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License: Meaning, Essential, Types, Advantage and Disadvantage Under TP Act, 1882

License Meaning

Section 52 of ‘The Indian Easements Act 1882’ says that 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 a right, be unlawful. Permission to enter land belonging to another without being a trespasser.

Thus if a document gives only a right to another to come on the land or premises and use that in some way or the other, while it remains in the possession and control of the owner, it will be a license.

Explanation- In the case of license, possession and ownership will always remain under the control of the licensor and the licensee would only be entitled to a license. And thus, the license must be in a written form of documents mentioning the rights of the licensee, possession will remain under the control of the actual ownership. A license is a personal right between the licensor and the licensee.

Essentials Ingredients of License

The essentials are as follows-

1. There must be two different persons– One who gives permission to use and another is the one who is given permission to use.

Example- B enters in A’s property, it will become trespass. A permits B to enter, it is called license.

2. These must be a grant– Like A has given B the permission to enter. License is always positive not negative.

3. License is granted to do something in or upon the Immovable property of the grantor.

4. License is granted to do act which would otherwise be lawful – If the license is not there, it would be unlawful.

5. License is not an easement.

6. License is not an interest inland. Section 60 says that a license may be revoked by the grantor at his pleasure unless.

Types of License

1. Bare License

Permission to enter with no consideration provided. The two fundamental types are-

  1. Express grant- It means granting permission by the owner of the land.
  2. Implied grant- It means transferring land.

2. License coupled with interest

License to give effect by virtue of an interest in land, where interest is to obtain profit from a particular point. The license would not be able to enjoy interest without a license, license is dependent upon the interest being in existence.

3. Contractual License

Granted in return for consideration. Depends on the terms of the contract. The license doesn’t have to be in writing, since not an interest inland. There is a component as well-

  1. RevocabilityWhen there is a breach of the contractual terms it all depends on the term itself the contract.
  2. Third parties – Do not bind 3rd parties unless in the event of a constructive trust, it will not be imposed unless matter affects purchasers conscience.

4. License by Estoppel

Assurance must be provided to the aggrieved party and must have relied on it and it must be based on detriment.

Advantages and disadvantages of licensing

Advantages are as follows

  1. Relatively low investment on the part of the licensor.
  2. It reduces risks for the parties.
  3. The risk of failure does not rest with the licensee.
  4. It creates new opportunities in the property matter.
  5. It creates an easier entry to enter into someone’s property without being a trespasser.

Disadvantages are as follows-

  1. It does not give any guarantee.
  2. It could damage the reputation of both the licensor and licensee.
  3. It is only offered for a limited time.

Valid license

According to me, a valid license is a current and subsisting license that is valid for a specific period of time. It is issued by a particular authority which is legally or officially acceptable. It can be used anywhere. But it would exist only up to its validity. An expired license cannot be used after its expiration.

Revocation of License

The revocation of licenses are as follows-

  1. Grantor himself ceases to have any interest in the property.
  2. By the express or implied release of the license by the licensee.
  3. The property gets destroyed due to some reason. Example- Like mischief of property due to some reasons.
  4. Licensee becomes the owner of that property for which license was granted. Example- If I have given my property of license to the other person, and that person has bought my property, so there is no use of license.
  5. The licensee doesn’t use it for a period of 20 years then the license gets revoked. Example- If I have given my property license to the other person, but the person didn’t use it for 20 years, so this way the license gets revoked.

Doctrine of priority

According to the Transfer of Property Act, 1882 says that where a person purports to create by transfer at a different time right in or over the same immovable property and such rights cannot all exist or be exercised to their full extent together each later created right shall in the absence of a special contract or reservation binding the earlier transferee, be subject to the rights of previously created.

For example, A had sold his property to B. Later, A sells his property again to C. After all, A fraudulently sells his property to D. Here, the actual owner is B.

Differences between Lease and License

  1. The lease is defined under the Transfer of Property Act 1882, covered under section 105. License is defined under the Indian Easement Act of 1882, covered under section 52.
  2. The lease is a transfer of right for a period of time, in which one person entrusts his legal possession of Immovable Property to the other person, maybe for few days or forever by expressed or implied. It is not a transfer of ownership. License is where one person grants to another or to a definite number of person 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, means those rights which are given to a person is neither easement nor interest.
  3. Case laws like –

Associated Hotel of India vs. R.N Kapoor, (AIR 1959) – 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 of which the legal possession continues with the owner, it is a license because it does not create any interest in that property. Here, legal possession is with the real owner.

The distinction between Easement and License?

  1. License means rights in personam means against a person. Easement means rights attached to the property.
  2. The license cannot be transferred, it is non-transferable. But easement can be transferred, it is transferable.
  3. License is revocable or can be cancelled on the will of the grant, but easement is not revocable or cannot be canceled at the will of grant.
  4. The license cannot be used continuously but easement can be used continuously.

When is the license transferable?

A license granted by the licensor to the licensee cannot be exercised by the other person, it can only be exercised by the person, to whom the license is granted.

Example- I had granted somebody the license to build a house, on the contrary, the person whom I had granted the license, that person could not transfer his license due to some issue, so in his absence, no other person could exercise the rights, because it should only be exercised by the person to whom the license is granted.

Conclusion

Based on the discussions above, Here comes license, license means only permission to do something on an immovable property like occupation, or enjoying thereof or using it for some other purpose. It is a written form of the document having two parties- licensor and licensee.  It is like granting permission from one person to the other like the right to do something.  A license cannot be transferred or assigned. The above fact doesn’t mean that there is no license rule for the term license. There is a licensing law but it is specifically used in some cases. The privileges or special rights of the licensee may be terminated at will if a licensor does not give cause to expect. The license under the Transfer of Property Act means permission to enter or use the property of another.

In the case of a license, possession and ownership will always remain under the control of the licensor and the licensee would only be entitled to a license. If once granted by the owner to the other party, it can be used by the person freely who is not the legal owner, but that person will not have the legal right to use the property continuously, the person can use it only up to its given validity.  There are several types of licenses like bare license, license coupled with the interest, contractual license, and license by estoppels. In terms of all of these, there are various stipulation of various features of each type of license that must be looked into in order to determine if the license is enforceable in terms of a third party purchaser more often than it is not in terms of the type of land that is registered on registration, the circumstances may vary.

This Article is Authored by Shibangi Noatia, 2nd Year BA.LL.B Student at ICFAI University Tripura. 

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