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MANOJ SATAPATHY (LEGAL MANAGER)     05 May 2011

Lease Vs. License

Can we name a Deed as License Deed even though all the contents are of lease in nature to evade Stamp Duty and Registration Charges. Also what is its legal validity?



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 3 Replies

Bhawani Mahapatra (Law Officer)     05 May 2011

The deed will be considered as a Lease deed even if its titled as "Licese" if the intention of the parties are to create a lease. Hence the intention matter, not the title of the deed. There is a very narrow margin between lease & license. Court always exmines the intention of the parties not the title of the deed. If any document is not properly stampped, it may not be consired as evidence. Again this is always not binding. The credibility of a document cannot be discarded only because of want of stamp duty/non-registration. If the deed is of lease nature, and necessarily registrable should be registered, otherwise it may not be considered as primary evidence.

pervez (adviser)     06 May 2011

I agree with the views of my learned friend that even if the 'lease deed' is termed as 'license deed', it would be construed as lease deed only, as mere change of title would not change the character of the document. For interpretation purpose, the docuement as a whole is taken into consideration and not merely title or few lines of the document. Further, both the documents are dealt under different Acts. While  'lease deed' is dealt under Transfer of Property Act, 'license deed' is dealt under Easement Act. The lease deed creates 'right' in favour of lessee, the 'license' mere a permission. The major difference between the two is .. lease is trasferable, while the license is non transferable....

1 Like

P.K.Haridasan (Advocate)     10 May 2011

Contents of the document will make the nature of document not the name.


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