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‘A’ executes a License Deed in favour of ‘B’ giving possession of the top floor of his residential…

A lease transfers an interest in property, while a licence permits use with legal possession remaining in the owner. Substance and intention govern, rather than the title…

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‘A’ executes a License Deed in favour of ‘B’ giving possession of the top floor of his residential house for a period of 3 years on a monthly license fee of Rs.10,000/-. ‘A’, after a period of 6 months and without any valid cause, terminates the License and seeks possession of the floor from ‘B’. Which statement correctly describes the court's approach?

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Answer and explanation

Correct answer C

A lease transfers an interest in property, while a licence permits use with legal possession remaining in the owner. Substance and intention govern, rather than the title alone. The court must determine the arrangement's true character and validity of termination before ordering possession.

Option feedback

Option A

The label alone does not establish universal revocability or immediate possession rights.

Option B

The court can examine substance and intended legal effect despite the title.

Option C

The court must determine actual legal character and effectiveness of termination.

Option D

Signing a document labelled licence does not conclusively bar examination of its substance.

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