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Whether particular agreement creates lease or licence has to be gathered from circumstances of agreement - Party claiming benefit of lease has to prove existence of lease - Annual auctioning of right to run hotel in premises at bus stand belonging to Village Panchayat - Agreement between Panchayat and successful bidder in auction - Agreement creates

no lease but only licence. Held: There is a very clear and distinct distinction in law between the concept of tenancy and that of a licence. It is true that in certain cases an arrangement between parties regardless of what it is called or defined has been construed by a Court to be one that confers tenancy rights particularly in cases where the person has been in occupation for a long period of time. Various circumstances attendant in each of such cases must unmistakably indicate that the contract was one of tenancy arid that in order to deprive the occupant of the benefits and protection of the statute, the document was given a different colour. The first essential requirement is that these circumstances must be present but more importantly, it is for the party claiming those benefits to aver very specifically that the agreement was one of tenancy and thereafter to establish this to the satisfaction of the Court. The arrangement emanated from the usual auction of conducting rights for a period of one year and therefore even to set up a plea of tenancy would be extremely far-fetched. The agreement only conferred a licence for a period of twelve months and nothing else and further more, what needs to be taken cognizance of is the fact that the agreement and its execution itself are unchallenged. In these circumstances, the petitioner herself would be virtually estopped from even pleading any status other than that of a licensee. Under these circumstances, the respondents who are the authority in-charge of the premises would be justified in removing anybody including the petitioner, if such persons come in the way of the party to whom the contract has been awarded from functioning there. - Smt. Prathima S. Bhat v

Uppinangadi Grama Panchayath, Uppinangadi, Puttur Taluk, D.K. and Another, 1995(6) Kar. LJ. 136.

The Forest Department held an auction in respect of various items of forest produce and the auction notice required purchasers to comply with

sales tax and stamp law. The auction agreements were for a period of nine to ten months and the purchasers were merely granted the right to cut and carry away the forest produce. Held, the purchasers did not acquire any interest in the soil but merely a right to cut the forest produce and therefore the agreements were in the nature of licences and not leases so as to attract Article 31 (e) of the (Indian) Stamp Act. A study of the definition of 'immovable property' in Section 3{26) of the General Clauses Act, Section 3 of the Transfer of Property Act, Section 2(6) of the Stamp Act and Section 2(7} of the Sale of Goods Act shows that it is the creation of an interest in immovable property or a right to possess it that distinguishes a lease from a licence. No rights over the earnest deposits made by bidders pending auction were created in favour of the State Government and hence the security deposits were not in the nature of mortgages and the purchasers could not be called upon to pay stamp duty under Section 35(c) of the Stamp Act. - Board of Revenue v A.M. Ansari,

AIR 1976 SC1813

Section 105 - Easements Act, 1882, Section 52 - Karnataka Rent Control Act, 1961, Sections 21 and 31 - Lease or licence - Suit for eviction of tenant after termination of tenancy in building exempted from operation of Rent Control Act - Compromise decree under which tenant handed over portion of suit building to landlord and promised to vacate remaining portion before specified date and also agreed to pay "rent" till date of vacating - Agreement under compromise decree, held, did not create fresh lease even though word "rent" is used - Tenant has become licensee - Compromise decree can be executed when licensee has breached his promise to vacate suit building - Fresh order of eviction under Section 21 of Rent Control Act - Not necessary even though exemption from operation of Rent Control Act in respect of suit building has since been

removed. Held.-The decree was passed on 21-4-1984 much prior to 1-7- 1986. (the date on which Section 31 was struck down). If under the terms of the decree the party has agreed to abide by certain conditions and if by those conditions the petitioner has handed over a portion of the suit premises and retains some other portion of the premises, agreeing to pay damages till vacant possession is delivered, it would be difficult to go behind the decree and hold that the petitioner is still a tenant. If the petitioner is not a tenant pursuant to the compromise decree and pursuant to him handing over the possession of a portion of the suit premises, then, it would not be possible to hold that the petitioner retains the remaining portion of the property only as a tenant. Petitioner will undoubtedly be, under the terms of the compromise only a licensee and not a tenant. ... It is the intention of the parties which is the decisive test, notwithstanding the fact that the word 'rent' being used in the compromise decree. If it can be culled out from the decree passed by a Court of competent jurisdiction that the intention of the parties was that the tenant willingly acquiesced to be a licensee rather than a tenant then he will undoubtedly be a licensee and nothing more. In these circumstances the landlord was certainly entitled to execute the decree of a Civil Court. ... In the first execution case, the tenant did not question the jurisdiction of the Court but sought time to deliver vacant possession till 7-1-1991. It is only when the tenant did not deliver vacant possession on 7-1-1991 as agreed by him, the landlord was compelled to file the second execution petition. ... It is difficult to impute an intention to create a fresh lease and that pursuant to the compromise decree there was no intention for the parties to enter into a relationship of landlord and tenant. In the facts and circumstances of the case, it has to be necessarily held that the petitioner was only a licensee pursuant to the compromise decree and

that such decree is executable. - C.L Seetharam v J.C. Rudra Sharma,

1997(3) Kar. L.J. 37 (DB).