‘Overstaying licensee a trespasser’

A leave-and-licence agreement does not confer the licensee any right on the property, the Bombay high court has held. “Leave-and-licence generally does not create a right in the property or interest in the property,’’ a division bench of Justice S B Mhase and Justice Prasanna Varale said. “It is only a right to enjoy the property for a specified period without creating any interest in the property.’’ The court was adjudicating a dispute between cosmetics company L’Oréal and Global Earth Properties Developers over the premises occupied by the former at a prime location in Peninsula Tower I, Lower Parel. The judges ruled that as the 33-month leave-and-licence agreement, signed by L’Oréal for office space and 27 carparking slots, had expired, it was a “trespasser’’ on the property. The court also struck down a single judge’s observation that L’Oréal could continue to occupy the space on the basis of the L&L agreement till its legal battle with GEPD was decided. This paves the way for the GEPD to move the court to recover a compensation of Rs 1.18 lakh a day from L’Oréal for the period it has overstayed.The judges said L’Oréal could be in unlawful possession of the property according to the agreement’s terms but GEPD would still have to follow the due process of law to evict it. “It is a well-settled principle that even a trespasser cannot be removed by taking the law in one’s hands and the person entitled to possession of the property shall obtain it by following the due process of law... that is the method in a civilised society.’’ L’Oréal deposited Rs 2.12 crore and signed an agreement with Piramal, the original owners of Peninsula Towers, in November 2003. Piramal subsequently sold the property to GEPD. When the original term of the L&L agreement expired in May 2007, GEPD asked L’Oréal to move out. The matter then went to court. L’Oréal claimed that it had signed an additional document with Piramal that allowed for automatic renewal of the licence for 15 months and further renewals of 18 and 33 months; it meant it could occupy the property till November 2012. L’Oréal’s lawyers claimed that GEPD was bound to honour the agreement, which the latter denied. The high court upheld an order of a single judge refusing L’Oréal protection from eviction and a stay on the suit filed by GEPD against it. The court further said the question of validity of the additional document for renewal could be looked into by the trial court. The HC has stayed its order for eight weeks.