DR.

RAM MANOHAR LOHIYA

NATIONAL LAW UNIVERSITY, LUCKNOW

ACADEMIC SESSION: 2020-21

Property Law-II: FINAL DRAFT

LEASE AND LICENSE-A COMPARATIVE STUDY

SUBMITTED BY: SUBMITTED TO:

Aakash Raj Chauhan. Dr. Abdullah Nasir

VIth Semester. (Faculty of law)

Roll No.180101002, Section-A Dr. RMLNLU Lucknow

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ACKNOWLEDGEMENT

This Paper has been prepared in partial fulfilment of the requirement for the
Subject: PROPERTY LAW II B.A.llb (hon.) (Sem. VI) in the academic year
2020-2021.

I owe a great many thanks to a great many people who helped and supported me
during the writing of this paper. Words are inadequate in offering my Professor
for his precious guidance. With his enthusiasm, his inspiration and his great
efforts to explain things clearly and simply, he helped throughout my analysis
of work with lots of encouragement, sound advice, and good innovation.

I know that despite my best efforts some discrepancies might have crept in
which I believe my humble professor would forgive.

Thanking you all,

Aakash Raj Chauhan

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RESEARCH METHODOLOGY

AIMS AND OBJECTIVES: In this present project researcher want to know

about:

• Lease
• Lcense
• Right and duties of lessor and lease

METHOD: In this present project researcher includes two types of research:

• Doctrinal
• Empirical

SOURCE OF DATA: In this present project researcher helped by only

secondary sources of data:

• Books
• Websites

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INDEX

I. INTRODUCTION ................................................................................................. 5

II. LEASE ........................................................................................................................... 6

• Definition .................................................................................................... 6
• Essentials ..................................................................................................... 6
• Features ..................................................................................................... 10

III. LICENSE .................................................................................................................... 12

• Definition ....................................................................................................12
• Types of license ......................................................................................... 13
• Features ..................................................................................................... 13
• Who may grant license ............................................................................... 13
• License when revocable.............................................................................. 14

IV. LEASE AND LICENSE: COMPARISON ........................................................ 15

V. CONCLUSION.................................................................................................. 18

BIBLIOGRAPHY…………………………………………………………………….20

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INTRODUCTION

A Lease is an agreement in which the landlord agrees to give the tenant the exclusive right to
occupy real property usually for a specific term and, in the exchange, the tenant agrees to
give the landlord some sort of consideration. A lease transfers to the tenant a leasehold
interest in the real property and, unless otherwise provided in the lease, a ease is transferable
and irrevocable. In other words, we can say that a lease is an agreement in which the owner
of property who transfer his property in favour of another for the certain time, i.e. called
Lease. And a license 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 Act itself. The license, when granted, has not
other effect to confer liberty upon the licensee to go upon the land which would otherwise be
lawful. Duration is essentials of every lease. The period or duration for which the right to
enjoy the property is being transferred is generally provided in the lease itself by mutual
agreement of the parties. Where the lease is otherwise valid except that its term is not given,
the term is fixed on the basis of local law and custom, if any. In the absence of any mutually
agreed term in the lease, local law or custom in respect of its of duration, the term of a lease
is ascertained under the provisions of section 106. This section also provides for termination
of lease. It means this section includes the termination of lease by expiry of term and also the
continuance of lease by renewal. In shanty Prasad devi v. Shankar Mehta1, The agreement of
lease provided for expiry before term and also its subsequent renewal of this lease. The
supreme court held that it was an „agreement to the contrary‟ within the meaning of section
of 116 (holding over – continuance of lease) therefore there cannot be implied renewal by
„holding over‟ on merely acceptance of rent offered by the lease. The court observed that
mere acceptance of rent by lessor on expiry of period of lease would not amount to assent to
the continuance of lease.

1
AIR 2005 S.C. 2905.
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LEASE

DEFINITION:

As per section 105 of Transfer of property Act, 1882 defined. - 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 transfer by the transferee, who accepts the transfer on such terms. It means
section 105 requires that lease is a transfer of „right of enjoyment‟ of an immovable property
made for a certain pe riod, in consideration of a price paid or promised to be paid or, money,
share of crops, service or any other thing of value to be given periodically or on specified
occasions to the transferor by transferee. It means we can say that Lease is not a transfer of
ownership in a property ,but it is transfer of an interest in an immovable property. It is not a
transfer of an absolute interest. Here in this case the transferor is called lessor and transferee
is called lessee. Price is called premium, and the money, share, service, or other thing to be so
rendered is called the rent2.

Essentials:

There are certain essentials elements of the lease:

• There must be two competent parties i.e., lessor and lessee.

• The subject matter of lease i.e., immovable property.
• The duration of lease
• The demise i.e., right to enjoy immovable property
• The consideration i.e., premium or rent.

The Supreme Court also stated these following essential ingredients of lease:

• There should be a transfer of a right to enjoy an immovable property;

• Such transfer must be a certain term, or perpetuity;
• The transfer should be in consideration of a premium or rent;
• The transfer should be a bilateral transaction, the transferee accepting the terms of
transfer.

2
http://coporatelaws.wordpress.com/2010/04/21/concept-of-leave-and-license-under-indian-law/
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There must be competent parties:

there must be two competent parties one is known as lessor and another is known as lessee.
Both parties are competent means both are competent to contract. Here lessor must have right
to transfer the possession of property. The lessor must have attained the age of majority and
must possess a sound mind at the time of granting a lease. The lessor not only competent to
contract but also he must have the authority to effect lease. In a lease there is not a transfer of
ownership but transfer of only possession. Therefore, not only the owner but also lessee
himself is entitled to grant lease. Since lease is right to transfer possession, therefore, a person
having only possession of immovable property is also entitled to grant lease provided it does
not extend beyond such person’s own possession. Lease by lessee is called sub-lessee,
derivative lease. Minor cannot becomes lessor. It means minor cannot grant lease. It means
lease granted by minor is void. Minor’s guardian of property is authorized to grant lease
without court’s permission for a term not exceeding five years or ensuring for more than one
year after minor’s attaining majority. Lessee must be competent to contract. It means lessee
must attain the age of majority and also sound mind. Lessee may be juristic person e.g., a
company or, registered firm, except unregistered firm.

The subject matter of lease:

The subject matter of lease must be specific immovable property. Immovable property has
been defined in section 3 of this Act. Therefore, not only land, building and minerals but also
the benefit arise of land such as fisheries, ferries etc. are also immovable property. There may
be composite leases also like lease of a building along with equipment and lease of a factory
along with machinery etc. Leased premises is not only a building of part of building but also
the land and other things appertaining to it and also furniture and other fixtures provided by
the landlord. In Annick chaymotidevyani v. prem mohini mehra3, The duration of lease :
There essential of lease is that the right to enjoy the property must be transferred for a certain
time, express, or implied or in perpetuity. It means in lease transfer the possession of property
for a certain period and beyond this given period lessee cannot retain property. The period for
which the right to use the property is transferred is called „term‟ of the lease. The term may
be any period of time, longer or shorter, even for perpetuity. But it must specified in the
deeds. The time form which the right of enjoyment begins and the time when it ends must be

3
2003 (1) RCR (Rent) 709 (Del).
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fixed and ascertainable. The lease may commence immediately after execution of deed or,
may commence with effect from a specified future date. The date of commencement may
depend on some future event. The specific mention of date or day is not necessary.

Lease in perpetuity: Lease in perpetuity is also called permanent leases. Duration is necessary
for every lease. Therefore, where a term of lease is neither fixed nor ascertainable by any
other method, the lease may be valid. In England lease in perpetuity is not permissible. In
India lease in perpetuity is permissible and have been in practice since long. Such leases may
be created either by express words or by necessary implication. In chapsibhai v.
puroshottam4, in this case Supreme Court observed that in such case a lease is a permanent
lease because the rights of lessee or tenant are heritable; such leases are not intended to be
only for the life-time of lessee. The Supreme Court emphasized that a lease deed has to be
read as a whole. The court said that the presence of an absolute discretion to resume the land
without assigning any reason and absence of any express grant in perpetuity and absence of
consideration militate against the deed in question being construed as a lease in perpetuity.
The court also observed that a provision for determination of the lease because of a specified
breach was no way comparable to the reservation of an absolute right to resume at will
without assigning any reason in a lease without consideration. Accordingly, the lease in
question was held to be not a lease in perpetuity.

The demise: The demise i.e., right to enjoy immovable property. Lease is a transfer of right of
enjoyment in an immovable property. It is a not a transfer of ownership; it is transfer to
partial interest. Ownership or absolute interest is aggregate of several interests. In a sale, gift
or exchange absolute interest is transferred. In mortgage only partial or limited interest is
transferred for securing the debts.

The consideration: The contract of lease must be supported with some consideration.
Consideration in a lease may be premium or rent. Where the whole amount to be recovered as
consideration from the lessee is paid by him in lump sum, (at one time) the consideration is
called premium. For example, where A executes a lease of his land to B for one year and
takes RS. 1200/- is the premium. It is to be noted that apparently this may look like
usufructuary mortgage because B gets possession of land for advancing RS. 1200/- to A. But
the transaction is nevertheless a lease and not mortgage because the land is held by B not by
way of security for repayment of any loan. Consideration paid periodically is called rent of

4
AIR 1971 S.C. 1878 .
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lease. Rent need not be necessarily in the form of money. Under this section, rent may be
paid in the form of services rendered by lessee to the lessor. Rent fixed for the lease must be
certain.

Features:

i.There is a written agreement setting out the terms of occupation;

ii. The area of occupation is precisely defined;

iii. The occupier enjoys exclusive occupation - it is not shared (except with other tenants);

iv. There are no services included in the money paid for occupation - but they might be

stated as a separate item;

v. The money paid does not cover a host of property outgoings too;

vi. The property owner cannot terminate the occupation on very short notice;

vii. In the round, and subject to the terms of the arrangement, the occupier is in a position to

say what goes on in the property.

Rights and Liabilities of the lessor:

• The lessor is bound to disclose all material defects in the property to the lessee. he
must also disclose all the known latent defects in the property to the lessee. However,
he need not disclose the defects which are discoverable with ordinary care. This based
on the principle of "Caveat Emptor".
• The lessor is bound to put the lessee in possession of the leased property. The lessee
however must first request the lessor top out him in possession. If the lessee does not
do so and fails to take possession, then he must not pay the rent for lease.
• The lessor must indemnify the lessee for all losses incurred by the latter due to the
interruption in the enjoyment of the property. In other words, it is an implied covenant
that lessee will have free and quiet enjoyment of the property. The covenant for title
runs with the land.
• If the lessor transfers the leased property, then the transferee gets all the rights and
liabilities of the lessor. However, for making the transferee liable, the lessee must

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 elect to treat the transferee as the person liable to him. Further, the transferee is not
entitled to any arrears of rent due before the transfer.

Rights and Liabilities of the Lessee :

• During the continuation of the lease, if any accession is made to the property, then
such accessed property must also be returned with the main property to the lessor. In
other words, "Accessory follows the principle" in the accessed lands.

• If part of the property is destroyed by fire then the lease becomes void at the option of
the lessee. However, such destruction of the property must not be due to the wrongful
act of the lessee.
• If the lessor neglects to make sufficient repairs even after notice by the lessee. The
lessee can make such repairs himself and can deduct the expenses of such repairs with
interest from the rent.
• If the lessor neglects to make payment of revenue, tax, etc., then the lessee can make
such payment and deduct such payments from the rent with interest or recover the
amount from the lessor with interest.
• After the termination of the lease, the lessee can remove all the things, which he had
attached to the earth but the must leave the property in the same state as he received it.
• If the lease is terminated by some uncertain events, then the lessee or his legal
representatives can get all the crops harvested by them and to have ingress and egress
together with the produce and carry them.
• The lessee may sub lease or mortgage the property in the absence of any express
provision in the lease deed.
• The lessee is bound to disclose to the lessor any material increase in the value of the
property known to him only.
• The lesee is bound to pay the premium or the rent to the lessor or his agent at the
proper time or place.
• The lessee is bound to keep the property in good condition. He must return the
property in the same condition as he obtained it. He must allow the lessor and his
agent to enter upon the land and inspect the condition of the land at all reasonable
time of the day. He must give notice of all the defects in the land to the lessor.

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 • The lessee must use the property as a person of ordinary prudence. He must not use
the property for any purpose other than the purpose for which it was leased.
• If the lessee becomes aware of any encroachment on the property, he must given
immediate notice to the lessor for taking steps against such encroachment.
• The lessee must not construct any permanent structure on the leased property without
the lessor's constant. But for agriculture purpose he can construct such permanent
structure, even without the constant of the lessor.
• After the termination of the lessee, the lessee is bound to return the leased property to
the possession of the lessor.

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LICENSE

A license 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 Act itself. The license, when granted, has not other effect to
confer liberty upon the licensee to go upon the land which would otherwise be lawful.

As per Section 52 of Indian Easement Act, 1882 defines License 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 license.”

Types of license:

There are three types of license:

Bare licenses: A bare license is a license which is not supported by any contract, such as
gratuitous permission to enter a house. It can revoked at any time provided reasonable notice
is given to the licensee to withdraw; otherwise, the licensor may be liable in damages.

Contractual licenses: a contractual license is granted under the terms of some contract
which restricts the right of licensor to revoke the license, e.g. ticket to see a match.

Position relating to contractual licenses was summarized by MEGARRY, J. in Houselow

LBC v Twickenham Garden Development Ltd. In these words:

i.A license to enter land is a contractual license, if it is conferred by a contract; it is

immaterial whether the right to enter the land is the primary purpose of the contract or is
merely secondary.

ii. The willingness of the court to grant equitable remedies in order to enforce or support a
contractual license depends on whether or not the license is specifically enforceable;

iii. A contractual license is not an entity distinct from the contract which brings it into being;
but merely one of the provisions of that contract; and

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iv. Even if a contractual license is not specifically enforceable, the court will not grant
equitable remedies in order to procure or aid a breach of the license

Coupled with an interest:A license coupled with interest involves two things, namely, a
license to enter the land and the grant of an interest, e.g. a right to irrevocable and assignable,
but only as an adjunct of the interest with which it is coupled.

Features:

A license is not connected with the ownership of land / property but creates only a personal
right or obligation;

• A license cannot be transferred or assigned;

• License is purely permissive right arising only by permission, express or implied, and
not by adverse exercise or in any other way;
• It only legalize a certain act which would otherwise be unlawful and does not confer
any interest in the property itself in or upon or over which such act is allowed to be
done;
• The landlord has not set up the arrangement with a view to avoiding the obligations
he would have if the arrangement was a lease;
• The area of occupation may not be precisely defined;
• The occupier shares some or all of the occupation, probably with the landlord;
• Some services are included in the licence fee - Council rates, electricity or ironing!
• Furniture, fixtures and fittings are included in the deal.

Who may grant license: As per section 53 requires that a license 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 license.

License when revocable: As per section 60 provides that a license may be revoked by the
grantor, unless-

• It is coupled with a transfer of property and such transfer is in force;

• The license, acting upon the license, has executed a work of a permanent character
and incurred expenses in the execution.

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In Shankar Gopinath Apte vs. Gangabai Hariharrao Patwardhan, it was held that the contentin
on behalf of the appellant was that he must be deemed to be a licensee of the respondent and
since he had executed work of permanent character on the land involving heavy expenses, the
license would be irrevocable under section 60(b) of the easement Act, 1882.

The principle behind section 60 is that if a person allows another to build on his land in
furtherance of the purpose for which he had granted license, subject to any agreement to the
contrary, he cannot turn round later on to revoke the license.

Revocation may be express or implied as per section 61 because this section talks about
revocation express or implied. It means the revocation of a license may be express or implied.
In S.J . Pande vs. P.K. Balakrishnan, it was held that on determination of contractual tenancy,
statutory tenant ceases to have any assignable interest in the property and as such license
granted by him prior to the determination of tenancy would be „deemed to be revoked‟ under
section 62. Because as per section 62 of easement Act, 1882talks about license deemed to be
revoked when, it means a license deemed revoked under certain situation:

i. When, from a cause preceding the grant of it, the grantor ceases to have any interest in the
property affected by the license;

ii. When the licensee releases it, expressly or impliedly, to the grantor or his representative;

iii. Where it has been granted for a limited period, or acquired on condition that it shall
become void on the performance or the non performance of a specified act, and the period
expires, or the condition is fulfilled;

iv. Where the property affected by the license is destroy or by superior force so permanently
altered that the licensee can no longer exercise his right;

v. Where the licensee becomes entitled to the absolute ownership of the property affected by
the license;

vi. Where the license is granted for a specified purpose and the purpose is attained, or
abandoned, becomes impracticable;

vii. Where the license is granted to the licensee as holding a particular office, employment or
character, and such office, employment or character ceases to exist;

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viii. 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;

ix. In the case of an accessory license when the interest or right to which it is accessory
ceases to exist.

LEASE AND LICENSE: COMPARISON

All property transactions are governed very strictly by statutory regulation. Tenants are
afforded the most protection as they are in a weaker negotiating position.

This article will be useful reading to both tenants and landlords. It is important that you have
the right agreement in place and that you know your rights and responsibilities. Choosing
between a lease and license is simply a choice of convenience. Some situations suit a lease
document better, some suit a license.

When to choose a lease:

Here are two examples of leases for illustration purposes:

• If someone occupies your house as a holiday home, they are not protected by the
legislation regarding leases. However, if they sell their house and come to live in
your holiday home, they are protected under the lease agreement legislation!
• Similarly, if you let your land to a farmer, he is protected. If you let it to your
neighbor to graze her horse, she is not protected.

As illustrated, each situation is unique. An arrangement where I allow you into possession of
my property in exchange for a rent payment is, on the face of it, a lease or tenancy agreement
(these words mean much the same thing). A lease constitutes a continuing agreement, not a
short term one.

When to choose a license:A license generally comes out of the regulations provided by
statute and the situation is veryinformal. A lease creates “an interest in land”; a license does
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not. With a license, the property owner is effectively saying “OK, you can occupy my
property for a while, but I can interrupt at any time and ask you to leave.” To a property
owner, the advantage of a license is that in certain circumstances, it is easier to exercise
control. The disadvantage is that if the arrangement is to stay outside the regulated
environment (and provide you with the associated benefits of flexibility), it must not be
dressed in the clothes of a lease.

So, if an issue about a license comes to court, the judge wi ll “prefer” treating it as a lease (so
giving the protection to your licensee that he would have if he was a tenant). If you want your
deal to be a license, not a lease, you have to make sure you do not accidentally add terms, or
even phrases, usually found in a lease. There are some general rules about when to choose a
licensee and when to choose a lease. If your scenario is not included in the list of license
indicators below, treat it as a lease (as this is the way it will be interpreted in a court). Net
Lawman does not see it as part of our task to involve you in litigation - on the contrary, we
try to keep you as far away from court as possible. All our documents are set up for a safe
scenario. We do supply license forms, but only for situations where the circumstance are
“cast iron” in favoring the interpretation of license. While the label the parties put on the
document is a factor, it is by no means conclusive. What matters is whether the terms of the
transaction are characteristic of a license or of a lease. Unfortunately, there are no set rules.
The court will look at each case separately, so just very roughly.

These characteristics point to a lease:

• There is a written agreement setting out the terms of occupation;

• The area of occupation is precisely defined;
• The occupier enjoys exclusive occupation - it is not shared (except with other
tenants);
• There are no services included in the money paid for occupation - but they might be
stated as a separate item;
• The money paid does not cover a host of property outgoings too;
• The property owner cannot terminate the occupation on very short notice;
• In the round, and subject to the terms of the arrangement, the occupier is in a position
to say what goes on in the property.

These characteristics point to a license:

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 • The landlord has not set up the arrangement with a view to avoiding the obligations
he would have if the arrangement was a lease;
• The area of occupation may not be precisely defined;
• The occupier shares some or all of the occupation, probably with the landlord;
• Some services are included in the license fee - Council rates, electricity or ironing!
• Furniture, fixtures and fittings are included in the deal;12
• The owner can terminate the occupation on little or no notice.

DISTINCTION BETWEEEN LEASE AND LICENSE

The main test for deciding whether a person is a licensee of a property or a lessee is that of
exclusive possession, though it may not be the only test. If the right granted conveys to the
grantee an exclusive right of possession, though subject to certain reservations, if shall be a
lease as opposed to license. But where the grantee can only use the property in a certain way
and on certain terms while the property remains in the possession and control of the owner,
the right granted shall be a license.

• A lease gives an exclusive interest in the property whereas license does not;
• A lease can be assigned to a third person, while a license being a personal right cannot
be so assigned / transferred;
• A lessee can bring an action for trespass in his own name but a licensee cannot do the
same. He must do so in the name of the licensor after obtaining his permission.
• A lease is not revocable whereas a license is revocable except in two case mentioned
in Section 60 of Indian Easement Act, 1882 (We shall de discussing this aspect of
license later in the post).

In the case of B.M. Lall vs. M/s Dunlop Rubber Co., summed up the distinction between
license and lease as under:

“A lease is the transfer of right to enjoy the premises whereas as license is a privilege to do
something on the premises which otherwise would be unlawful. If the agreement is in writing
it is question of construction of the agreement having regard to its terms and where its
language is ambiguous, having regard to its object, and other circumstances under which it
was executed whether the rights of the occupier are those of a lessee or licensee. The

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transaction is a lease if it grants an interest in the land; it is a license if it gives personal
privilege with no interest in the land. The question is not of words but of substance and the
label which parties chose to put upon the transaction though relevant is not, decisive. The test
of exclusive possession is not conclusive though, it is very important indication in favour of
tenancy.”

CONCLUSION

A license 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. The normal clauses in lease agreements, if
incorporated in the leave and license agreement, shall not hold good in the eyes of law unless
some specific structuring is done to ensure the validity of such clauses.

“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 the immovable property of the grantor, something which would, in
the absence of such right be unlawful, and such right does not amount to an easement or an
interest in the property, the right is called a licence.”

If we focus our attention only upon the question of rights in the above two definitions, we
find that in both cases there is a transfer of a right. It may be noted that in a lease the Right
consists in enjoying such property transferred, and so also in a licence the Right consists in
doing something in or upon the immovable property of the Licensor, though without the
creation of an interest in the property. Although it is not clearly stated that a lease creates an
interest in the property, inasmuch as the opposite is stated in case of a licence, yet by judicial
dicta we have come to believe that a lease creates an interest in the property merely to
highlight a contradistinction between a lease and a licence. We have, therefore, imputed such
creation of a right or interest in the property, not due to the existence of a positive statement
to that effect in the definition of a lease, but merely because of the statement of its non-
creation in case of a licence. This imputation of the creation of a right in the property in case
of lease, is in reality a high overtone because all that follows from the definition is that the
transfer is solely of 'a right to enjoy' which is equivalent to the 'right to do so, in or upon the

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immovable property,' as stated in the definition of a licence. Considering that the Transfer of
Property Act and the Indian Easements Act, were both passed in the same year, 1882,
obviously the concept of a Right would not have been different. We cannot conceive that a
lease gives a right to enjoy the property in any manner the transferee feels best, as against a
licensee who could have his rights directed in a particular manner as per the terms of the
grant. In fact, we are quite settled on the principle that if a tenant does any
alteration/modification/improvement, etc., he does so at his own risk, since he does not have
any property rights over the subject-matter of the demise, and he would not be allowed to
contend that he had rights in the property due to which he did the alteration/modification. As
long as he keeps on paying the rent, the dichotomy of owner and tenant shall subsist and
consequently his interest in the property is in no way better or, is as precarious as that of the
licensee. As against this, we find that Section 60(b) of the Easements Act clearly states that a
licence becomes irrevocable when "the licensee, acting upon the licence has executed a work
of permanent character and incurred expenses in the execution", which goes to show that a
licensee can create rights in the property, or, for every practical effect, he is on a safer
position than a tenant, whose tenancy could always be terminated with an appropriate notice
as provided in Section 106 of the Transfer of Property Act. No doubt, we can still argue that
the security in tenure of the licensee arises not by virtue of the creation of "an interest in the
property" but in the creation of a right over the property, i.e. his rights are purely above the
surface of the land, as against the rights of the owner which lie from the surface to below. But
if we adopt this argument, we reach a paradoxical situation. We conceive that the interests of
the licensee restricts only to the structure above the surface. Then, does the structure have no
foundation? Aren't these foundations embedded in the soil? Is this not immovable property?
Does not this structure with its foundation constitutes an integral whole? Can we then
conceive immovable property as layers of movable property put together? The obvious
answer is "NO". The conclusion is that a licensee can acquire interest in the property if he,
under the licence, puts up a work of permanent character and incurs expenditure. The
statement, therefore, that a lease alone creates interest in the land and that the licence does not
so create, is definitely a high overtone due to the laying of too great an emphasis on the
words "does not amount to an easement or an interest in the property" as found in the
definition of a licence, as against its absence in the definition of a lease.

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BIBLIOGRAPHY

1. Shukla, S.N. Transfer of property Act , Allahabad law agency: Allahabad; 2011.

2. Singh Avtar, Text book on the transfer of property Act , Universal law publishing co.
NewNDelhi; 2005.

3. Sinha R.K., Transfer of property act , Central law agency: Allahabad; 2010.

4. Sharthi VEPA P., Law of transfer of property (Easement, Trust and wills), ALT
publishing: Hyderabad; 2008.

5. Kader S.A., Law of easements and licenses, Eastern law house: Kolkata; 2003.

6.http://www.boddunan.com/articles/education/21-law-a-legal/7439-rights-and-liabilities-
oflessor-Nand-lessee.html

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