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lease ,easement ,licence...
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The burning question before us at present, appears to be the distinction between a lease and a licence. This delicate question has been brought before the Supreme Court more than once, which fact in itself indicates that we are still wanting a clear-cut distinction between the two terms, lest we repeat our past errors. The most recent decision which I have at hand is the one in Sohan Lal Naraindas v. Laxmidas v. Laxmidas Raghunath Raghunath Gadit , reported in (1!1" 1 SCC #!$% (1!1" # SC& ')% (1!#" *om + 1 (SC ( SC ", ", where Their +ordships of the Supreme Court held that the crucial test is the intention of the parties, i.e. whether the intended to create a lease or a licence, and that the test of e/clusive possession, though not decisive is of significance. Such reasoning was e/pressed earlier in Ramamurthy in Ramamurthy Subudhyv. Subudhyv. Gopinath (0I Gopinath (0I 1$ SC 1" and in M in M N . N . Clubwala ( Mrs" Mrs" v. Fida Fida Hussain (0I Hussain (0I 1$' SC $1" and also in Associated in Associated Hotels o !ndia Limited v. R v. R. N . N . "apoor (0I (0I 1' SC 1#$#", where Their +ordships held that the document b itself could not be a deciding factor whether a particular transaction was a lease or a licence. THE DISTINCTION
Section 1' of the Transfer of 2ropert 0ct, reads% 30 lease of immovable propert is a transfer of a right to en4o such propert, made made for a certain time, e/press or implied, or in perpetuit, in in consideration of a price paid or promised or of mone, a share of crops, service or an other thing of value to be rendered periodicall, or on specified occasions to the transferor b the transferee, who accepts the transfer on such terms. The transferor is called the lessor, the transfree is called the lessee, the price is called the premium, and the mone, share, service or an other thing to be so rendered is called the rent.3 Section '# of the 5asements 0ct reads% 36here one person grants to another or to a definite number of other persons a right to do or continue to do, in or upon the immovable propert of the grantor, something which would, in the absence of such right be unlawful, and such right does not amount to an easement or an interest in the propert, the right is called a licence.3
If we focus our attention onl upon the question of rights in the above two definitions, we find that in both cases there is a transfer of a right. It ma be noted that in a lease the ight consists in en4oing such propert transferred, and so also in a licence the ight consists in doing something in or upon the immovable propert of the +icensor, though without the creation of an interest in the propert. 0lthough it is not clearl stated that a lease creates an interest in the propert, inasmuch as the opposite is stated in case of a licence, et b 4udicial dicta we have come to believe that a lease creates an interest in the propert merel to highlight a contradistinction between a lease and a licence. 6e have, therefore, imputed such creation of a right or interest in the propert, not due to the e/istence of a positive statement to that effect in the definition of a lease, but merel because of the statement of its non-creation in case of a licence. This imputation of the creation of a right in the propert in case of lease, is in realit a high overtone because all that follows from the definition is that the transfer is solel of 7a right to en#oy7 which is equivalent to the 7 right to do so, in or upon the immo$able property,7 as stated in the definition of a licence. Considering that the Transfer of 2ropert 0ct and the Indian 5asements 0ct, were both passed in the same ear, 1#, obviousl the concept of a ight would not have been different. 6e cannot conceive that a lease gives a right to en4o the propert in an manner the transferee feels best, as against a licensee who could have his rights directed in a particular manner as per the terms of the grant. In fact, we are quite settled on the principle that if a tenant does an alteration8modification8improvement, etc., he does so at his own ris9, since he does not have an propert rights over the sub4ect-matter of the demise, and he would not be allowed to contend that he had rights in the propert due to which he did the alteration8modification. 0s long as he 9eeps on paing the rent, the dichotom of owner and tenant shall subsist and consequentl his interest in the propert is in no wa better or, is as precarious as that of the licensee. 0s against this, we find that Section $( b" of the 5asements 0ct clearl states that a licence becomes irrevocable when 3the licensee, acting upon the licence has e/ecuted a wor9 of permanent character and incurred e/penses in the e/ecution3, which goes to show that a licensee can create rights in the propert, or, for ever practical effect, he
is on a safer position than a tenant, whose tenanc could alwas be terminated with an appropriate notice as provided in Section 1$ of the Transfer of 2ropert 0ct. :o doubt, we can still argue that the securit in tenure of the licensee arises not b virtue of the creation of 3an interest in the propert3 but in the creation of a right over the propert, i.e. his rights are purel above the surface of the land, as against the rights of the owner which lie from the surface to below. *ut if we adopt this argument, we reach a parado/ical situation. 6e conceive that the interests of the licensee restricts onl to the structure above the surface. Then, does the structure have no foundation; 0ren7t these foundations embedded in the soil; Is this not immovable propert;
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