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Leave to Defend in Leave & License Agreements

In rental disputes, particularly those involving leave and license agreements, landlords often file summary suits under Order XXXVII of the Code of Civil Procedure (CPC) to recover possession, license fees, or security deposits quickly. Defendants (licensees) then seek leave to defend to contest the claim in a full trial. But when is this leave granted, especially in leave to defend when leave and license agreement scenarios? This post breaks down the legal principles, drawing from key judgments to help landlords and licensees navigate these cases.

Understanding the nuances can prevent procedural pitfalls. Note: This is general information based on case law; consult a lawyer for your specific situation, as outcomes vary by facts and jurisdiction.

What is a Leave and License Agreement?

A leave and license agreement grants temporary permission to use premises without transferring ownership or creating tenancy rights. Governed by the Indian Easements Act, 1882, and state rent laws like the Maharashtra Rent Control Act, 1999 (MRCA), these agreements are common for short-term occupation.

Key features:
- Licensee pays license fees, not rent.
- No exclusive possession; licensor retains control.
- Terminable as per terms, often with notice.

Even unregistered agreements can be valid and admissible for collateral purposes, though registration strengthens enforceability. (an unregistered document can still be admissible if proven) Sudha Rajendra Mahajan VS Vikas Narayan Patil

Summary Suits Under Order XXXVII CPC

Landlords prefer summary suits for their speed in recovering debts or possession from written contracts like leave and license agreements. The defendant must apply for leave to defend within 10 days of summons.

Courts grant leave if:
- A triable issue exists (bona fide defense, not sham).
- Defense is not illusory or meant to delay.

(with or without conditions) is the ordinary rule; and denial of leave to defend is an exception. Sanjay Mahadeoprasad Trivedi vs Housing Development Finance Corporation Bank Limited - 2025 Supreme(Bom) 1722

Types of Leave to Defend

1. Unconditional: If strong triable issues, no deposit required.


2. Conditional: Deposit part/full claim amount, common when partial admission.


3. Denied: Moonshine defenses.

In L&L cases, defenses often challenge agreement validity, duress, tenancy conversion, or user misuse.

When Courts Grant Leave to Defend in L&L Disputes

Courts scrutinize defenses closely. Here's what influences decisions:

1. Triable Issues on Agreement Validity

• Family Members as Licensees: Execution of L&L doesn't negate family ties, but agreement terms prevail if proven. Claims of duress dismissed if implausible. (family member can be a licensee if an agreement exists) Aruna Pandit VS Ravindra Dattatraya Kumar - 2024 Supreme(Bom) 1098


• Unregistered Agreements: Non-registration doesn't invalidate; prevails unless contradicted. (leave and license agreement is not a registered instrument lays down that responsibility of getting agreement registered is on landlord) VIMALABEN GOSALIA VS VEENA DUSHYANT MALGONNKAR - 2018 Supreme(Bom) 2047


• Commercial vs. Residential Use: Jurisdiction under MRCA Section 24 limited to residential; commercial needs civil court. Conflicting clauses resolved by intent and actual use. (jurisdiction of the Competent Authority under the Maharashtra Rent Control Act is contingent on the license being granted for residential purposes) Deepak S. Kavadiya VS Addl. Divisional Commissioner Konkan Division

2. Defenses on Tenancy Conversion

• Oral extensions or conduct rarely convert license to lease without clear evidence.


• Receipts using rent instead of license fee may raise issues, but registered L&L trumps. (She does not dispute the leave and license agreement executed between the parties.) Kantaben W/o Kantilal Naran-Das Desai v. Sarojben Jashubhai Patel - 2017 Supreme(Online)(Guj) 20

3. COVID-19 and Force Majeure

• Lockdowns don't justify forfeiting security deposits if vacation intent communicated. Emails extend agreements validly. (the implications of the COVID-19 lockdown on the contractual obligations) Play Games 24x7 Pvt. Ltd. VS Loran Leasing And Infotech Pvt. Ltd. - 2023 Supreme(Bom) 2182

4. Counter-Claims and Set-Offs

• Not maintainable in Order XXXVII suits; delays summary procedure. (A counter-claim is not maintainable in a case under Order XXXVII of the CPC) UNION OF INDIA VS RAJ KUMAR SAWHNEY - 1995 Supreme(Del) 635

5. Admitted Amounts

• If defendant admits part (e.g., fair rent), conditional leave requires deposit. (A defendant cannot be granted leave to defend a suit filed under Order XXXVII CPC without condition of depositing the amount admitted by him.) SANDEEP BANSAL AND ANR. Vs DIPESH AND ORS. - 2023 Supreme(Online)(P&H) 16164

In one case, petitioners claiming pre-existing tenancy failed; L&L upheld despite non-registration. Eviction and double license fees awarded. Sudha Rajendra Mahajan VS Vikas Narayan Patil

Conditions for Granting Leave

Courts impose conditions rationally:
- Deposit 50% claim if triable but weak defense. But harsh conditions quashed if undue hardship. (imposition of a condition for granting leave to defend should be based on rational criteria) Sanjay Mahadeoprasad Trivedi vs Housing Development Finance Corporation Bank Limited - 2025 Supreme(Bom) 1722
- Vacation Undertaking: Common in eviction suits, e.g., vacate by date X paying user charges. M/S K D R PVT LTD Vs M/S PRABHDIT ASSOCIATES PVT LTD - 2025 Supreme(Online)(DEL) 254

If a defendant raises a triable issue, they are entitled to unconditional leave to defend. Sanjay Mahadeoprasad Trivedi vs Housing Development Finance Corporation Bank Limited - 2025 Supreme(Bom) 1722

Denial examples:
- Vague repair claims without proof. UNION OF INDIA VS RAJ KUMAR SAWHNEY - 1995 Supreme(Del) 635
- Penal damages defenses invalid. Major Kuldeep Singh Jarg (Retd. ) VS Bax Global India Ltd - 2008 Supreme(Del) 170

Key Case Insights

• MRCA Eviction: Licensee must prove tenancy over L&L failure leads to eviction. Competent Authority's order upheld if residential. Zeeta S. Cruz VS Anil Pradeep Sachdev - 2014 Supreme(Bom) 1280 Deepak S. Kavadiya VS Addl. Divisional Commissioner Konkan Division


• Recovery Suits: Suit maintainable for arrears; sham defenses rejected. (The court found that the petitioners' defense was illusory) Major Kuldeep Singh Jarg (Retd. ) VS Bax Global India Ltd - 2008 Supreme(Del) 170


• Security Deposits: Refund if no breach; lockdown no excuse for forfeiture. Play Games 24x7 Pvt. Ltd. VS Loran Leasing And Infotech Pvt. Ltd. - 2023 Supreme(Bom) 2182

Parties acting on L&L terms (e.g., fee payments) reinforce validity. (Parties have acted upon the terms of Leave and License Agreement) ARUNA PANDIT AND ANR vs RAVINDRA DATTATRAYA KUMAR - 2024 Supreme(Online)(Bom) 7422

Strategic Tips for Parties

For Licensees (Defendants):
- File promptly with specific evidence (documents, witnesses).
- Raise genuine triables: duress proof, misuse allegations, registration defects.
- Avoid vague set-offs.

For Licensors (Plaintiffs):
- Ensure registered, clear agreements specifying use.
- Prove acting on terms via receipts, notices.
- Seek conditional leave to secure payments.

Key Takeaways

• Leave to defend hinges on triable issues; sham pleas fail.


• L&L agreements robust even unregistered, between family.


• Conditions like deposits protect plaintiffs but must be fair.


• Residential vs. commercial dictates forum.

In summary suits over leave and license agreements, courts balance speed with justice. Strong evidence tips scales. (grant leave to defend) Sanjay Mahadeoprasad Trivedi vs Housing Development Finance Corporation Bank Limited - 2025 Supreme(Bom) 1722

Disclaimer: This article provides general insights from case law like Aruna Pandit VS Ravindra Dattatraya Kumar - 2024 Supreme(Bom) 1098, VIMALABEN GOSALIA VS VEENA DUSHYANT MALGONNKAR - 2018 Supreme(Bom) 2047, etc. It is not legal advice. Laws vary by state; outcomes depend on facts. Seek professional counsel for your case.