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Leave and License Agreement Registration
WHAT IS A LICENSE?

A license is a personal right granted to a person to do something upon immovable property of the grantor and does not amount to the creation of interest in the property itself. It is purely a permissive right and is personal to the grantee. It creates no duties and obligations upon the persons making the grant and is, therefore, revocable except in certain circumstances expressly provided for in the Act itself. The license, when granted, has not other effect to confer liberty upon the licensee to go upon the land which would otherwise be lawful.

Section 52 of Indian Easement Act, 1882 defines License as under:

“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 immovable property of the grantor, something which would, in the absence of such rights, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.”

Decisions of the Supreme Court in Associated Hotels of India Ltd. vs. R.N. Kapoor [AIR 1959 SC 1262] summed the concept of License as under:

“… Under the aforesaid section, if a document gives only a right to use the property in particular way or under certain terms while it remains in the possession and control of the owner thereof, it will be a license. The legal possession, thereof, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property.”

It important to take note of essential features of license as under:

1. A license is not connected with the ownership of land / property but creates only a personal right or obligation;
2. A license cannot be transferred or assigned;
3. License is purely permissive right arising only by permission, express or implied, and not by adverse exercise or in any other way;
4. It only legalize a certain act which would otherwise be unlawful and does not confer any interest in the property itself in or upon or over which such act is allowed to be done; and License Agreement Registration

The Stamp Duty in case of Leave and License Agreements for periods upto 5 years shall be 2% of the average annual Rent for one year.

The Stamp Duty in case of Leave and License Agreements for periods more than 5 years, but upto 10 years shall be3% of the average annual rent for one year. In addition to the Stamp Duty, a Registration fee of Rs. 1,100/- shall also be payable through a demand draft.

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