Revocation of License in accordance with Transfer of Property Act

REVOCATION OF LICENSE IN ACCORDANCE WITH TPA

RESEARCH METHODOLOGY:

The researcher has adopted a purely doctrinal method of research.

  • Sources of Data: 

The following secondary sources of data have been used in the project :

1.Articles

2.Books

3.Internet

RESEARCH QUESTIONS:

1.What is the meaning of licence and how a licence is granted in India?

2.What are it’s types and basic components?

3.When the license will be deemed to be revoked?\ 

AIMS AND OBJECTIVES:

The researcher aims to study about the Revocation of Licence.

HYPOTHESIS:

  • The researcher on close examination believes that revocation of licence can be done on certain criteria mentioned.
  • The researcher also believes that license does not confer a interest or property in the thing.

CHAPTERIZATION:

CHAPTER1. INTRODUCTION:

This chapter will give an introduction to the topic.

CHAPTER 2.Distinction between Lease and License:

This chapter will deal with distinction between lease and license and it includes:

  • ESSENTIALS OF LEASE
  • Transfer of Interest
  • Parties to lease
  • Subject matter of lease
  • Duration of lease
  • LICENSE and it’s kinds

CHAPTER 3.Granting of license:

This chapter will deal with granting of license.

CHAPTER 4. Revocation of license:

This chapter will explain Revocation of licence.

CHAPTER 5. Case Laws :

This chapter will deal with landmark judgements.

 

1. INTRODUCTION:

[1]From an early easement, the term was derived from the Latin word “aisementum,” which meant “comfort or privilege.It grew into “a legal right or privilege to use anything other than one’s own.The permission is granted to easement holder to use the land of another person through the award of a non-possessory property interest. It refers to a man’s right to have a license &it’s a personal right granted to the individual to do anything on the grantor’s immovable property that doesn’t add value to the property itself. This is a permissive right that is solely the grantor’s personal privilege.This imposes no obligations or responsibilities on the individuals making the grant & it is thus revocable except under the conditions set forth in the Act. When a license is given, it has no other consequence than allowing the licensee freedom to go to land that would otherwise be illegal.

As per s. 52 of the Indian Easement Act, 1882, a license is defined as something that a person offers to another person or group of people the right to or continue to do something in or on the property of the grantor. The Indian Easements Act of 1882 incorporated this principle. The Indian Easements Act, 1882, deals with licensing & their administration from S.52 to 64. Unlike a lease, the license  can be  simply referred to as ‘ right to use the subject land’. The tenant receives possession of the property to the tenant & it’s possession of the premises / land is given on the basis of a lease.

The ‘licensee’ has only right to use it according to the conditions of the license agreement &for purpose which is the agreed upon. The legal premise is that the courts try to determine whether the parties intended to form a lease or a license by inferring their intentions. A lease & licencing agreement should be carefully structured to convey that the parties only intend to enter into a license arrangement, not a lease agreement. The licensee should never be given absolute possession of the subject property; otherwise agreement may be regarded as a leasing arrangement.

A.License Under English Law:

[2]A license, according to English law, is only a personal privilege or right that allows the licensee to do anything on the licensor’s land that would otherwise be unlawful. [3]It is an excuse for doing something that would otherwise be illegal due to the licensor’s approval. It is merely permission to do something that allows the licensee to accomplish something lawfully that he could not do otherwise.

[4]A dispensation or license does not create an interest in anything, nor does it change or transfer property in anything; it just makes an action legal that would have been unlawful without it.[5]

A license is simply permission to do something on immovable property, such as occupation it, enjoy its fruits, or use it for another purpose.

A license is an official permit or permission to carry on a business or perform an act that would be illegal without it, and the terms license and permit are sometimes used interchangeably.[6] Permission and license are interchangeable terms.Permission or license is provided by the granter to the grantee for the use of an immovable property for a specific purpose that is necessary for the grantee to retain dominant right of possession over the immovable property with the granter.

B.License Under Indian Law:

According to s. 52, if any person gives / proceeds to do in or on grantor’s ‘ immovable property’  something that could be unlawful or rights are not easement or interest in the land, to another person or a no.of certain persons , in the absence of such a right it is called license.

Licensing  means three things:

1.Authorization to do so,

2.Certificate or document incorporating the relevant authorization, e

3.License fee which is the price granted for the privilege.

In case Associated Hotels of India ltd. vs. R.N. Kapoor[7] it was held by hon’ble court that , license is a document that allows a licensee to use a property under specified terms & circumstances while the property remains in the ownership of the true owner. As a result, the legal possession of the property remains with the owner,& licensee is only granted a license to use the owner’s property for a certain purpose. In case of absence of such a license, however, the licensee’s actions on the property would be illegal.

Errington vs Errington [8]The hon’ble  Court  held that the son and daughter-in-law had no express responsibility to pay the instalments and that the terms could not be inferred from their actions.The father’s commitment was described as a ‘unilateral contract’; the performative act that pays the mortgage & it will  be revocable only  if the couple fails to pay . Once success has begun, the  offer can’t be cancelled by offeror. If the mortgage was paid, the father’s implicit goal was to keep the house in his family’s hands. The pair was on a lease, not a tenancy, but a legal or at least equal right to dwell that would evolve into a good equal title after the mortgage was being  paid.

2. DISTINCTION BETWEEN  LEASE AND LICENSE:

They both sound like the same but lease  &license both of them are   two separate legal concepts &  offers different rights and duties.There are certain criterias on the basis of which both can be differentiated:

According to Section 52 [9]of the Indian Easement Act of 1882, a license is something that a person provides another person, or a number of people, the right to do or continue to do something in or on the grantor’s immovable property.

A lease is defined in Section 105[10] as “a transfer of immovable property for a specific time period for a consideration in which the transferee has accepted the parameters surrounding the agreement.”

[11]George Chandi and Others v. Beena and Others: A  permission to hold or possess the property without a right of ownership as a matter of right would be considered just a license. If exclusive possession was given up as a matter of right at the time of the relationship’s formation and the answer is affirmative, the relationship is a lease. Transfer of exclusive possession of the premises under an arrangement is not determinative of the existence of a lease, but it is a strong positive factor constituting the existence of a lease arrangement, and it can be safely acted upon when other factors support the existence of a lease arrangement.The most important question to evaluate is what the parties intended when they entered into the relationship, if exclusive possession was given to the other party, and whether the terms and conditions provided would be sufficient to create a lease rather than a license.[12]

To find out whether a document creates a license or a lease:

1.the substance of the document must take precedence over its form;

2.the real test is whether the parties intended to create a lease or a license;

3.if the document creates an interest in the property, it is a lease; but if it only permits another to make use of the property, the legal possession remains with the owner, it is a license; and

4.if a party obtains exclusive possession of the property under the document, he is prima facie, a tenant.However, situations may arise that negate the intention to create a lease.

[13]ESSENTIALS OF LEASE:

1.Parties must be competent to enter into a contract: The parties to a lease agreement must be capable of entering into a contract.Lesser should be entitled to a  property and have complete control over it.

2.Right of possession: In a lease, only the possession of the property is transferred and ownership rights are not transferred.

3.Rent or premium: Rent or premium can be used as a kind of consideration for a lease.

4.Acceptance: The lessee must accept the lease agreement, as well as the time duration and terms and conditions imposed on the transfer, in order to obtain an interest in the property following the lease.

5.Time Period: A lease is always for a specific amount of time, which is indicated in the lease agreement. It can be relaxed at the lessor’s discretion.

6. Consideration: In a lease, the lessor transfers the right of possession in exchange for the lessee paying rent or a premium as a lease consideration.

Transfer of Interest:

A lease is a contract that creates a right to use immovable property for a set period of time and for a particular amount of money under certain conditions. The lessee receives the right to possess and enjoy the property when the lease is transferred. After establishing such an interest, a tenant or subtenant has the right to remain in possession of the property until the lease is properly ended and eviction is carried out in accordance with the law. Only after the transfer of an interest in immovable property pursuant to a contract and the creation of a right in rem can a landlord and tenant relationship be established. Furthermore, if the lessee himself gives the lessor the option to continue the leasehold, it is a personal covenant that does not generate an interest in the land.”

[14]Parties to lease:

There must be two parties involved in a valid lease: the lesser (the transferor) and the lessee ( transferee ). A lease is an agreement between the owner of a property and the person who offers to lease it for a set period of time in exchange for a payment of consideration.The person transferring the right of enjoyment of the property is known as the lesser, and the person to whom the right is transferred is known as the lessee.

Subject matter of lease:

This provision specifies that the subject matter of the lease must be immovable property. Immovable property is defined in Section 3 of the Transfer of Property Act, and it includes not just land, buildings, and minerals, but also the benefits that derive from land.

Duration of a lease:

The lease deed must always specify the duration the lessee will have the right of possession.

[15]LICENSE:

A license is a right to do or continue to do something in or upon the grantor’s immovable property that would be illegal if the grantor did not have such a right, and such a right does not imply an easement or an interest in the property.

The major difference between a lease and license is that a, lease is a transfer of a right in a specific immovable property, but a license is merely a permission and a licensee is not entitled to notice to vacate before evidence.

kinds of License:

[16]1.Bare license, which is merely a question of personal privilege, and 2.license accompanied by a grant or interest in the land.A bare license is a personal permission or consent to enter, cross over, or be present on another person’s land. A bare license is a license that is given freely and is not accompanied by the giving of an interest in the land, such as the license that one must give to one’s guests. And This kind of license can be revoked  any time.

A bare license is a defence to what would otherwise amount to be tort of  trespassing.[17] When a licensee goes outside the scope of the license, he becomes a trespasser[18]. If a person is permitted to enter the land for one purpose but enters for another[19], or begins to pursue a different goal than that for which he is authorised while on the land, he is considered a trespasser,where it is known or understood that the occupant would not have consented.[20]

It is a case of bare license if a person is allowed to undertake an act on the land without interfering with the nature of the property or taking any profits from it.[21]

Bare licenses are usually not assignable (transferable) and can be revoked by the property owner at any time. When the licensee, acting on the license, completes a permanent work and incurs expense, the bare license becomes irrevocable.

  1. License which is coupled with a grant or interest in land-

A license is combined with a grant or interest in land, When a permission to enter another’s land for the purpose of removing something from that land (such as timber)[22].

A license with an interest is arises, .The granting of an interest (such as a profit a prendre) is combined with permission to enter the land in order to realise or exploit that interest.

When a person acquires the right to take possession of property located on someone else’s land, a license with an interest is created, such as when a lender obtains the right to repossess an automobile located on private property after a borrower defaults on a loan.

When standing timber is sold on the condition that the purchaser sever the timber, the sale of the timber on these terms implies the grant to the purchaser of a permission to access the land in order to collect the timber. Unless otherwise agreed, such a license is irrevocable for the duration of the interest to which it is annexed and can be assigned.

3. GRANTING OF LICENSE:

[23]The provisions for granting licenses are the same as for easements. When entering into a Lease and License arrangement, are two preliminary questions arise: who can grand and how a license is granted.

The first issue is addressed by Section 53 of the Indian Easements Act of 1882, which provides that anyone may give a license on the terms and to the extent that he may transfer his interests in the land affected by the license.To put it another way, a license cannot be granted or received if the licensor does not have a sufficient lawful interest in the property.

The second question is addressed in S. 54 of the Indian Easements Act, 1882, & it states that a grant of a license may be express or implicit from the grantor’s conduct, and that an agreement that purports to create an easement but is ineffectual for that purpose may be construed as a license.This is an important definition. Property owners should be aware that their actions may constitute a license, even if there is no formal license agreement.

  • Power To Grant License:

The power to grant a license is outlined in Section 53. As per S.53  , Anyone may give a license in the conditions and to the extent that he may transfer his interests in the property affected by the license, according to S.53.

The power to give a license is mutually exclusive with the ability to transfer. Man can give a license to the extent that he can transfer his interest in the affected property under certain conditions.A valid license is given by a mortgagee or co-tenant who is lawfully in sole possession and enjoyment of the property to do something that he could do himself.[24] A license can be granted by anyone who has the power to transfer property, even if he is not the owner. Such a person can also revoke the license.[25]

A grant of the right is granted by the grantor under Section 52. No license may be created without a grant in the broadest sense[26]. Only as long as the licensor retains a right, title, and interest in the premises can a license agreement continue to survive to be effective. The agreement for license comes to an end when the right to the title expires. If the licensor is a tenant, his license agreement expires when the tenancy ends, and the licensee ceases to exist.[27]

  • Form of License – Express or Implied:

As per section 54. A license may be granted “expressly or impliedly” as a result of the grantor’s actions, and an agreement that purports to provide an easement but is ineffectual for that purpose may function to generate a license.

When a person is granted the right to use the premises without becoming entitled to exclusive possession of them, or when the circumstances and conduct of the parties show that all that was intended was to grant the grantee a personal privilege with no legal interest, a license is notionally created.When a license is combined with a compulsorily registrable grant of immovable property or an interest in immovable property, it must be in written or registered.[28]

  • Express License:

An express license is one that in direct terms allows the conduct of a certain act, such as a public authority-issued license to keep a tavern. Express licenses apply to more specific scenarios in which permission has been given to a specific person. An example is when the owner invites guests to his home for dinner  or to stay in one of his rooms. Any re-entry after that period without further permission would be considered trespass.

  • Implied License:

A license may be implied by the licensor’s actions, such as allowing something to be done on his land by someone who believes the land is his own.[29]A plea of implied license, which can be founded on the right of equity to intervene, must be based on either a contract or the presence of some reality that the legal owner cannot deny. [30]A shopkeeper’s invite to customers to enter his premises to conduct business is an example of implied license of everyday life.

4. REVOCATION OF LICENSE:

Revocation generally  means  as ‘termination of the License.’ A license is revocable at the discretion of the licensor or generator, however it cannot be withdrawn under the following two circumstances. A grantor can always revoke a bare license. A license, unlike a contract, generates no mutual obligation or rights between parties, and it can be cancelled under this provision unless it falls under one of the exceptions listed. The power of the section to revoke a bare license granted to the licensor is unaffected by the fact that the license was granted for a valuable consideration.

When a license is just a bare license, the fact that it was acquired for a specified period of time has no bearing on the licensor’s right to revoke it at any moment. The licensor has the power to withdraw a license at any time, and this power is not conditional on the licensor providing reasonable notice or sufficient time to the licensee. The right of a licensee to receive reasonable notice before revocation and the right of the licensor to revoke a license are not intertwined in the sense that the licensor cannot use his right without first issuing such notice.

[31]62. License when deemed revoked

A license is deemed to be revoked-

(a) where the grantor loses all interest in the property affected by the license due to a circumstance that occurred before the license was granted;

(b) when the licensee releases it to the grantor or his representative, either expressly or impliedly;

(c) when it has been given for a limited period of time or acquired on the condition that it would become void if a particular act is performed or not , and the period has expired or the conditions have been met;

(d) where the property affected by the license is destroyed or permanently transformed by superior force, rendering the licensee unable to exercise his right;

(e) where the Licensee acquires complete ownership of the property affected by the license;

(f) where the license is provided for a specific purpose that is accomplished, abandoned, or rendered impracticable;

(g) where the license is issued as holding a specific office, occupation, or character, and that office, occupation, or character ceases to exist;

(h) if the license is not used as such for a continuous period of twenty years and the cessation is not in accordance with a contract between the grantor and the licensee;

(I) in the case of an accessory license, when the interest or right to which it is attached expires.

5. CASE LAWS:

The Court held in Associated Hotels of India Ltd. v. R.N. Kapoor [32]that a license is a document that allows a licensee to use a property under specified terms and conditions while the property remains in the ownership of the true owner. As a result, the legal possession of the property remains with the owner, and the licensee is only granted a license to use the owner’s property for a certain purpose. In the lack of such a license, however, the licensee’s actions on the property would be illegal.

Mrs. M.N. Clubwala v. Fida Hussain Saheb[33]Whether an agreement establishes a landlord-tenant relationship or solely a licensor-licensee one, the parties’ intention is the most important factor to consider. This intention must be determined by examining all of the agreement’s relevant sections.

Delta International Limited vs. Shyam Sundar Ganeriwalla & Another, [34]The essential test for determining whether a document provides a lease or a license is to determine the parties’ intention; keep in mind that in circumstances when exclusive possession is provided, the boundary between lease and license is very thin.

Rajbir Kaur and Anr. vs. S. Chokesiri and Co. [35]The operative intention of the parties determines whether a transaction is a lease or a license, and there is no single, clear litmus test to differentiate one from the other. The giving of simply the right to use the premises without the right to exclusive possession of the premises operates as a license.  ‘Exclusive possession ‘is itself  not decisive in favour of a lease and against a mere license, Even the grant of exclusive possession may turn out to be a license rather than a lease if the grantor does not have the power to grant the lease.

6. CONCLUSION:

The conclusion that the term license implies nothing does not preclude the existence of a license law. There is license law, but it must be explained in terms of specific situations. The licensee’s privileges can be terminated at any time if the licensor gives no reason to expect otherwise. When a licensor manifests a intention for the privilege to last longer, the repercussions are determined by other circumstances. The license may create a real easement if it does not violate any legal policy. If it violates the rule requiring a sealed instrument, it will very certainly result in an easement, but the licensee may only seek relief through equitable means.

If enforcing the license will impose relatively insignificant restrictions on the land, neither the parties’ expectations, formalities, or expenditures will give the interest the characteristics of an easement. Laymen, who rarely consider it in terms of legal relationships, frequently use license to signify a transaction. It’s frequently compared to the terms lease and easement, which both refer to certain types of transactions.

 

BIBLIOGRAPHY:

BOOKS:

  1. Dr.G.P TRIPATHI “THE TRANSFER OF PROPERTY ACT, 1882”
  2. UNIVERSAL’S NEW DELHI-INDIA “THE TRANSFER OF PROPERTYACT,1882 WITH SHORT NOTES”.
  3. PROF. G.C. VENKATA SUBBARAO “LECTURES AND COMMENARIES ON THE TRANSFER OF PROPERTY ACT”, SIXTH EDITION.

4.MD. ALAMIN AND MD. ABDUS SALAM “LAW OF TRANSFER OF PROPERTY”, CHAPTER 4, 1ST EDITION, (2012).

5.DR.AVTAR SINGH”TEXTBOOK ON THE TRANSFER OF PROPERTY ACT”, 2ND EDITION, REPRINT (2012)

WEBLINKS :

  1. 1. https://www.britannica.com/topic/license

2.https://lawcorner.in/license-meaning-essential-types-advantage-and-disadvantage-under-tp-act-1882/

3.https://www.lawcolumn.in/concept-of-lease-under-transfer-of-property-act-1882/

4.https://blog.ipleaders.in/lease-under-tpa-1882/

5.https://blog.ipleaders.in/license-section-52-indian-easement-act/

6.https://www.lawctopus.com/academike/definition-license/#_ednref24

DATA BASES:

  • SCC ONLINE
  • JSTOR

 

 

[1]garg, R., 2020. License under Section 52 of the Indian Easement Act, 1882 – iPleaders. [online] iPleaders. Available at: <https://blog.ipleaders.in/license-section-52-indian-easement-act/> [Accessed 25 September 2021.

[2] Ahlawat, A. K., & goel, A. (2015, April 30). Definition of license and granting of license. Academike. Retrieved October 16, 2021, from https://www.lawctopus.com/academike/definition-license/.

[3]  Head v. Hartley, 42 Ch. D. 461

[4] Clifford v. Neil, (1896) 12 App. Div. 17

[5] Thomas v. Sorrell, (1673) Vaughan 33

[6] Parsons v. People, (1904) 32 Colo. 221

[7] AIR 1959 SC 1262

[8]  [1952] 1 K.B. 290

[9] Section 52 of the Indian Easement Act of 1882

[10] Section 105 of Transfer of property Act,1882

[11] License under the Indian easements act. LawPage. (2021, April 9). Retrieved October 17, 2021, from https://lawpage.in/property_law/easement/license#fn__18.

[12] 2018 KHC 5252

[13] Pandey, R. S.(2019, May 25). Understanding lease under transfer of Property Act, 1882. iPleaders. Retrieved October 9, 2021, from https://blog.ipleaders.in/lease-under-tpa-1882/.

[14] Udaipuria, S. (2021, June 24). Concept of lease under transfer of Property Act, 1882. Law column. Retrieved October 9, 2021, from https://www.lawcolumn.in/concept-of-lease-under-transfer-of-property-act-1882/.

[15] verma, pallavi. (n.d.). Difference between lease and license. Difference between lease and License. Retrieved October 10, 2021, from http://www.legalservicesindia.com/article/1765/Difference-between-lease-and-license.html.

[16] Ahlawat, A. K., & goel, A. (2015, April 30). Definition of license and granting of license. Academike. Retrieved October 12, 2021, from https://www.lawctopus.com/academike/definition-license/#_ednref24.

[17] Goldsack v. Shore, (1950) 1 KB 708

[18] Hillen and Pettigrew v. ICI (Alkali) Ltd, (1936) AC 65

[19] R v. Pratt, (1855) 119 ER 3198

[20] R v. London CC, (1918) 1 KB 68

[21] R (Beresford) v. Sunderland CC, (2004) 1 AC 889

[22] Muskett v. Hill (1839) 5 Bing (NC) 694

[23] Ahlawat, A. K., & goel, A. (2015, April 30). Definition of license and granting of license. Academike. Retrieved October 17, 2021, from https://www.lawctopus.com/academike/definition-license/.

[24] Illustration (c) to Section 8 of Indian Easements Act

[25] Municipal Committee Ambala v. Lal Chand 1969 Cur. LJ 580 (Punj.)

[26] Aggrawal and Modi Enterprises v. NDMC, 123 (2005) DLT 154

[27] Ludhichem Industries v. Ahmed R. V. Peer Mohammad, AIR 1981 SC 1998

[28] Section 54, 69, 107 and 123 of Transfer of Property Act and Section 17 of the Indian Registration Act

[29] Ramsden v. Dyson, 1 HL 129

[30] Canadian Pacific Railway Co. v. King, AIR 1932 PC 108

[31] The Indian Easement Act 1882, section 62

[32] AIR 1959 SC 1262

[33] [1964] 6 SCR 642 (Supreme Court, 1964)

[34] AIR 1999 SC 2607

[35] AIR 1988 SC 1845

Author: shivangi kumari,
national university of study and research in law, ranchi

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