is controlled by the
licensor and there is no exclusive use of any specific space by the licensee. At the end
of the day, the licensee can close the counter. The space around the counter is visited
and used by customers to the mall and not exclusively by the customers of the
licensee. In such a case, if the licence is terminated, the licensor can effectively
prevent the licensee from entering upon his premises and the licensee will have no
right to use the counter except to remove his belongings. In such a licence it may not
be necessary for the licensor to sue the licensee for `possession' or `eviction'.
Illustration (D):
A much narrower version of a licence is where an exhibitor of cinematograph films, or
a theatre owner permits a `customer' or `guest' to visit an entertainment hall to view
and enjoy a movie or a show for the price of a ticket. The licensee is permitted to
occupy a seat in the theatre exclusively for the period of the show. Or a cloakroom
with toilet facilities in a public building permits a visitor to use the toilet/closet
facilities on payment of a fee. The licensee is permitted to use the toilet/closet
exclusively to relieve himself. In such cases, the licence is for a specific purpose and
for a specific period. The licensee has no other right to enter the premises, nor the
right to continue to occupy the seat in the theatre or use the toilet/closet continuously.
Such a licensee can be forcibly removed by the licensor if the licensee overstays or
continues to occupy the seat beyond the show, or refuses to leave the cloakroom. It is
not necessary for the licensor to sue the licensee. Illustration (E):
A reputed manufacturer of textiles owns several retail outlets in different parts of the
country. The outlets are housed in premises owned by the manufacturer or premises
taken by it on lease. The manufacturer employs a sales manager on salary for each
outlet to manage the outlet and sell its products and entrust him with the keys of the
premises, so that he can open the outlet for business and close the outlet at the end
of the day. Or the manufacturer, instead of engaging a sales manager, appoints an
agent who is permitted to sell only the products of the manufacturer in the retail
outlet, and receive a commission on the turnover of sales. The manufacturer
stipulates the manner of sale, and the terms of sale including the prices at which the
goods are sold. The manufacturer also checks the products sold periodically to ensure
that only its products (and not fakes) are sold. The manufacturer also reserves the
right to terminate the services of the sales manager/agent. In such cases on
termination of the services of the employee/agent, the manufacturer can physically
prevent the sales manager/agent from entering the retail outlet and make alternative
arrangements for running the outlet. There is no need to approach a court to `evict'
the sales manager/agent
CASE LIST
Associated Hotels of India Ltd. vs. R.N. Kapoor, [1960] 1 SCR 368 (Supreme
Court, 1959)
o A lease is a transfer of an interest in land. The interest transferred is called the
leasehold interest. The Lesser parts with his right to enjoy the property during

the term of the lease and the lessee gets that right to the exclusion of the
Lesser.
o In case of license, the legal possession continues to be with the owner of the
property, but the licensee is permitted to make use of the premises for a
particular purpose. But for the permission his occupation would be unlawful. It
does not create in his favour any estate or interest in the property.
Mrs. M.N. Clubwala v. Fida Hussain Saheb, [1964] 6 SCR 642 (Supreme
Court, 1964)
o Whether an agreement creates between the parties the relationship of landlord
and tenant or merely that of licensor and licensee the decisive consideration is
the intention of the parties. This intention has to be ascertained on a
consideration of all the relevant provisions in the agreement.
Chandu Lal vs. Municipal Corporation of Delhi, AIR 1978 Delhi 174 (Delhi
High Court, 1978)
o The intention of the parties is the real test for ascertaining the character of a
document.
o If a document gives only a right to use the property in a particular way but its
possession and control remains with the owner thereof, it will be a license. In
such a case the legal possession remains with the owner of the property, the
licensee being permitted to make use of the property for a particular purpose.
o Exclusive possession does not militate against the concept of a license, if the
circumstances negative any intention to create a tenancy.
o A license only makes an action lawful which without it would be unlawful, but
does not transfer any interest in favor of the licensee in respect of the property.
o In the case of a license there is something less than a right to enjoy the property
in the licensee, while on the other hand, in the case of a lease, there is a transfer
of a right to enjoy the property.
o A bare licensee having no interest in the property cannot maintain an action for
its possession.
Rajbir Kaur and Anr. vs. S. Chokesiri and Co. AIR 1988 SC 1845
o The question whether a transaction is a lease or licence turns on the operative
intention of the parties and there is no single, simple litmus test to distinguish
one from the other.
o The grant only for the right to use the premises without being entitled to the
exclusive possession thereof operates merely as a licence.
o Exclusive possession itself is not decisive in favour of a lease and against a
mere licence, for, even the grant of exclusive possession might turn out to be
only a licence and not a lease where the grantor himself has no power to grant
the lease.
Delta International Limited vs. Shyam Sundar Ganeriwalla & Another, AIR
1999 SC 2607
o To find out whether the document creates lease or license real test is to find out
the intention of the parties; keeping in mind that in cases where exclusive
possession is given, the line between lease and licence is very thin.
Municipal Corporation of Delhi vs. Pradip Oil Corporation and Anr., 100
(2002) DLT 442 (Delhi High Court, 2002)
o A mere license does not create interest in the property to which it relates. Lease
on the other hand, would amount to transfer of property.
o License may be personal or contractual.
o A licensee without the grant creates a right in the licensor to enter into a land
and enjoy it.
o By reason of a license, no estate or interest in the property is created.

A license, inter alia, (a) is not assignable; (b) does not entitle the licensee to sue
the stranger in his own name; (c) it is revocable and (d) it is determined when
the grantor makes subsequent assignment.
Madhu Behal and Anr. vs. Rishi Kumar and Anr., (2009) 3 PLR 628 (Punjab &
Haryana High Court, 2009)
o It is never a nomenclature in the document that governs the decision as to
whether a document as a lease or a licence.
o The essential feature that distinguishes a lease from licence is always a transfer
of interest in the demised property in a transaction of lease while a licensee
does not involve any such transfer of interest.
o The lease is heritable while license is personal to the grantee.
o The legal possession of the property is inevitably transferred to a tenant under
lease while in a transaction of license the legal possession continues with the
licensee and the licensee has a mere right of user of the premises in a particular
fashion mentioned under the document.
In Booker v. Palmer[xxix], Lord Green stated that-There is one golden rule to be
followed is that law does not impute an intention to enter into contractual
relationships where the circumstances and the conduct of the parties negative any
intention of the kind.
In Cubb v. Lane[xxx], Lord Denning said that-The question in all these cases is one
of intention: Did the circumstances and conduct of the parties show that all that was
intended was that the occupier should have a personal privilege with no interest in the
land.
o