How leave and licence system originated

By A.T. Bureau

Posted on 02 Feb 2002

The Law of Leave and Licence has changed drastically form time to time. A person is not sure whether to give his premises on leave and licence or not. It therefore becomes, necessary to study the history of the Bombay Rent Act.

The Bombay Rent Act was promulgated on 13.2.1948. One does not know whether it was an auspicious or an in auspicious day. However I may state that when it was promulgated it was a very fair Act both for the tenants as well as the landlords. At the time of the inception of the Act it was stated in very clear terms under its section 13(I) (e) that no tenants shall give his premises or part thereof or transfer or assign the same to the third party under any circumstances.

The Government thought that the Rent Act and there would be plenty of accommodation which would be available and the law will be scrapped within a few years. However this pious hope of the Government did not fructify. In fact the housing situation deteriorated day by day and there was an acute shortage of accommodation.

Right from 1949, the community of landlords who were building of Landlords who were building houses and giving them on rent, completely vanished. The result was that only the tenants themselves who had some premises to spare, gave part of its to others with a view to make some profit. Such practice as rampant in the State of Maharashtra and especially in the city of Bombay which lasted form 1949 to 1959.

All of a sudden the Maharashtra Government issued an ordinance called ordinance III of 1959, which stated that even though there was unlawful subletting, such unlawful sub-tenant would become the lawful sub-tenant provided he has obtained the entire premises or part of the premises which was not less than a room exclusively prior to 21^st May 1959.

One fails to understand as to why the date 21 of May was selected. However the fast remains that it was selected. Moreover all such subtenant were given a right to be declared as direct x tenants of the landlords in case of the determination of the tenancy of the main tenant.

Indeed this was the first blow given to the community of Landlords. They were obliged to accept a rank outsider as their tenant when they had nothing to do so with him and had not even seen him during their lifetime. What could the landlords do under such circumstances ? They challenged Ordinance III of 1959. The Court whilst giving a classic judgement stated that the said ordinance does not offence either Section 14 or 19 of the constitutions of India and as such the said Ordinance was declared completely lawful. It is worthwhile nothing that the scarcity of housing remained and that too in a big way, housing activity,

By this time the tenants invented a new scheme calls the “Leave and License system” they went on giving their premises to outsiders, not on subtenancy basis but on leave and licence basis. It was on the assumption that leave and licence did not create any inherent right in the premises and that the licensee could be forced to vacate the premises after the licence period was over. In fact the Courts of Law gave a Stamp of authority to their contention by stating that the Licensee must quit the premises after the licence period was over.

Thereafter 14 long years passed. The Maharashtra government in 1973 passed another Act called then Maharashtra Act XVII of 1973 Section 15A. The said section stated that any licensee who had obtained the premises which was not less than room prior to 1^st February 1973 became a Deemed Tenant or a Protected Licensee of the premises.

The question here is when there is no written leave and license agreement but only an oral leave and licence what can happen ? Even those persons who have obtained the premises on oral leave and licence agreement and if they could prove the same by proper evidence , then they would also protected under the provisions of Section 15A of the Bombay Rent Act by the decision of the Courts.

Once again the system of leave and licence stopped and the tenants as well as the owners of ownership flats, stopped giving the premises on leave and licence basis. Once again here was acute shortage of residential accommodation and once again Maharashtra government started thinking about it.

Then a new Section call Section 13A-2 was introduced in the Bombay rent Act. It stated as under :

Notwithstanding anything contained in this Act, a licensee possession or occupation of premises given to him on licence for residence shall deliver possession of such premises to the landlord on expiry of the period of licence and on the failure of the licensee to so deliver the possession of the licensed premises a landlord shall be entitled to recover possession of such premises form a licensee premises a landlord shall be entitled to recover possession of such premises form a licensee on the expiry of the period of licensee by making an application to the competent. Authority and the competent Authority on being satisfied that the period of licence has expired shall pass an order for eviction of a licensee.

Any licensee who does not deliver possession of the premises to the landlord on empty of the period of licence and continues to be in possession of the licensed premises till he is dispossessed by the competent authority shall be liable to pay damages to double the rate of the licence fee or charge of the premises fixed under the agreement of licence.

By this time, being assured by the Maharashtra Government the owners of ownership flats once again started giving their premises on leave and licence basis which indeed received housing shortage to a very great extent. This law came into force from 1^st October 1987.