INTRODUCTIONÂ
The terms License and Lease are distinct legal concepts, each with its own rights and obligations. A lease is an agreement between a landlord and tenant which grants the tenant a sole interest in the property. License is a consent by the owner for a licensee to conduct a certain activity in the owner’s property.
The term lease is defined in section 105 of the Transfer of Property Act and licenses defined in Section 52 The Indian Easement Act.
SECTION 105 OF TRANSFER PROPERTYÂ
Act Lease Defined A lease of immovable property can be described as a sale of the right to use the property for a specific period of time whether implied or explicit or perpetually with a payment of a payment or promised cash, shares of a crop, service or other item worth a lot, which is that is to be provided frequently or on specific occasions to the person who made the transfer by the recipient, who agrees to the transfer under these conditions.
SECTION 52 OF THE EASEMENT ACTÂ
License defined- Where one person grants another or an undetermined number of others the right to do or continue to do on or in the immovable property belonging to the grantor, anything that could, in the absence of the right granted be unlawful and is not equivalent to an esement or a right to the real estate, this right is referred to as an “license.
DIFFERENCE BETWEEN LEASE AND LICENSE AGREEMENT
A lease requires either a written or oral arrangement between two people: both the landlord as well as the tenant. A license is not required in all cases. require a written contract.
In the event of an interest in real property, it is called an interst. lease is the transfer of an interest in an immovable property. Leases create an interest in the favor of the lessor in regards to that property. In the duration that the lease is in effect, you will have certain rights of ownership in the property, as stipulated in the lease. You have the power to prevent anyone, even the landlord, from the property. License is just a permission without the transfer of any interest. Licenses do not confer any rights. The license does not confer any rights in the property. A ticket, for example, is a ticket for a cricket matches.
TRANSFERABILITYÂ
A lease can be transferred and is heritable.You could transfer the lease of a different person. A sub-tenancy could be negotiated by the tenant. Upon the tenant’s behalf the tenancy may be passed down to the legal inheritor. The license is not transferable or inheritable. You cannot transfer the right to use a license.
REVOCABILITYÂ
Lease can come to an end only if it is in line to the conditions and terms set forth in the lease agreement. (a lease cannot be unrevocable unless it is given prior notice as required by section 107 of the TPA.) The license may be cancelled at any time, at the discretion granted by the grantor. (Except the section 60 exception.)
The effect of transfer/what HAPPENS when there is a sale of property A lease is not affected by the transfer of property via sale of an unrelated person. It is a matter of time and the buyer is required to wait until the period during the duration of the tenancy expires before he is able to take possession. If a license is granted, and the property is transferred to a third party the license comes to an end in a matter of minutes.
Right to PossessionÂ
A lessee has the right to secure possession of the lessee in his own name. The lessee’s possession is solely his. A licensee cannot defend his property in his own name since the licensee does not own any rights to the property as a proprietary owner.
EXCLUSIVE RIGHT RENTALÂ
creates all rights and exclusive of the lessee. But the lease does not grant any rights. What happens when there is the death of a party or a lease doesn’t come to an end with the death of the grantor, or the grantee. The license will end upon the death of the grantee or the grantor, as it is a private contract.
The right to improve a property A lessee that is the owner of the property is entitled to any improvements or additions that are made to property. Licensees are not entitled to any improvements or accessions that are made to the property.
CASE LAW
Honble Supreme Court in C.M. Beena vs P.N. Ramchandra Rao on 22 march 2004 ruled that “The difference between a lease and a license is to be determined by finding out the real intention of the parties as decipherable from a complete reading of the document, if any, executed between the parties and the surrounding circumstances.”
CASE LAW
In Associated Hotels of India Ltd. V R.N. Kapoor, [1960] 1SCR 368. Honble supreme court in para 27 discusses the distinction between licence and lease. In the case that of Municipal Corporation of delhi in vs. Pradip oil corporation and Anr. The Delhi High Court was able to make a crucial observation that a license is not a source of any interest in the property the property it is linked. Lease however could be a the transfer of property. It could be contractual or personal. A licensee who does not grant the licence confers rights to the licensor to be able to enter the land and to enjoy the benefits of it. As a result of a license that is granted, no property or interest to the real estate is established.
In Khalil Ahmad Basher Ahmad T. v. Tufel Hussein sans Bhai Sarangpurwala AIR 1968 SC 184. Honourable supreme court found that if an interest is granted to an immovable property that entitles an owner to enjoy it with no fear of reprisal the document should be considered to be an agreement to lease.