In this blog post, Pramit Bhattacharya, a student of Damodaram Sanjivayya National Law University writes about the concept of license. This post discusses the types of license and the modes of obtaining such licenses. The difference between license, lease and easement is also explained in the post.
The term license is very common in today’s world. Even a layman knows the term and to him, a license signifies a transaction of some sort between some specific parties. But the legal and jural meanings are rarely considered. Earlier license was considered as the landlord’s consent to the licensee to use his land, where the licensee could use the land without trespass. In modern times, a license can be considered as validation by the licensor to the licensee to carry out activities on his property, which without entering the property of the owner would be considered illegal.
License under Indian Law
Under the Indian Law, a license is governed by the Indian Easement Act, 1882. Section 52 of the Act defines license as a permission by one person to the other or a group of people to carry out any activity on the property of the grantor, which without such permission from the grantor would be considered unlawful. Interpreting section 52, it can be said that when a person is given the right to use a particular property for certain use, while the possession and control of the property are with the owner, the person will be considered as the licensee. A license can be granted to only a definite number of people, as a license is a personal right given to the licensee. Section 56 of the Easement Act also states that a license cannot be transferred by a licensee or the right under the license be exercise by his servants or agents. In the judicial pronouncement of Associated Hotels of India Ltd. v RN Kapoor, the Apex Court gave a definition of a license. The Court stated that when a document only gives the right to use a certain property in a certain way, it’ll be considered as a license. The licensee is entitled to use the premises only in a specific manner. Without the permission, his activities would be considered unlawful. The essential features of a license can be thus summarized as-
- A license does not create an interest in the property. It acts only as permission which created a personal right with regards to the property.
- A license authorizes certain acts on the property which would be otherwise unlawful.
- A license cannot be assigned or transferred to some third party.
Types of License
License are generally of two types-
- Bare license
- License coupled with a grant.
A bare license can be defined as a personal consent which is granted without any consideration. A bare license can be revoked at any time. A bare license acts as a defense to the act of trespass. If a person is allowed to enter a property for some particular purpose, but on entering the property does something else, it’ll be considered as an act of trespass. When one party grants another party to carry on some activities on the land without changing the nature of the land, it is a bare license.
License coupled with grants
A license coupled with grant or interest means that the permission is given to carry on activities in the property or premises of the other for the purpose of earning some profit and exploit the interest given in the land. For instance, the government gives license to contractors to enter a forested area to collect timber. A license coupled with a grant is assignable, and it also cannot be revoked at any time. The parties must give each other some reasonable time before the permission is revoked.
Granting of license and Implied & Express license
Under the Indian law, the provisions governing the granting of a license are section 53 and section 54 of the Easement Act. Section 53 talks about the question of who may grant a license. Section 54 states that a license may be granted in an express or implied manner.
Section 53 of the Act states that any person can grant a license who in a particular situation can transfer his interest in the property which is affected by the license. In simpler words a person cannot grant license rights if he does not have sufficient legal interest in the property. The power to grant a license co-exists with the power of transferring of interest. Section 53 also states that a person can grant a license to the extent he can transfer his interest in the property. Interpreting this part, it can be said that if a person is not the owner of property, but he has some interest in that property, even he can grant a license to the extent of his interest. Therefore, even a co-tenant or a mortgagee can grant a license to a third party. A tenant can also grant a license, but this right is limited only to the extent of his interest in the property, i.e. the tenancy rights. A tenant cannot transfer the interest which goes beyond the term of the lease.
Section 54 of the Indian Easement Act states that a grant of license may be express or implied. It depends on the conduct of the grantor. Many times it so happens that the owner of a property creates an agreement for easement, but it may turn out to be an implied license. Thus, the owner of a property should take proper care to differentiate between the permission he is giving, because due to his behavior the opposite party may get a license even though a formal agreement was never created. But in such a case, the co-tenant or mortgagee should be in the sole possession and enjoyment of the property.
A license may be an implied license due to the conduct of the owner of property, who may allow some other person to carry on activities on his property. For instance, a shopkeeper allows a customer to enter the shop and enter into a transaction with him. An implied license may also rise due to the reasonable belief of the licensee that the licensor has consented to certain acts on his property.
In the case of express license, some direct authorization is given to the licensee to carry on activities on the property. Express license are more specific than implied license, as in the case of express license specific terms and conditions are mentioned.
Difference between license and lease
The concept of lease is governed by the Transfer of Property Act, 1882. Section 105 of the Act defines what is meant by a lease. According to the provision lease means a transfer of the right to enjoy the property, for a fixed time and in lieu of some consideration or price. The person who transfers the rights is known as the lessor and the person to whom the rights are transferred is known as the lessee. The question which arises here is that what the difference between a lease and a license is? In simple words, it can be said that the difference lies in the intention of the parties, and the fact that whether any exclusive possession has been given or not. In the case of Section 52 of the Easement Act, no exclusive possession is given to the opposite party. Therefore, if exclusive possession is missing, it cannot be a lease and will be considered as a license. The difference between the two can be summarized in the following points-
- In the case of a lease, the right to enjoyment is transferred, i.e. exclusive possessory rights. In the case of a license, a mere permission is granted without any transfer in interest or rights.
- A lease can be both heritable and transferable. But on the other hand, a license is neither heritable not transferable.
- In the case of a lease, the parties are entitled to any accession or improvement made to the property. In the case of a license, no such entitlement is there.
- In the case of a contract of lease, the lessee has the right to protect the possession in his own name. In the case of a license, the licensee does not have the right to defend the possession in his own name as no proprietary rights are transferred.
Difference between license and easement
An easement is similar to a license, but easement is a bit trickier. In a case of easement also there is a consent or permission of the owner of the property. But here the easement holder gets some interest in the property. For instance, if X grants permission to his neighbor Y to plant flowers on a patch of land on his property during his lifetime it’ll be considered as an easement right. So it can be said that where a license is just a personal right, an easement is a right pertaining to the property. Also, in the case of a license, the licensee gets only right in personam. But easement rights are rights in rem and can be enforced against the whole world. An easement can be both positive and negative in character, but a license cannot be negative in character.
AIR 1959 SC 1262