1999 (4) TMI 653

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....akes it clear that "an agreement of lease shall not be chargeable as a lease unless there is an immediate and present demise". 2. In the present case, the document is on the face of it an agreement to create a lease in future. It is, however, submitted by the respondents that in substance the document itself creates a lease. The document demises immediately and presents an interest in the land in favour of the appellants. If we examine the agreement under Clause 1 of the agreement of lease, there is a clear provision that during the period of three years from the date of possession, the licensees (as the appellants are described), shall have a licence and authority only to enter upon the land for the purpose of erecting a building or bui....

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....es.... Ground rent The lessee shall have to pay annual ground rent at the following rates, payable annually in advance, without any deductions whatsoever, on the 10th of January in each and every year: 5. Clause 8 requires that the lease, as and when executed in terms of Clause 7, shall be prepared in duplicate and all costs, charges and expenses in that connection as also in connection with the execution of the agreement and its duplicate shall be paid by the licensee alone. 6. Therefore, there is a clear intention of the parties to execute a document of lease in future. Until such document is executed, the status of the appellants is that of a licensee. In fact, we are informed by the appellants that pursuant to this agr....

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.... only for the purpose of constructing a building or buildings. Under this document, no interest in the land is conveyed in favour of the appellants. The agreement does not create a lease, nor does it demise any interest in land in favour of the appellants. In this connection, a reference may also be made to subsequent decision of this Court in State of Maharashtra v. Atur India (P) Ltd. [1994]1SCR881 where this Court has made a distinction between a lease and an agreement for lease. 9. Although it has been contended by the respondents that there is a demise of interest in the land under the said agreement, the agreement does not demise any such interest in the land. Clause 2 expressly sets out that this agreement is not to be construed a....