Licences, and Licence against Lease and Easement
Chapter Fifty-Four
Syllabus topic 3.2, "Indian Easements Act, 1882"
Pages 289 to 295 of 378
In one line
A licence is bare permission to do something on another's land that would otherwise be a trespass, it creates no interest at all, and it can usually be taken back.
In exam wording: section 52 provides 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 right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence.
The definition, broken down
"Grants to another, or to a definite number of other persons." A licence is personal to identified people. A permission to the public at large is not a licence but a dedication.
"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." This is what a licence is for: it makes lawful what would otherwise be a trespass.
"Does not amount to an easement or an interest in the property." The defining negative. A licence gives no interest in land at all. That single fact generates every other rule in the Chapter: it is not transferable, it does not bind a transferee of the land, and it is generally revocable.
Sections 53 to 55: granting a licence
Section 53: who may grant. A licence may be granted by anyone in the circumstances and to the extent in and to which he may transfer his interests in the property affected. This is the same measure as section 8 for easements.
Section 54: express or implied. The grant may be express or implied from the conduct of the grantor; and, importantly, an agreement which purports to create an easement, but is ineffectual for that purpose, may operate to create a licence.
That last limb is a practical safety net. A failed easement is not simply nothing; it may still make the user lawful as a licence.
Section 55: accessory licences. All licences necessary for the enjoyment of any interest, or the exercise of any right, are implied in the constitution of such interest or right, and are called accessory licences.
The illustration: A sells the trees growing on his land to B. B is entitled to go on the land and take away the trees. The sale of the trees would be worthless without the right to fetch them, so the law implies it.
Section 56: transferability
Unless a different intention is expressed or necessarily implied, a licence to attend a place of public entertainment may be transferred by the licensee; but save as aforesaid, a licence cannot be transferred by the licensee or exercised by his servants or agents.
Licences, and Licence against Lease and Easement
The general rule is that a licence is personal and untransferable, which follows from its creating no interest in the land. The cinema ticket is the exception, and it is a sensible one: nobody supposes that the theatre cares which member of the public occupies the seat.
The Act's illustrations:
(a) A grants B a right to walk over A's field whenever he pleases, not annexed to any immovable property of B. The right cannot be transferred. Note the reasoning: no dominant heritage, so it is a licence and not an easement, and so untransferable.
(b) The Government grants B a licence to erect and use temporary grain-sheds on Government land. In the absence of express provision to the contrary, B's servants may enter to erect the sheds, deposit grain and remove it.
Illustration (b) qualifies the "servants or agents" bar sensibly: where the licence is of a kind that can only be enjoyed through employees, their entry is within it.
Sections 57 to 59: the grantor's duties, and his transferee
Section 57: disclose dangerous defects. The grantor is bound to disclose any defect in the property likely to be dangerous to the person or property of the licensee, of which the grantor is aware and the licensee is not.
Section 58: do not make it unsafe. The grantor is bound not to do anything likely to render the property dangerous to the person or property of the licensee.
Both duties are about safety, not about the enjoyment of the licence, and that is the point. A licensor owes very little, but he may not lay a trap.
Section 59: the transferee is not bound. When the grantor transfers the property affected, the transferee is not as such bound by the licence.
This is the most practically important section in the Chapter and the sharpest contrast with a lease. A tenant's interest binds a purchaser of the reversion; a licensee's permission does not bind the purchaser at all, and his remedy is against his grantor alone.
Sections 60 to 62: revocation
Section 60: when revocable. A licence may be revoked by the grantor, unless:
(a) it is coupled with a transfer of property and such transfer is in force; or
(b) the licensee, acting upon the licence, has executed a work of a permanent character and incurred expenses in the execution.
The rule is that a licence is revocable, and the two exceptions are principled. Under (a) the licence is part of a proprietary transaction and cannot be pulled out of it. Under (b) the licensee has spent money on permanent work on the faith of the permission, and it would be unjust to let the grantor resile: this is the statutory form of what is often called licence coupled with equity.
Licences, and Licence against Lease and Easement
Note (b)'s two limbs together: a work of a permanent character and expenses incurred. Neither alone is enough.
Section 61: express or implied revocation. Revocation may be express or implied.
The Act's illustrations:
(a) A grants B a licence to use a path across his field. A, intending to revoke, locks a gate across the path. The licence is revoked.
(b) A grants B a licence to stack hay on his field. A lets or sells the field to C. The licence is revoked.
Section 62: when deemed revoked. A licence is deemed to be revoked:
(a) when, from a cause preceding the grant, the grantor ceases to have any interest in the property; (b) when the licensee releases it, expressly or impliedly; (c) where it was granted for a limited period, or on a condition that it should become void, and the period expires or the condition is fulfilled; (d) where the property is destroyed, or by superior force so permanently altered that the licensee can no longer exercise his right; (e) where the licensee becomes entitled to the absolute ownership of the property; (f) where the licence was granted for a specified purpose and the purpose is attained, abandoned, or becomes impracticable; (g) where the licence was granted to the licensee as holding a particular office, employment or character, and that ceases to exist; (h) where the licence totally ceases to be used as such for an unbroken period of twenty years, and the cessation is not in pursuance of a contract between the parties; (i) in the case of an accessory licence, when the interest or right to which it is accessory ceases to exist.
The list is closely parallel to the extinction of easements in sections 37 to 48, which is worth noticing: the same events end both, because both depend on the grantor's continuing interest and the grantee's continuing use.
Sections 63 and 64: the licensee's protection
Section 63: rights on revocation. Where a licence is revoked, the licensee is entitled to a reasonable time to leave the property affected by it and to remove any goods he has been allowed to place on it.
Section 64: rights on eviction. Where a licence has been granted for a consideration, and the licensee, without any fault of his own, is evicted by the grantor before he has fully enjoyed the right, he is entitled to recover compensation from the grantor.
Licences, and Licence against Lease and Easement
So even a revocable licence is not a trap door. The licensee gets time and his goods under section 63, and, if he paid, compensation under section 64.
Lease, licence and easement
This is the comparison Module III exists to make, and it should be stated as a table and then applied on the facts.
The distinction between a lease and a licence is decided on substance, not the label, and the working test is exclusive possession together with the parties' intention. A document called a leave and licence agreement which in truth confers exclusive possession for a term at a rent is a lease, and the tenant gets everything a lease carries, including the protection of rent legislation.
The distinction from an easement is easier: an easement requires a dominant heritage and creates an interest in the servient land; a licence has neither. Illustration (a) to section 56 turns on exactly that.
A worked example
Jaywant owns a compound at Nanded.
He allows Kirti to walk across it to reach the road, she owning no adjoining land. No dominant heritage, so it cannot be an easement, and it creates no interest. A licence, and on illustration (a) to section 56 it is not transferable.
He sells the compound to Lata. Under section 59 Lata is not bound by Kirti's licence, and on illustration (b) to section 61 the licence is revoked by the transfer. Kirti's remedy lies against Jaywant.
Change the facts: Jaywant allows Kirti to build a permanent shed in the compound for her business, and she spends Rs. 4 lakh doing so. Under section 60(b) the licence is not revocable: she acted on the licence, executed a work of a permanent character, and incurred expenses.
He sells Kirti the mango trees standing in the compound. Under section 55 and its illustration she has an accessory licence to enter and take them away, implied by law.
He grants her a licence to occupy a stall during a ten-day fair, for a fee, and turns her out on day three through no fault of hers. Under section 63 she is entitled to a reasonable time to leave and to remove her goods, and under section 64, the licence being for consideration and the eviction being without fault on her part, she may recover compensation.
He locks a gate across the path intending to end Kirti's permission. Under section 61 illustration (a) the licence is revoked by that act.
A defect in the compound wall is likely to injure Kirti and Jaywant knows of it while she does not. Under section 57 he is bound to disclose it, and under section 58 he must not himself do anything likely to render the property dangerous to her.
Licences, and Licence against Lease and Easement
Kirti stops using the path for twenty-two years, with no contract about it. Under section 62(h) the licence is deemed revoked.
Finally, suppose Jaywant had given Kirti exclusive possession of a room in the compound for three years at a monthly payment, calling it a licence. Substance governs: exclusive possession for a term at a rent makes it a lease under section 105 of the Transfer of Property Act, and the label does not save it.
What it does NOT mean
A licence creates no interest in land, which is why it is neither transferable nor binding on a transferee.
A licence is not always revocable. Sections 60(a) and (b) are real exceptions.
Section 60(b) needs both limbs: a permanent work and expenses incurred.
A transferee of the property is not bound, however much he knew of the licence.
Not every licence is untransferable. A licence to attend a place of public entertainment may be transferred.
A failed easement is not nothing. Section 54 lets it operate as a licence.
A revoked licensee is not a trespasser at once. He gets reasonable time to leave and to remove his goods.
The label is not decisive as between lease and licence; exclusive possession and substance are.
Distinctions
| Lease, TPA s.105 | Licence, s.52 | Easement, s.4 | |
|---|---|---|---|
| Interest in land | Yes, a right to enjoy | None | Yes, a right in the servient land |
| Dominant heritage | Not required | Not required | Required |
| Exclusive possession | Usually yes | No | No |
| Transferable | Yes, TPA s.108(j) | No, except public entertainment | Only with the dominant heritage |
| Binds a transferee of the property | Yes | No, s.59 | Yes |
| Revocable | Only on the s.111 grounds | Yes, subject to s.60 | No, extinguished only under ss.37 to 48 |
| Remedy on wrongful ouster | Possession | Compensation, ss.63 and 64 | Compensation and injunction, ss.33 and 35 |
| Licence irrevocable under s.60 | |
|---|---|
| (a) | Coupled with a transfer of property, the transfer being in force |
| (b) | The licensee, acting on the licence, has executed a work of a permanent character and incurred expenses |
Quick revision
- Licence: permission to do on the grantor's land something otherwise unlawful, which is not an easement and not an interest in the property.
- s.53 granted to the extent the grantor may transfer his interest; s.54 express or implied, and a failed easement may operate as a licence; s.55 accessory licences are implied, as with the sale of standing trees.
- s.56: a licence is not transferable, and not exercisable by servants or agents, except a licence to attend a place of public entertainment.
- s.57 disclose dangerous defects known to him and not to the licensee; s.58 do nothing to make the property dangerous; s.59 a transferee of the property is not bound.
- s.60: revocable, unless coupled with a subsisting transfer of property, or the licensee has executed permanent work and incurred expenses.
- s.61 revocation express or implied; locking a gate, or letting or selling the land, revokes.
- s.62: deemed revoked in nine cases, including twenty years' total non-use, the grantor losing his interest, attainment or impracticability of the purpose, the licensee acquiring absolute ownership, and the ending of the office or character for which it was granted.
- s.63 reasonable time to leave and remove goods; s.64 compensation where the licence was for consideration and the licensee is evicted without fault.
- Lease against licence turns on exclusive possession and substance, not the label.
Licences, and Licence against Lease and Easement
Test yourself
1. Define a licence and state the feature that distinguishes it from an easement. A licence is a right granted to a person, or a definite number of persons, to do or continue to do something in or upon the grantor's immovable property which would otherwise be unlawful, and which does not amount to an easement or an interest in the property. Unlike an easement, it requires no dominant heritage and creates no interest in the land.
2. Is a licence transferable? No, save that a licence to attend a place of public entertainment may be transferred unless a different intention is expressed or necessarily implied. Otherwise it cannot be transferred by the licensee or exercised by his servants or agents.
3. Does a purchaser of the property take subject to an existing licence? No. Section 59 provides that when the grantor transfers the property affected, the transferee is not as such bound by the licence, and on illustration (b) to section 61 the transfer itself revokes it.
4. When is a licence irrevocable? Where it is coupled with a transfer of property and that transfer is in force, or where the licensee, acting upon the licence, has executed a work of a permanent character and incurred expenses in the execution.
5. What is an accessory licence? A licence necessary for the enjoyment of an interest or the exercise of a right, implied by law in the constitution of that interest or right, as where the buyer of standing trees may enter the land to take them away.
6. Name four ways in which a licence is deemed revoked. The grantor ceasing, from a cause preceding the grant, to have any interest in the property; release by the licensee; expiry of a limited period or fulfilment of a dissolving condition; destruction or permanent alteration of the property by superior force; the licensee acquiring absolute ownership; attainment, abandonment or impracticability of the specified purpose; the ending of the office or character for which it was granted; total non-use for twenty years otherwise than under a contract; and, for an accessory licence, the ending of the right to which it is accessory.
Licences, and Licence against Lease and Easement
7. What is a licensee entitled to when his licence is revoked? A reasonable time to leave the property and to remove any goods he was allowed to place on it, under section 63; and, where the licence was for consideration and he is evicted by the grantor without fault of his own before fully enjoying it, compensation under section 64.
8. How is the line between a lease and a licence drawn? By the substance of the arrangement, principally whether exclusive possession was given, and by the intention of the parties. The name the parties use is evidence of intention and no more, so a document called a licence which confers exclusive possession for a term at a rent is a lease.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.