LICENSE-DEED

(A brief Introduction)

1. What is License: Section 52 of the Indian Easements Act, 1882 (No. V of 1882) defines license as follows: "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 the immovable property of the grantor, something which would, in the absence of such right, be unlawful>

2. Grant of License: License 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. License is only a permission to do something on an immovable property like occupation, or enjoying fruit thereof, or using it for some other purpose.

A license is notionally created where a person is granted the right to use the premises without becoming entitled to the exclusive possession of them or the circumstances and conduct of the parties show that all that was intended was that the grantee should be granted a personal privilege with no legal interest.

If the agreement is merely for the use of the property in a certain way and on certain terms while the property remains in the owners possession and control>

The definition in Section 52 referred to above does not refer to exclusive possession.

A license is a personal right given to the licensee and, therefore, Section 56 of the Easements Act, 1882 provides that license cannot be transferred by the licensee or exercised by his servants and agents.

3. Distinction between Lease and License: Inspite of the statutory provisions governing grant of a license the distinction between a Lease and a License is very fine resulting in spate of controversy and litigation therefore, the intention of the parties are the real test for ascertaining character of a document. Honble Supreme Court of India in Khalil Ahmed Bashir Ahmed v. Tufelhussain Samasbhai, AIR 1988 SC 185, their Lordships laid down the propositions as well established

(1) to ascertain whether document creates a license or lease, the substance of the document must be preferred to the form;

(2) the real test is the intention of the parties whether they intended to create a lease or a license;

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

(4) if under the document a party gets exclusive possession of the property, prima facie he is considered to be a lessee,

The other difference between lease and license:

(1) A lease creates an n interest in the property while a license passes no interest in the property and merely makes an action lawful, which without it would have been unlawful.

(2) A lease gives the tenant a right to exclusive possession while a license confers no such right on the licensee.

(3) A lease is assignable, but a license is generally non-transferable.

(4) A lease unlike a license is not revocable.

(5) A lease is not determined by the grantor making an assignment or its subject-matter, but a license is determined in such a case.

(6) A lessee can bring an action for trespass, but a licensee cannot sue in his own name.

(7) A lease in some cases require registration but a license does not.

(8) A leasehold creates a heritable

Ascertain Payment of Stamp duty and Registration fee.

Ascertain the list of documents (enclosures) required to be produced at the time of presentation of the document before the jurisdictional Sub-Registrar.

Format of License-deed

Payment of Stamp duty and Registration fee.

A. (i) Stamp duty is payable on the instrument but not on the transaction. To ascertain the correct Stamp duty payable one has to see the intention of the document and words used in it.

(ii) A general format has been designed for the help of the public concerned. Based on this format Stamp duty and Registration fee payable on this License-deed is as below

1. In case of license of a commercial / industrial shed / house etc. situated in the Bangalore Urban District in the state of Karnataka when a license-deed is executed stamp duty and registration fee is calculated as follows

Note: - The provisions of Article 30 of the Schedule to the Karnataka Stamp Act, 1957 shall mutatis mutandis apply to calculations of value for the purpose of determining the Registration fee.

The list of documents (enclosures) required to be produced at the time of presentation of the document before the jurisdictional Sub-Registrar.

An Identical copy of the License-deed.

Format of License-deed.

Note : This is only a draft format and not a format prescribed under any law. This format can be used with modifications suiting to your requirements wherever it is necessary. In case of doubt regarding payment of Stamp duty and Registration fee etc. contact the concerned Sub-Registrar / District Registrar.

[You can download this License Agreement format]