HIMACHAL PRADESH NATIONAL LAW

UNIVERSITY

LAW OF PROPERTY

LEASE, LICENSE AND EASEMENT: UNDERSTANDING

CONCEPT AND USES

SUBMITTED BY: SUBMITTED TO:

SHASHWAT SRIVASTAVA MS. NAVDITYA TANWAR
1020171828

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 ACKNOWLEDGEMENT

Every project big or small is successful largely due to the efforts of a number of wonderful
People who have always given their valuable advice or lent a helping hand. I sincerely
appreciate the inspiration; support and guidance of all those people who have been Instrumental
in making this project a success.

I, Shashwat Srivastava, the student of H.P. National Law University (Shimla), am extremely
grateful to H.P. National Law University (Shimla), for the confidence bestowed in me and
entrusting my ability.

At this juncture, I feel deeply honoured in expressing my sincere thanks to Ms. Navditya
Tanwar for making the resources available at the right time and providing valuable insights
leading to the successful completion of my report. Last but not the least I place a deep sense
of gratitude to my Family members and my friends who have been a constant source of
inspiration during the Preparation of this project.

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 Lease
Introduction
Lease is one of the most important mode of transfer of immovable property after sale and
mortgage. The fundamental conception of a lease is that it is the outcome of the rightful
separation of ownership and possession. Before the lease the owner had the right to enjoy and
possession of the land but by the lease, he excludes himself during its continuance from that
right. A lease is, therefore, not a mere contract, but is a transfer of an interest in land. Lease
creates a right in rem.

Possession is the continuing exercise of a right and although a right is normally exercised by
the owner of it, it may, in special case, be exercised by somebody else. This separation of
ownership and possession may be either rightful or wrongful, and, if rightful, it is an
encumbrance which consist in a right to the possession and used of property owned by some
other person. A lease, as generally understood, is a document creating an interest in land for a
fixed period of certain duration and usually in consideration of the payment of rent.

Lease in Transfer of Property Act, 1882, does not apply to agricultural lease1. Most agricultural
lease are subject to local state laws and usages. In Uttar Pradesh, it is governed by the UP
Zamindari Abolition and Land Reform Act, 1952. Agricultural purpose refers to tiling and
cultivation for the purpose of raising crops. The expression has been constructed liberally and
many purposes, subservient and ancillary to agricultural purpose are also agricultural purpose.

Definition of Lease

“Lease 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 transferor by the transferee, who accepts the
transfer on such terms.”2

A lease is a transaction with respect to immovable property and creates a right to enjoy such
property for certain term and for consideration on the conditions mentioned in it. Lease is not
a transfer of ownership in property, it is transfer of an interest in an immovable property. The
interest is right to use or enjoy the immovable property and this interest is transferred in favour

1
THE TRANSFER OF PROPERTY ACT, 1882, SECTION 117, 2019.
2
THE TRANSFER OF PROPERTY ACT, 1882, SECTION 105, 2019.

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of the lessee and he acquires the interest through the conveyance of lease. Lease is a transfer
of only a partial interest. It is not a transfer of absolute interest.

Under Black’s Law dictionary, “Lease” can be defined as a conveyance of lands tenements to
a person for life, for a term of years, or at will, in consideration of rent or some other
recompense.3 Oxford Dictionary of Law defines it as “a contract under which an owner of
property grants another person exclusive possession of the property for an agreed period, in
return for rent and sometimes for a capital sum known as a premium.4

Section 105 defines lease. A lease of immovable property is a transfer of a right to enjoy such
property made for a certain time or in perpetuity in consideration for a price paid or proposed.
The definition makes it clear that a lease is a transfer of certain rights or interest in the property.
The right or interest which is transferred is the right to use and enjoy the immovable property
for a certain time while ownership remains with the transferor is known as ‘right of reversion’.
Since interest in an immovable property is considered as property, lease is a transfer of
property. However, lease is a transfer of only a partial interest.

Essential Elements of a Lease:

Section 105 of Transfer of Property Act, 1882 defines lease and one would be easily able to
derive some of the important characteristics of a lease such as transfer of an interest, parties to
the lease, subject matter of lease etc. The essential elements of lease are:

• Transfer of right
• The Parties
• The subject matter
• Consideration/Premium
• The Period/ duration

Transfer of right: A lease a transaction with respect to immovable property and creates a right
to enjoy such property for a certain term and for consideration on the conditions mentioned in
it. The right to possess and enjoy the property is transferred in favour of the lessee and he
acquires this interest through the conveyance of the lease. After the creation of such an interest,
a tenant or a sub-tenant is entitled to remain in possession thereof until the lease is duly

3
Black’s Law Dictionary (Standard Edition 2014).
4
Oxford Dictionary Of Law (7th Edition 2009).

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terminated and eviction takes place in accordance to law. The relationship of landlord and
tenant can come into existence only after the transfer of an interest in immovable property
pursuant to a contract and creates a right in rem. Where there is no transfer of interest there is
no lease. Further, if an option is given to the lessor by the lessee himself to resume the
leasehold, it is a personal covenant and does not create an interest in the land.

Bare right to usufruct is not a lease. Similarly, the transfer of a bare right of possession without
the right to usufruct is not a lease. Ordinarily, the test of exclusive possession determines the
character of a lease. The essential characteristic of a lease is that the subject is one which is
occupied and enjoyed and the corpus of which, does not in nature of things and by reason of
the user, disappear.5

The Parties: The parties to the lease are the transferor, who is called the lessor or landlord, and
the transferee, who is called the lessee or tenant. Both the parties must be competent to contract.
The lessor and the lessee cannot be the same person, they have to be two different persons. A
lessor can be an absolute owner of the land or a joint tenant or a lessee himself but above all
must be competent to contract. Thus minors, or unregistered associations cannot be lessees.

A lawful agreement of lease of immovable property is, therefore, a contract which fulfils the
essentials of a contract6. Since the lease is based on a contract, its legality or validity will be
determined by the provisions of the Transfer of Property Act as well as the Indian Contract
Act. It must be clear that while both sale and mortgage to a minor is valid, a lease to a minor is
void as the lease imports a covenant by the transferee to pay rent and perform various condition
which may be imposed in a lease. A contract with a minor is void.

A lease is void when the purported lessor does not have any interest in property sought to be
leased. The conferment of patta as such does not confer title in a suit for declaration of title
and possession A lease may be granted to any person who is competent to contract at the date.
If two or more persons hold demise under one lease, then, in the absence of a clear provision
to the contrary, the entire body of tenants constitutes a single tenant qua the landlord. A person
would qualify to be a landlord within the meaning of this Act, if he is entitled to evict the
tenant. Such entitlement can arise directly due to an agreement entered into by providing the
conditions or terms of tenancy violating which the tenant may be evicted. A permanent lease
that provides these terms would result in a landlord-tenant relationship. Since it is implied in

5
Girdhari Singh v. Mesh Lal, AIR 1917 PC 163.
6
THE INDIAN CONTRACT ACT, 1872, SECTION 10, 2018.

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this agreement that non-fulfillment of the-prescribed terms would give the right to the landlord
to evict the tenant. One such term can be non-payment of rent. Where a person claimed title
that was proved to be false or fabricated, then the burden to prove actual exclusive, open,
uninterrupted possession will be upon him.7

Subject matter of lease: The subject matter of lease is specific immovable property such as
land, houses, factories, shops, minerals and buildings including the external walls enclosing or
not enclosing the part so demised; or even of benefits arising out of land such as fisheries,
fisheries and market dues, sand mine or mineral land. A right to carry on mining operations in
land to extract a specified mineral and to remove and appropriate that ‘mineral’ is a ‘right to
enjoy immovable property’ within the meaning of s. 105. Similarly, composite lease of building
would include land and other things appertaining to it including fixtures provided by the lessor,
or in case of a cinema with equipments. A transfer of a right to tap toddy palms or a right to
fell trees for a term of years so that the transferee derives benefit from further growth is a valid
lease8.

A contract for grazing grass, a transfer of a right to pluck trees for fruits, a royalty, sale of trees
with the object of being cut and removed within a reasonable time, an agreement of a right to
collect offerings for a period of specified years, a mere permission to an advertising agency by
a municipal corporation under an agreement for installation and displaying of ornamental ‘grill
work poles’ to provide for outdoor displays of advertisements, is not a lease.

Consideration: There must be a consideration fixed for lease that may be in form of

(i) Money; or

(ii) Money's worth such as a share in crops; or

(iii) Service or any other thing of value to be rendered periodically on specified occasions to
the transferor by the transferee.

Consideration may be termed as rent plus premium as well as rent alone at premium alone. The
term ‘money advanced’ does not include the amount of security deposited, as it is adjustable

towards unpaid rent and the lessor is not bound to pay stamp duty on it.9

7
DR. POONAM PRADHAN SAXENA, PROPERTY LAW, 525 (Lexis Nexis, 3rd ed. 2017).
8
Ibid. Pg 526.
9
DR. R,K, SINHA, THE TRANSFER OF PROPERTY ACT, 230, (Central law Agency, 2015).

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A lease without consideration is invalid. When there is a lease agreement that is executed upon
the condition that in case of failure to deposit instilments within prescribed limit agreement
would become void under s. 105, such promised consideration not paid shall render the lease
void automatically. Any payment by the lessee that is part of the consideration of the lease is
rent or premium. Rent is generally understood as a periodical payment in money or in money’s
worth. In accordance with the terms of the agreement it can be paid periodically or even in
advance. The transfer of right to enjoy immovable property may be made in lieu of money, a
share of crops, service rendered or any other thing of value to be rendered periodically or on
specified occasions to the transferor by the transferee; and the money, share, service or other
thing to be so tendered is called the rent and therefore it is not difficult to conceive of a lease
of an immovable property with a landlord-tenant relationship between the parties in lieu of a
share of profits or in lieu of commission paid or even in lieu of a service rendered.10

The Stamp Duty Act 1899:

The Stamp Duty Act 1899 enumerates the value of stamp duty payable on different lease
documents. A lease agreement can be stamped as an ordinary agreement under article 5 of the
Indian stamp act and corresponding provision of the state stamp duty act. If an agreement of
lease amounts to a demise it is required to be stamped under article 35 of the Indian stamp act
which also includes a sub lease or an agreement to let and sublet. Under article 35, duty charged
is on the average annual rent which is multiplied by the number of years according to the length
of the lease period11.

Therefore, while entering into a lease, lessor and lessee have to act according to the provisions
mentioned under Transfer of Property Act, registration, amount payable on account of stamp
duty and other terms and conditions so mentioned in the lease deed.

Duration of Lease: The lease need not be for a fixed period but its duration should be definite.
An uncertainty as to duration of the term will fatal to a lease. A lease for 'till suitable land is
provided for and six months notice is given’ is not valid for uncertainty. When the lease is for
a specific period, its period cannot be infinite by mere provisions of renewal every three years.
A lease to last during the pendency of a mortgage is not for an indefinite period, but is

10
Ibid.
11
DR. POONAM PRADHAN SAXENA, PROPERTY LAW, 530 (Lexis Nexis, 3rd ed. 2017) .

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dependent upon a contingency and is valid. Similarly, a lease for as long as an institution is in
existence is valid.12

A lease from month to month is a lease for uncertain duration. A lease for life or for as long as
the lessee may wish to hold the land, is determinable at the death of the lessee. A lease for a
fixed period providing for termination before the end of the term or on the happening of a
certain contingency is valid. Similarly a permanent lease does not cease to be so merely because
it is made determinable only in a special case provided therein. A lease for so long as the lessee
pleases to hold the land is determinable at the death of the lessee and may be transferable, but
is not necessarily heritable. A lease, for which no term is fixed, with an agreement not to raise
the rent so long as the tenant pays it regularly, has been held to operate as an agreement to lease
for the life of the tenant.13

Section 11014 Exclusion of day on which term commences: Where the time limited by a lease
of immoveable property is expressed as commencing from a particular day, in computing that
time such day shall be excluded. Where no day of commencement is named, the time so limited
begins from the making of the lease.

Duration of lease for a year.—Where the time so limited is a year or a number of years, in the
absence of an express agreement to the contrary, the lease shall last during the whole
anniversary of the day from which such time commences15.

Option to determine lease - Where the time so limited is expressed to be terminable before its
expiration, and the lease omits to mention at whose option it is so terminable, the lessee, and
not the lessor, shall have such option.

This section lays down the rule for computation of the period of lease. It says that where the
time limited by a lease of immovable property is expressed as commencing from a particular
day, in computing that time such day shall be excluded. Where no day of commencement is
named, the time so limited begins from the making the lease.16

Types of Lease:

12
DR. R,K, SINHA, THE TRANSFER OF PROPERTY ACT, 235, (Central law Agency, 2015).
13
Ibid.
14
THE TRANSFER OF PROPERTY ACT, 1882, SECTION 110, 2019.
15
DR. R,K, SINHA, THE TRANSFER OF PROPERTY ACT, 230, (Central law Agency, 2015).
16
Ibid.

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1) On the basis of quality of Interest of the Transferor: (a) Absolute lease; and (b) Derivative
lease. Absolute lease is granted by a person who has an absolute right over the property. It can
be granted for any number of years or for any time. Derivative lease is granted by a person who
himself has a limited interest in the property. This kind of lease can never extend beyond the
time period for which the primary lease was executed in favour of the lessee.

2) On the basis of Duration: It is a principle of general application that it is not within the power
of a person to create whatever interests he may please in land; he is limited to such interests as
he can create according to law. Leasehold estates recognised by Section 105 are:

(a) Leases for a certain/specific time: Where the duration of the tenancy is a specific period,
such as five years or ten years, it is a lease for fixed term.

(b) Periodic leases: A lease whose duration or term is continuous from period to period is called
a periodic lease. The period may be a year, a half year, a quarter, a month, or even a week, and
the mode in which the rent is reserved may afford a presumption as to the period of the lease.
An annual lease is a lease for one year which confers no right of transfer or inheritance. But a
lease from year to year is a periodic lease, which continues from one period to another period.
Such a lease is of uncertain duration which does not purport to be for a definite period, as the
interest of the tenant does not terminate at the end of the period.

(c) Leases in perpetuity: Leases in perpetuity are also called as permanent leases. In England,
leases in perpetuity are not recognised. In India, perpetual leases are created either by an
express grant or by a presumed grant or by prescription or by estoppels or by statute or usages.
The burden of proving perpetuity of tenancy is on the tenant. He is to prove the existence, the
nature and the extent of the interest which the owner has granted to him. The question whether
a lease is permanent one or not is one of construction of facts and circumstances of case.

In the case R. Kempraj v. Burton & Sons17 , A (lessor) entered into a deed of lease with B
(lessee). It was stipulated that the lease would be for 10 years in the first instance with an option
to the lessee to renew the same as long as desired. Before the expiry of the period of ten years
from the date of the commencement of the lease the lessee wrote to the lessor informing his
intention to renew the lease. When the lessor refused to comply with the request, the lessee
filed a suit for specific performance of the convenant in the lease for renewal. The lessor

17
AIR 1970 SC 1873.

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stressed on the point that the condition relating to renewal was hit by the rule against perpetuity.
The court declined to affirm the claim of lessor that the condition was hit by the rule against
perpetuity because Section 14 was applicable only where here was transfer of property and
since the stipulation relating to renewal cannot be regarded as transferring property or any right
therein, Section 14 could not apply to it (renewal). Besides, even if creation of a lease-hold
interest was a transfer of a right in property, that transfer was only for l10 years. Thus, the
renewal clause was not hit by the rule against perpetuity. The court held that a lease in
perpetuity can be created, however an interest still remains in lessor.

3) Leasehold arises by Implication of Law: The leasehold estates are determined by the
duration of the tenancy. There are two estates which, strictly speaking, do not fall within
Section 105, these are:

(a) Tenancy at sufferance: A tenancy at sufferance is merely a fiction to avoid continuance

inpossessi1on operating as a trespass. A tenant holding over after the expiration of his term is
a tenant at sufferance. A tenant at sufferance is liable for "mesne profits”.

(b) Tenancy at will: A tenant-at-will is not a trespasser, for his occupation is permissive, and
he is always liable for compensation for use and occupation.

Procedure of forming a lease agreement:

Lease how made: Lease of immovable property for one year, or term exceeding one year, can
only be made by registered instrument. All other leases may be made by unregistered
instruments or oral agreements18.

Where there is no contract or local law governing the execution of a lease deed then lease of
immovable property for agricultural or manufacturing purpose shall be deemed to be on yearly
basis and terminable on the part of either lessor to lessee by giving 6 months notice. On the
other hand a lease of immovable property for any other purpose shall be for monthly basis,
terminable by either lessor or lessee by giving 15 days notice.

In the absence of a lease agreement in writing or the existing agreement is silent on the rights
and liabilities of lessor or lessee then section 108 of the Transfer of Property Act sets down the
guidelines to be followed for a working relationship in a lease arrangement. Once the lessor
transfers the property leased to the lessee, the lessee in the absence of contract to the contrary

18
THE TRANSFER OF PROPERTY ACT, 1882, SECTION 107, 2019.

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shall possess all the rights and will also be subject to all the liabilities of the lessor as he is the
owner of it. For computing the time for a lease of immovable property, if time is expressly
mentioned then the lease of immovable property will commence from that particular day and
where no time is mentioned the lease begin from the day when it was entered into19.

Where the time is limited and the lease can be terminated before the expiration, but the lease
deed omits to mention at whose option it is terminable. In such a case the lessee will have the
option to determine the lease.

The Right of Possession:

Determination of leases20: A lease of an immovable property can be determined through 8

modes and it is only by one of these methods that the lease stands determined and the lessor
gets back right of possession of the property;

• by efflux of time limited thereby;

• where the interest of the lessor terminates on happening of an event;
• the interest of the lessor terminates on, or his power to dispose of the same extends to
the happening of any event;
• in case the interest of lessor and lessee becomes vested;
• express surrender before the term is over;
• implied surrender;
• forfeiture;
• when the lessee renounces his character

The prerequisites of the agreement:

Holding over comes into play when even after the determination of lease the lessee remains in
possession of the property and the lessor or his legal representatives accept the rent and assent
to the continuing possession by the lessee. In such a case the lease stands renewed year after
year or month after month according to the purpose for which the property is leased. Where
lease of immovable property has been determined by forfeiture for non-payment of rent and
the lessor files a suit to evict the lessee. If the lessee at the hearing of the suit pays to the lessor
rent in arrear with interest, full cost of suit or provides sufficient security within 15 days, the

19
DR. POONAM PRADHAN SAXENA, PROPERTY LAW, 533 (Lexis Nexis, 3rd ed. 2017).
20
THE TRANSFER OF PROPERTY ACT, 1882, SECTION 111, 2019.

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court may pass an order to relieve the lessee from forfeiture and allow him to hold on to the
property21.

License

Introduction

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.[i] 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 license, when granted, has not other
effect to confer liberty upon the licensee to go upon the land which would otherwise be
lawful22.

“A license 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 license, 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 licensee.”

A license may be oral in which case, terms, conditions and the nature of the license, can be
gathered from the purpose for which the license is granted coupled with the conduct of the
parties and the circumstances which may have led to the grant of the license.[iii] Every license
is governed by the provisions under the Easements act23.

A license 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, license 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 license.

The negative definition of license under Indian law makes it necessary that before a right can
be shown to be a license only, it must be proved not to be an easement or an interest in the
property.

21
DR. POONAM PRADHAN SAXENA, PROPERTY LAW, 530 (Lexis Nexis, 3rd ed. 2017).
22
DR. POONAM PRADHAN SAXENA, PROPERTY LAW, 542 (Lexis Nexis, 3rd ed. 2017)
23
ibid

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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 unlawfully24.

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.”25

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 term26.

Under Section 5227, 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

24
Pallavi Verm, Difference between Lease and License, Legal Service India,
http://www.legalservicesindia.com/article/1765/Difference-between-lease-and-license.html (30, Oct,
2019:10:23).
25
Pallavi Verm, Difference between Lease and License, Legal Service India,
http://www.legalservicesindia.com/article/1765/Difference-between-lease-and-license.html (30, Oct,
2019:10:23).
26
Ibid.
27
The Indian Easement Act, 1882, Section 52, 2019.

13 | P a g e
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. Kapoor28 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;

• A licence is not connected with the ownership of land / property but creates only a
personal right or obligation;
• Licence only creates a right or interest in the immovable property to do something,
under the authority of the grantor of the licence;
• A licence cannot be transferred or assigned;
• Licence 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;
• A licensee cannot sue outsiders in his own name.

28
AIR 1959 SC 1262.

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Kinds of Licence:

A licence may be of the following two kinds:

• Bare licence which is purely a matter of personal privilege, and

• 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 one’s guests. Such a licence may be revoked at any time29.

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 authorized, 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 conduct30.

29
DR. POONAM PRADHAN SAXENA, PROPERTY LAW, 548(Lexis Nexis, 3rd ed. 2017).
30
Ibid.

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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 another’s 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 interest31.

A license coupled with an interest arises when a person acquires the right to take possession of
property located on someone else’s 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 assigned32.

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
him33.

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 licensee34.

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, 188235.

31
DR. R,K, SINHA, THE TRANSFER OF PROPERTY ACT, 241, (Central law Agency, 2015).
32
Ibid.
33
DR. R,K, SINHA, THE TRANSFER OF PROPERTY ACT, 245, (Central law Agency, 2015)
34
Id, pg 246
35
Ibid.

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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 behaviour may create a licence, even without a formal licence agreement36.

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.

LEASE AND LICENCE

A licence is 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 is unlawful,37 and such right does not
amount to an easement or an interest in the property. The primary distinction between a lease
and a licence is that the lease is a transfer of a right in a specific immovable property, licence
is a bare permission. A licencee is not entitled to notice to quit before eviction.

In the case Associated Hotels of India v. R.N. Kapoor38 the issue was whether occupancy of
rooms in a hotel for running a barber shop created a lease or a licence. The case related to
Imperial hotel, where A conducted the business of a hair dresser. He applied for fixation of
standard rent and the question before the court was whether this occupancy was under a lease
or a licence. If it was a lease, the application for fixation of standard rent under the provisions

36
DR. POONAM PRADHAN SAXENA, PROPERTY LAW, 550(Lexis Nexis, 3rd ed. 2017).
37
Section 52, The Indian Easements Act 1882.
38
AIR 1959 SC 1262.

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of the relevant rent Act, could be entertained, but if it was a licence, there would be no question
of fixation of standard rent. The possession was secured with the help of a deed that was
described as a 'licence deed'. It empowered the licencee to use the premises and carry their
business for one year on payment of money through quarterly instalments. The deed gave them
an option to renew or extend the term of occupancy on mutual terms and conditions. A was to
pay for the electricity and water usage calculated with the help of a separate meter. He could
not make any alterations in the premises without the consent of the grantor. On failure to pay
the money, the grantor was at liberty to terminate the agreement without notice and without
compensation. The occupancy rights were transferable in case the licencee could not carry the
business for specified term, but with the prior approval of the grantor. Explaining the difference
between lease and a licence, the court held:

If a document gives only a right to use the property in a particular way or under certain terms
while it remains in possession a and control of the owner thereof, it will be a licencee. The
legal possession therefore, continues to be with the owner of the property, but the licence is
permitted to make use of the premise 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. There is therefore, clear distinction between the two concepts. The dividing line is
dear though sometimes it becomes very thin or even blurred. At one time it was thought that
the test of exclusive possession was infallible and if a person was given excusive possession of
premises, it would conclusively establish that he was a lessee.

The court quoted with approval the observation of Lord Denning in Errington v. Errington,39
to the effect that, although a person who is let into excusive possession is prima facie, to be
considered to be tenant, nevertheless he will not be held to be so if the circumstances negative
any intention to create a tenancy...the question in all these cases is one of intention. Did the
circumstances and the conduct of the parties show that all that was intended was the occupier
should have a personal privilege with no interest in the land? The court laid down four
propositions to find out whether a document creates a lease or licence;

i) To ascertain whether a document creates a lease or a licence, the substance of the document
must be preferred to the form ii) The real test is the intention of the parties-whether they
intended to create a lease or a licence iii) If the document creates an interest in the property,
it is a lease, but if is only permits another to make use of the property of which the legal

39
(1952) All ER 149.

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possession continues with the owner it is a licence and iv) If under the document, a party gets
exclusive possession of the property prima facie he is considered to be a tenant, but
circumstances may be established which negative the intention to create a lease. The court held
that the document here created a lease and not a licence, as it did not confer a bare personal
privilege on A to use the rooms. It had put him in exclusive possession of the property
untrammelled by the control and free from the grantor's directions. These conditions that were
incorporated in the document were the ones that were usually found in a lease. The right of the
grantees to transfer their interest under the document even though with the consent of the
grantor was destructive of the theory of licence as a licence is never transferable being but
purely a personal privilege. Therefore, these conditions in the document created a lease and not
a licence in favour of the grantee.

EASEMENT

Introduction

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 come40.

An easement is a legal right to occupy or use another person’s land for specific purposes. The
use of the land is limited, and the original owner retains legal title of the land. A legally binding
easement must be made in writing, the exact location stipulated in the property’s deed.
Easements most commonly grant utility companies access for the purpose of installing and
maintaining power, phone, and cable lines, as well as for water drainage purposes. An easement
may also be granted to allow the owner of a neighboring property to install an access driveway.
In most cases, even when the land in question changes hands, the easement remains in effect
and subsequent owners are required to allow the easement owner to continue using the land as
specified. To explore this concept, consider the following easement definition.

40
Ibid.

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Types of Easement

There are several types of easement, each of which grants the holder specific use of the
property. The type of easement depends on the type of property involved, the relationship of
the parties, and the specific use for which the easement is granted.

Utility Easement

A utility easement is perhaps the most common type and it involves giving easement rights to
a utility company or the local municipality (city, county, or state) in general. These easements
are typically described in the property deed and include a map defining the area to which the
utility or municipality is entitled. In the case of a utility easement, the property owner can use
the property however they choose, as long as they do not interfere with the utility company or
municipality’s use.41

Private Easement

Private easements occur when a property owner sells an easement to an individual. This may
be for a number of reasons, including giving a neighbor driveway access, or sharing a sewer
line or well with a neighbor. Before granting a private easement, or purchasing a property that
has this type of easement, it is vital that the property owner or potential buyer review the
documents carefully, as a private easement often limits what the property owner can do on or
around the defined area. For example, a property owner who has granted a solar access
easement to his neighbor may not be allowed to plant trees or construct buildings, either of
which would block sunlight, next to the easement.42

Easement by Necessity

Situations often arise when one property owner must cross another’s land for a crucial purpose,
such as accessing their land and home. A landowner cannot be denied access to his home or
property, and this is generally taken into account in the deeds when the land is originally
divided. Although necessity creates a right to an easement, it is imperative to ensure the exact
location of an easement by necessity is recorded on the deed.43

Prescriptive Easement

41
Meaning and types of Easement, SRD Law Notes, https://www.srdlawnotes.com/2016/05/meaning-and-types-
of-easement.html (30 Oct, 2019:11:13).
42
Ibid.
43
Ibid.

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A prescriptive easement occurs when someone acquires easement over another’s land for a
specific purpose. This differs from easement by necessity as the person acquiring the easement
only uses the property for a set amount of time. Each state has specific statues that determine
the length of time a person can use a prescriptive easement, and whether the person holding
the easement is required to pay a portion of the property taxes on the land being used. A
landowner may simply grant permission for the other individual to use the property on a limited
basis, but if access is denied, the individual must file a claim of easement by prescription,
allowing the court to make a ruling.44

Public Easement

A public easement grants a certain defined area of land for public use. An example would be
the granting of public access of a portion of the landowner’s property for a park or touring.45

Duration of an Easement

In general, if the legal easement does not specify the length of time the easement will be in
effect, the courts can assume it was created to last indefinitely. However, if the easement holder
intends to use the land permanently, the duration of an easement should be specifically stated
in the recorded deed containing the easement. In the case of an easement that specifies a
termination date, the easement holder must stop use of the land on or before that date, or seek
permission to extend the duration of the easement from the property owner.

Trespass upon an Easement

Blocking a party who has an easement is considered “trespassing upon an easement,” an action
for which the easement owner has a right to file a lawsuit. For example, placing a fence across
a public path that sits on an easement may be considered trespassing upon an easement, even
if the fence was placed by the property owner. In this case, the easement holder can take the
property owner to court, which may then order the fence be removed46.

Terminating an Easement

The act of terminating an easement requires the approval of the court. For a property owner to
terminate an easement, at least one of the following facts must be proven in court:

44
Meaning and types of Easement, SRD Law Notes, https://www.srdlawnotes.com/2016/05/meaning-and-types-
of-easement.html (30 Oct, 2019:11:13).
45
Ibid.
46
ibid

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 • Both parties have agreed to the termination
• The easement has reached its expiration date
• The easement holder discontinued use the of property
• The need for the easement no longer exists
• The easement holder is creating a hostile use of the property
• The owner of an easement has died

If the property holder seeking to terminate an easement is unable to prove one or more of the
required facts, the court may order him to continue allowing the easement holder to use the
land in question until these facts can be proven47.

47
Meaning and types of Easement, SRD Law Notes, https://www.srdlawnotes.com/2016/05/meaning-and-types-
of-easement.html (30 Oct, 2019:11:13).

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