There is no middle way all the required averments need to be recited in the said agreement 

It should be mentioned that at present property is given on leave and license to licensee for period of 11 months and one month notice has been given  to licensee to vacate premises 

on execution of sale deed seller shall deliver vacant possession of shop premises 

The intention of the seller is not at all appearing to be fair or bona fide.

Any such attempt on the art of the seller is to be seen as an attempt to conceal something sinister.

Either disclose everything which is been transferred or do not go for this property. 

The seller should not misrepresent that vacant possession is being delivered.

He should disclose that the property is occupied.

He may not have to use the words “Lease & Licence Agreement”, avoiding buyer discomfort.

The clause can be made in the following words 

The Vendor states that the Property is presently in the occupation of an existing occupant under an arrangement of use and occupation. The Purchaser has inspected the Property and is fully aware of the said occupation. The Vendor shall deliver to the Purchaser, on execution of this Deed, such rights, title and interest as the Vendor presently holds in the Property, together with constructive possession thereof, and the Purchaser shall thereafter be entitled to deal with the said occupant at its own discretion. It is clarified that physical/vacant possession is not being delivered on the date of execution of this Deed.”

The deed does not explicitly mention the L&L Agreement (which the buyer is trying to avoid), but still acknowledges occupation.

Buyer receives constructive possession, meaning title with right to collect rent.

Alternately the below clause can be inserted 

The Vendor has disclosed to the Purchaser all material documents relating to the existing occupation of the Property, and the Purchaser confirms having reviewed the same to its satisfaction. The Purchaser accepts the Property on an ‘as is, where is and as is occupied’ basis.”

This keeps everything transparent without naming the L&L agreement.

It is quite  strange situation. 

Not sure why the Buyer does not want the facts to be mentioned clearly, when the actually the Seller wants to!

Of course there is no legal problem without a solution. And the solution can be worked out by understanding each Parties concerns.

A straightforward standard clause cannot be suggested here unless the matter is further and clearly understood. 

Below is a legally sound clause that can be inserted into the Sale Conveyance Deed, balancing the interests of BOTH the Seller and Buyer:

• Seller is protected because the L&L Agreement is transparently disclosed.

• Buyer is protected because the clause clarifies when possession (whether actual or constructive) will pass.

• Buyer’s concern about avoiding extensive recital of tenancy terms is respected.

• Seller is not falsely declaring vacant possession, yet the Buyer’s title is not harmed.

You may insert the following paragraph into the operative part of the Sale Deed:

Draft Clause for Sale Conveyance Deed

“The Vendor hereby discloses that the Said Property is presently occupied by an existing tenant under a registered Lease and Licence Agreement (“Existing L&L”). The Purchaser acknowledges having been informed of the existence of the said tenancy. The parties agree that the Vendor shall deliver constructive possession of the Said Property to the Purchaser on the execution of this Deed, together with all rights to receive rents and enforce covenants against the tenant under the Existing L&L from the date hereof. It is further agreed that actual physical vacant possession shall be deemed delivered only upon the lawful termination or expiry of the Existing L&L or upon the tenant vacating the Said Property in accordance with law. The Purchaser confirms that it shall step into the shoes of the landlord with respect to the Existing L&L and shall have no claim against the Vendor on account of the tenant’s continued occupation.”

Conveyance Deed Clause for L&L Agreement with Occupied Possession

Insert this paragraph in the Conveyance Deed:

"The property is transferred subject to the existing Lease & License Agreement dated _________ with tenant _________. The Purchaser accepts the property in occupied possession with the tenant in occupation. All terms of the L&L Agreement shall remain binding on the Purchaser. The Seller hereby provides copies of the L&L Agreement to the Purchaser."

This satisfies both parties because:

• Seller's concern: Explicitly mentions the L&L Agreement (transparent disclosure)

• Buyer's concern: Avoids false "vacant possession" claim; uses accurate "occupied possession" language instead

• Both protected: Clear acknowledgment that buyer accepts the property with existing tenancy

1. There is basic disagreement which cannot be covered by paraphrasing the  draft of sale deed.
2. A sale deed with tenant will be attorned in favour of buyer.
3. A sale deed without stating the facts of tenancy and LANDLORD  agreement  will give right to buyer to seek cancellation of sale deed.

Possession can be either juridical possession or de facto possession 

Juridical possession means that despite the prooerty being in possession of some third party , the party still has the constructive possession of that property. In other words the possession of the third party is through the party who claims to have Juridical possession 

For example,  say there is a building occupied by various tenants. The owner of that building wants to sell it. The owner would not be in actual physical possession of the building but still he can be said to be in constructive possession or in other words the possession of the tenants of their various units in the building would be through the owner who would thus be in Juridical possession 

In above example the actual possession is with the tenants. So the tenants can be said to be in de facto possession of the building. 

Coming to your query,  the seller is not in actual physical possession but he can be said to have the constructive possession of the prooerty and the actual possession of the property by his tenant would be through the seller 

So in the sale deed the following clause can be mentioned :

Seller hereby hands over the Juridical possession of the property to the buyer. 

Alternatively the sale deed can be made without recording the fact that the property is presently occupied by the licensee. Since the seller wants to be 'upfront' about the fact that the property is occupied by the licensee, he can simply make an affidavit to that effect and give that affidavit to the buyer. In that affidavit the seller can state that he has duly informed the buyer about the property being in occupation of the licensee. The buyer can also sign that affidavit by writing 'I confirm'. This will calm the nerves of both parties. 

You must ensure you add the necessary clause regarding current status of the property and in no manner agree to write of a vacant possession. Let the lawyer vetting it add it to the draft.