Lease Or Licence - Definition - Law Dictionary

Definition :

Lease or licence, it is the creation of an interest in immovable property or a right to possess it that distinguishes a lease from a licence. A licence does not create an interest in the property to which it relates while a lease does. There is in other words transfer of a right to enjoy the property in case of a lease. As to whether a particular transaction creates a lease or a licence is always a question of intention of the parties which is to be inferred from the circumstances of each case. For the purpose of deciding whether a particular grant amounts to a lease or a licence, it is essential, therefore, to look to the substance and essence of the agreement and not to its form, Board of Revenue v. A.M. Ansari, AIR 1976 SC 1813 (1816): (1976) 3 SCC 512: (1976) 3 SCR 661. [Transfer of Property Act, 1882, s. 105]