LEAVE
AND LICENSE
Why
Eleven Months only ?
By.
S. R. Agarwal, Advocate
There
is a practice prevalent in Bombay that Leave & Licence Agreement
in respect of a residential premises
is entered into and executed
for a maximum period
of 11 months.
The question arise
whether it can be
for more than 11 months.
A
licence has been
defined in Section 62 of the Indian
Easement Act, as a right to
do or continue to do something in
or upon an immovable property . It
does not transfer the
interest or create any interest in the
immovable property
, like a “ LEASE”, as
defined in Section
105 of the Transfer of
Property Act, as a right
to enjoy property
for a certain period in
consideration of the
price paid. Provisions of
Section 62 of the Indian Easements Act do not prescribe , any minimum
or maximum period for which a licence may be granted.
A
lease of a immovable property in Bombay is governed by the provisions
of Bombay Rents Hotel
& Logging House Rates
Control Act, 1947 (
Popularly known as Bombay
Rent Act, ) which no where provided , prior
to 1.2.1973 for giving a
residential premises
on Leave & Licence basis.
Still
the practice was in vogue to
give the residential premises on Leave & Licence
basis . An instrument creating a lease of immovable property
for a term of one year and above was required compulsorily to be
registered by virtue of provisions of Section 17(d) of the Indian
Registration Act. Therefore, such Leave & Licence Agreements were
being executed for a period of 11 months with duel intention namely to
avoid the stamping of such agreement and its registration and ,
secondly, to avoid interpreting such Leave & Licence
Agreement as a lease of
the immovable
property to avoid
protection against vacation
of the occupier, as per the
provisions of the
said Bombay Rent Act.
In
the year 1973 an amendment was carried out in the said Bombay Rent Act
buy the State of Maharashtra, where
section 15A was
introduced therein providing
that any person in occupation of any premises
as a License on
1.2.1973 shall be deemed to have become a tenant in respect
of the premises in
his occupiers of residential premises as licensees as on 1.2.1973 , became
the statutory tenants of the premises with the benefit of
protection against
vacation of the premises, except in accordance with the provisions of the said Bombay Rent Act.
Thought,
the State Government of Maharashtra regularised an illegal practice of
creating Leave & License in respect of residential premises, which
was contrary to the provisions of the said Rent Act, yet the
Landlords, who did not or do not require the premises for their
own use, were not willing to give the premises to others which
created imbalance
in the Society in
as much as on the one
hand sufficient was available
and on the other, people were starving
of the accommodation,
albeit for a temporary period. These were being held back by the
owners because of the apprehension of not getting the premises
vacated, when they needed in view of the protection
provided to the tenants by said Bombay Rent Act. Therefore, it
recognized the need of giving the premises on Leave & Licence
basis as a practical solution, to this problem and, consequently, made
a specific provisions by way of Section 13A2 for giving the
residential premises on licence basis, which also provided that in
case of the failure of the licencee to deliver the possession of the
licensed premises on the expiry of the period of licence , the
licencee could be summarily
evicted from the premises
by the Competent
Authority as per the provisions of
Section 31D of the said
Bombay Rent Act. Again
Section 13A2 does not provide for any specific period of a licence and
further clarifies that an Agreement of Licence in writing shall be
conclusive evidence of fact of the licence.
By virtue of Sub-Clause (V) of Section 17(2) of the Indian
Registration Act, and Instrument or Deed, which by it does not create
any right, title or interest in an immovable property does not require
registration. As stated above, a licence has been defined in Section
62 of the Indian Easements Act as an act, which does not create or
transfer any interest in an immovable property.
When
the concept of Leave and License has been recognised by the aforesaid
Bombay Rent Act by Section 13A2, which does not provide for any
specified period of licence and an agreement of Leave & Licence,
which does not create any right title
and interest in an immovable property does not
require registration under the
Indian Registration Act,
the author
is of the opinion
that a Leave & Licence Agreement
for more than 11 months is legally
valid and can be entered
into for a period for more than 11
months , and such an Agreement can
simply be executed on a
non-judicial stamp paper of Rs. 20/- as per
Bombay.
