Lease and Licence

Ownership of immovable property consists of a number of rights and the owner of such property when he creates a lease, transfers to the lessee a part or some parts of rights of ownership which may include right of enjoyment of the property for a period for consideration

During the continuance of lease the right of enjoyment of the property belongs to the tenant/lessee and not to the landlord/lessor

Right of ownership as well as right of which it is composed are rights in rem i.e. it may pass on under the law and not in personem and by the lease a right in rem is transferred to the lessee whereas in case of a licence, it is only seen as a permission to do something which in the absence of such permission would be unlawful

It does not confer any right in physical property.

Lease for construction-If rights in land are given to a person for purpose of construction of a permanent nature, presumption in law would be in favour of construing such a transaction as a lease rather than. licence.

Allotment of plot of land to U by K. D. A. (Karachi Development Authority)-Allottee, according to terms of agreement, entitled to be put into possession and raise construction on the plot and on payment of full occupancy value, K. D. A. bound under agreement to grant lease of 99 years to U the allottee-Allotment, in circumstances, not a mere licence.

Housing scheme-Allottee of plot in scheme formulated under Karachi Development Authority Ordinance; 1957-Allottee not merely a licensee or sub-licensee but has a right In rem in respect of plot allotted to him.

Lease and Licence Distinction-R (a railway) giving possession of its piece of land to C in pursuance of applications it had invited `for lease of plot of land for installation of public weigh-bridge . . . . . on rent . . . the weigh-bridge to be provided and installed by the applicants"-Possession of plot taken by C and weigh-bridge installed thereon by him at his own expense

Held: nature of acts done by C required exclusive possession of land and so, despite fact that agreement was executed on printed form used for licensing (and not lease purposes), C was a lessee and not licensee.

Rent, payment of-Common incident of licence as well as lease.

S. 105-Easements Act (V of 1882), S. 52. The line of demarcation between a lease and a licence is sometimes very thin . . . . . A lease is a transfer of an interest in immovable property. Ownership of physical property consists of a number of rights and the owner of such property when he creates a lease, transfers to the lessee a part of the rights of ownership, i.e., the right of enjoyment of the property, for a period, for consideration. During the continuance of the lease the right of enjoyment of the property belongs to the tenant and not to the landlord. The right of ownership as well as the rights of which it is composed are rights in rem and not in personem and by the lease a right in rem is transferred to the lessee. On the other hand a "licence" is merely a competence to do something which except for this permission would be unlawful.