This article is written by Parul Chaturvedi, from Dr R.M.L Law College, Bangalore. In this article, the author talks about the Indian Easement Act 1882, Section 52 and the relevant provisions to understand the concept and grant of licence in India. This article aims to differentiate between leases and licence along with licence and easement with a suitable illustration to understand how it deals with particular situations and cases.
The term ‘easement’ is derived from the old Latin word ‘aisementum’ meaning ‘comfort, convenience or privilege’ and evolved into ‘a legal right or privilege to use anything other than one’s own’ from an early easement. It is the granting of a non-possessory property interest that grants the easement holder permission to use the land of another person. It is referring to the right that a man would sometimes have a licence is a personal right and granted to the individual doing something on the grantor’s immovable property is not creating value on the property itself. This is strictly a permissive right, which is the grantor ‘s personal privilege. This does not impose any duties and responsibilities on the individuals making the grant and is thus revocable except in such conditions specifically provided for in the Act itself. When granted, the license has no other effect of giving the licensee freedom to go to the land that would otherwise be lawful.
Section 52 of Indian Easement Act, 1882 defines licence as something in which a person grants another, or a certain number of other persons, the right to do or continue to do in or on the grantor’s immovable property. This principle was incorporated into the Indian Easements Act of 1882. Section 52 till Section 64 of the Indian Easements Act, 1882 are concerned with licenses and their administration. Unlike a Lease, a license is merely a right to allow the use of the subject land. Lease involves the transfer of possession of the property/land area to the lessee. A lease implies to give the lessee the possession of the premises/land area. The lessor shall retain only the right of possession of the subject land unless otherwise agreed. On the other hand, the license is merely given permission and that authorization does not require the full ownership right to the property in question. The licensor reserves the legal as well as the physical right of possession in a licence.
The licensee has only the right to use it in terms of the license agreement for the purpose it was agreed upon. The legal principle is that the courts seek to infer the parties’ purpose to decide whether the parties agreed to create a lease or license. A lease and license agreement should be carefully drafted with great care in order to project that the parties only intend to create a license agreement and not a lease agreement. The absolute possession of the subject property should never be handed over the licensee, for otherwise, the agreement may be construed as a lease Agreement.
As per Section 52, if a person gives or proceeds to do in or on the grantor’s immovable property anything that may be unlawful, or the rights are not easement or interest in the land, to another person or a certain number of certain people, in the absence of such right is called a license.
The license, in a popular sense, means three things:
- Authorization to do it,
- Certificate or document embodying the authorization in question, and
- License fee which is the price granted for the privilege.
Essentials of a licence
- Two different persons.
- There has to be a grant.
- License is always useful.
- License is granted to do something in or upon the grantor’s immovable property.
- The license does not relate to ownership of any land but only creates a personal right or obligation.
Associated Hotels of India v. R.N. Kapoor
According to Section 52, as stated in the case, where an agreement only allows the right to use the land in a specific manner or under certain conditions while it remains in the possession and control of the owner, thereof, it shall be a licence. Therefore, legal possession remains with the property’s owner, but the licensee is allowed to use the premises for a particular purpose.
But his occupation would be unlawful for the permission. This does not establish any estate or interest in the property in his favour. Therefore, the distinction between the two concepts is clear. The dividing line is clear though it gets very thin or even blurred at times. At one time, the application of the exclusive possession was considered unfailing and if a person was granted exclusive possession of a premise, it would be conclusively proved that he was a lessee.
It is important to take note of the essential features of licence as under:
- A licence does not apply to land or property possession but merely provides a legal right or duty.
- Licence only tends to create a title or interest in the immovable property to do something under the authority of the licence.
- Licence neither can be transferred nor assigned.
- The Licence shall be a strictly permissive right that occurs through permission, express or implied, and not by adverse exercise or otherwise.
- It only legalizes a certain act that would otherwise be unlawful and does not grant any interest in the property itself in or upon or over which such an act is carried out.
- A licensee cannot sue outsiders on his behalf.
Errington vs Errington
If we talk about the facts of this case, in 1930, a father purchased a house along with his son and daughter-in-law (Wood) and told her that the downpayment was a gift from him and said, “After his retirement, the house would be transferred to them when the mortgage is paid.” Wood regularly paid mortgage instalments, but Errington left the property in his wife’s name after his death. Later, both Wood and son of Errington split. Errington was sued for possession of the property. So the issue arose if after the death of the offeror, can a unilateral contract be cancelled. However, the appeal was dismissed by the Court.
The Court ruled that the son and daughter-in-law had no explicit obligation to pay the instalments and the Court could not infer those terms. He characterizes the pledge of the father as a unilateral contract; the performative act that pays for the mortgage and hence it will only be revocable if the couple did not make the payments. The offeror cannot cancel the offer once success has begun. The implicit purpose of the father was to hold the house in their hands if the mortgage was paid for. The pair were on a lease, short of a tenancy, but a statutory or at least equal right to live that would develop into a good equal title until the mortgage was paid.
Difference between Lease and Licence
Creation of interest in the property
No passing of interest in the property
The lease gives the tenant a right to exclusive possession
The license confers no such right to the licensee
The lease is transferable and revocable
Licence is non-transferable and non-revocable
Difference between Licence and Easement
Right in Personam
Right attached with the property
Revocable on the will of grant
Not revocable at the will of grant
Continuous use not necessary
Continuous use necessary
Transferability of a License and Grantor’s responsibility to report defects
- It is essential to understand Section 52.
- It is amply clear that a license cannot be transferred by the licensee or exercised by its servants or agents.
- In the case of a license, the only exception was made to visit a public entertainment place. In such a situation, a license can be transferred if there is no other exception, i.e. a contract can impose a negative limitation on license transferability.
- In other terms, a license other than a license to visit a public entertainment place cannot be transferred by the licensee or his servants or agents unless a particular intention is stated or implied.
- A sells to B the trees that grow on his property. B has the right to go to land and take the trees down.
- A grants B the right to walk in his field whenever he wishes. No immovable property of B is annexed to the right. The right is non-transferable.
In the case of a license agreement between the property owner (licensor) and tenant (licensee)
- A property owner enters into a lease of it but in order to avoid the rigours of the Rent Control law, he calls it as a license agreement.
- Although such a lease is described as a ‘license agreement’, its terms indicate that it is essentially a lease.
- Such a license agreement, which places the licensee in exclusive possession of premises free from any control and free from any direction by the licensor, will be a lease, even if it is described as a licence.
- For example, if the owner provides an exclusive possession of an apartment or flat or a shop for a monthly consideration without any form of co-operation, it will be a lease regardless of whether the owner calls the arrangement a ‘lease’ or a ‘license.’
- As far as the person left in exclusive possession is concerned, the quality and essence of his rights over the premises would be that of a lease or a tenant and not that of a licensee.
Such a licensee cannot be evicted, dispossessed or prevented from using the premises without lawful action.
In case of Licenses between mall owner Licensor and Licensee shop owner
- The landowner creates a market with a hundred stores. The owner of the mall allocates numerous shops for specific reasons, i.e. to sell different types of products/commodities.
- The mall owner grants licenses to licensees to carry on the identified or designated business in relation to individual shops.
- The owner tracks operating hours which controls maintenance in the shops.
- The licensee is, therefore, entitled to stock the shop with his choice of brands but he does not have the right to alter the intended intent, retain any consumer of his choosing and to set the price/conditions for his products.
- He can also lock the shop and open it whenever he wants at the end of business hours. In that shop, nobody else can trade.
In this case, the agreement is a loan or leasing and the licensee cannot be dispersed or expelled except by the recourse to law notwithstanding the licensee’s limitations and controls and instructions and notwithstanding the grant being identified as a licence.
In case of license permit person to use a counter to sell his goods in a shopping mall
- The owner gives a person a license to use a counter in order to sell his goods at a price in a shopping complex or in a shopping mall.
- The licensee controls the access and the licensee does not use a particular space exclusively.
- The holder will close the counter at the end of the day.
- Customers and not just licensee customers can visit and use the room around the counter.
- In such a case, the licensee will effectively prohibit the licensee from accessing its premises. If the license is revoked, the licensee shall have no right to use the counter except to remove any goods.
Under such a licence, the licensee may not be required. Under this licence, the owner does not have to sue a possession or elimination.
License between exhibitor of cinematograph films or theatre and customer/guest
- A far smaller version of a license is where a cinematographic film exhibitor or theatre owner allows a customer or guest to visit an exhibition hall to see and enjoy a movie or show at a ticket price.
- The licensee is allowed to occupy a seat exclusively for the movie’s time frame in the theatre.
- A cloakroom in a public building with toilet facilities enables a guest to use the toilet/closet facilities after payment of a fee.
- The licensee shall be required solely to use the toilet/closet to relieve himself.
- The license is for a particular reason and for a limited period of time in these situations.
- The licensee has no other permission to access the premises, nor the right to continue using the seat in the theatre, or to regularly use the toilet/closet.
Such a licensee can be physically withdrawn by the licensor if the licensee stays past the show or continues to occupy the position or refuses to leave the cloakroom. The licensor isn’t allowed to sue the licensee.
The fact does not mean that there is no license rule for the term license as described. There is a licensing law but it has to be stated in terms of specific types of cases. Where a licensor does not give cause to expect otherwise, the privileges of the licensee may be terminated at will. Where a licensor expresses an intention of making the right more permanent, the consequences depend on certain circumstances. The license will establish a true easement if it offends no legal regulation. Unless it offends the law requiring a sealed instrument, it would potentially establish an easement but only by the fair process will the applicant seek relief. If the enforcement of the license places a relatively useless burden on the land, neither the expectations of the parties nor their formalities nor their expenditure will give the interest the characteristics of Easement Act.
LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join: