Section 24 MRC Act: “Purpose of Licence” Must Be Determined from a Holistic Reading of the Registered Agreement; Collateral Claims and Actual User Cannot Defeat Summary Eviction

Court: Bombay High Court (Civil Appellate Jurisdiction)
Coram: M.M. Sathaye, J.
Date: 07 January 2026
Case: Mr. Deepak s/o Shivkumar Bahry (Licensor/Petitioner) v. Heart & Soul Entertainment Ltd. (Licensee/Respondent)
Proceeding: Writ Petition under Article 227 challenging revisional order under Section 44, Maharashtra Rent Control Act, 1999 (MRC Act)

1. Introduction

This decision arises from a familiar but recurrent conflict under the MRC Act: a licensor seeks swift recovery of premises under Section 24 (summary possession from a licensee upon expiry/termination), while the licensee attempts to resist eviction by recharacterising the transaction and importing collateral disputes.

The petitioner (owner of a flat) granted the respondent company a registered leave and licence agreement dated 05.01.2007 for 22 months. Upon alleged breach, the petitioner terminated the licence by notice dated 04.05.2008 and initiated Section 24 proceedings. The Competent Authority ordered eviction on 15.04.2009. The respondent succeeded in revision under Section 44 before the Additional Commissioner, who set aside the eviction order on 02.09.2009.

The key issues before the High Court were:

  • Maintainability under Section 24: whether the licence was for “residential” premises/purpose, notwithstanding alleged “commercial” user.
  • Scope of revisional jurisdiction under Section 44: whether the Revisional Authority could rely on a separate film-production contract and alleged lien/charge over the flat.
  • Evidentiary approach: whether electricity bills, photographs, and assertions of commercial use can override the registered licence instrument.
  • Collateral applications: the respondent’s Interim Application seeking perjury/contempt/FIR directions.

2. Summary of the Judgment

The High Court allowed the writ petition, set aside the revisional order dated 02.09.2009, and restored the eviction order of the Competent Authority dated 15.04.2009. The Court held that:

  • The Revisional Authority’s approach was perverse because it selectively read clauses of the registered leave and licence agreement and ignored other clauses clearly indicating residential purpose.
  • Consideration of the film production contract and any alleged lien/charge was beyond the scope of Section 24 proceedings and Section 44 revision.
  • Photographs and electricity bills may indicate occupation or user, but do not prove the authority/purpose under which possession was granted.
  • The respondent’s Interim Application seeking perjury/contempt and wide-ranging directions was dismissed as beyond the petition’s remit; the Court found it to be a pressure tactic.
  • Due to conduct causing repeated hearing and wasted judicial time (including filing written submissions apparently generated using AI without verification), the respondent was saddled with costs of Rs. 50,000 payable to the High Court Employees Medical Fund.

The Court directed the respondent to hand over possession forthwith; the eviction order became executable immediately.

3. Analysis

3.1 Precedents Cited

A. Authorities relied upon by the Petitioner

  • Surendra B. Agarwal and Anr. v/s AML Merchandising Pvt. Ltd. [2010(1) Mh. L.J. 223]
    This was the central authority expressly applied. The Court drew from it that in Section 24 proceedings (and revision under Section 44), the Competent Authority cannot be derailed by pendency of civil disputes; and that issues like title/collateral rights are not to be adjudicated. Here, that principle directly invalidated the Revisional Authority’s reliance on the film production contract and alleged lien/charge.
  • Shantaram Bhikaji Jadhav v/s. The Municipal Corporation of Gr. Mumbai [W.P. No. 14187/2017 Judgment dated 13.03.2018]
    The Court used this reasoning to reject overreliance on electricity bills and similar documents: such documents may show occupation/user but not the legal authority for occupation. Applied here, photographs/three-phase electricity connection could not determine the “purpose of licence” contrary to the registered agreement.
  • Deepak S. Kavadiya V/s. Addl. Divisional Commissioner, Konkan Division and Ors. [2024 SCC OnLine Bom 3544]
    Treated as a close factual analogue: where licence clauses had conflicting references to residential/business use, the Court examined the agreement cumulatively and concluded the licence was for residential use. The present judgment adopts the same “whole-document” interpretive method and treats selective clause-reading as a legal error.
  • Harish Kumar Narang v/s. Rajni Tahil Bhambhawani [2024 SCC OnLine Bom 2301]
    Cited for the proposition that determining licence purpose requires careful consideration of licence clauses. The Court used it to reinforce that clause-by-clause cherry-picking is impermissible where the document, read as a whole, indicates residential purpose.
  • Veridical Hospitality v/s. Additional Commissioner, State of Maharashtra and Ors. [W.P. No 15222/2022 order dated 02.01.2024]
    Listed by the petitioner. While the judgment’s reasoning primarily builds on Surendra B. Agarwal, Kavadiya, Narang, and Shantaram Bhikaji, Veridical Hospitality is positioned as supportive jurisprudence on the approach to Section 24/Section 44 disputes concerning licence interpretation and revisional interference.
  • Natwarlal Mohanlal Pandya and Anr. v/s. Shamlal Ramnath Lahoti [2020 SCC OnLine Bom 5465]
    Listed by the petitioner. The judgment does not separately analyse it, but it sits within the same line of Bombay High Court authority typically dealing with rent/licence disputes and judicial review standards.

B. Authorities relied upon by the Respondent (Party in Person)

  • M. S. Ahlawat Vs. State of Haryana & Ors (MANU/SC/0687/1999)
    Cited to press for perjury proceedings. The Court declined to entertain such omnibus relief in this writ petition, holding that the IA prayers were beyond scope and that the record did not establish deliberate falsehood or interference with justice.
  • Sau. Rekha Pramodrao Deshmukh V. Shri Gajanan Maharaj Sansthan (WP/2482/2015 Judgment dated 23.12.2015)
    Distinguished on facts. That case involved a licence granted for a shop and business (sale of prasad). Here, the premises was a flat in a residential building and the registered agreement, read holistically, indicated residential purpose.
  • S.P. Chengalvaraya Naidu (Dead) by L.RS. V. Jagannath (Dead) by L.RS. And Ors. [(1993) Supp. 3 S.C.R. 422]
    Invoked to allege fraud/suppression and “unclean hands”. The Court rejected the factual foundation: it found no deliberate suppression of material facts or non-production of vital documents relevant to Section 24/44.
  • Suzuki Parasrampuria Suitings Pvt. Ltd. V. The Official Liquidator (Civil Appeal No.10322 of 2018 decided on 08.10.2018)
    Relied on for approbation/reprobation (shifting stands). The Court held it did not assist because the “possession letter” was already disbelieved for being undated and unsupported by testimony, and because the respondent did not enter the witness box.
  • K. Valarmathi & Ors. V. Kumaresan (Civil Appeal arising out of SLP (C) No. 21466 of 2024 judgment dated 29.04.2025)
    Cited to emphasise limits of Article 227 supervision. The Court accepted the general principle but held interference justified because the revisional decision suffered from perversity and apparent error (selective reading; jurisdictional overreach).
  • Central Board of Dawoodi Bohra Community & Ors. Vs. State of Maharashtra & Ors. (MANU/SC/1069/2004)
    Mentioned but found irrelevant as its applicability was not explained.

3.2 Legal Reasoning

(i) “Purpose of licence” must be gathered from the registered document as a whole

The High Court’s core move is interpretive discipline: where the foundational instrument is a registered leave and licence agreement, the “purpose” cannot be determined by isolating convenient clauses. The Revisional Authority relied on clauses 1 and 9 (“residence cum office”) but ignored clauses 2, 11, 13, and 14, including clause 13 stating the flat “shall be used for the residential purpose only” and that the licensee “shall not carry on … any business”.

The Court treated the selective reading as a form of perversity in appreciation, because it reversed the meaning derived from the document’s cumulative text. On that basis, the Court held the Section 24 application was maintainable.

(ii) Actual “commercial” user (even if assumed) does not override the contractual/licensing purpose

The judgment draws a distinction between:

  • the purpose for which premises were given on licence (a legal question anchored in the agreement), and
  • the manner in which the licensee uses the premises (a factual circumstance that may evidence breach but cannot reconstitute the grant).

Photographs of office-like fixtures and electricity material may show user; they cannot, by themselves, alter the legal character of the grant. The Court reinforced this with the reasoning from Shantaram Bhikaji Jadhav.

(iii) Section 44 revision cannot be expanded to adjudicate collateral contractual rights (lien/charge)

The Revisional Authority’s reliance on the film production contract (dated 20.02.2006) and its clause suggesting recovery rights against the petitioner’s estate was held to be outside the permissible enquiry under Section 44, which is confined to whether the Competent Authority’s order is “in accordance with law”.

The High Court treated this as a jurisdictional misdirection: Section 24/44 proceedings are not a forum to decide inter se monetary claims, liens/charges, or contractual liabilities arising from a different commercial relationship. The Court anchored this in Surendra B. Agarwal and Anr. v/s AML Merchandising Pvt. Ltd..

(iv) Evidentiary burden and the respondent’s decision not to lead evidence

The respondent filed a pursis that it did not want to lead oral evidence. The Court explicitly noted that the party in person advanced arguments and relied on documents without entering the witness box, making the defence “purely argumentative”.

This mattered especially regarding the undated “possession letter”: the Competent Authority had already found it unreliable (no date, no witnesses, no clear statement of when possession allegedly changed hands). In writ jurisdiction, the High Court treated the Revisional Authority’s contrary insinuation (“petitioner failed to show how respondent came into possession”) as unsustainable on the record.

(v) Section 30 MRC Act argument rejected on the facts as framed

The respondent argued that Section 30 (bar against conversion of residential premises into commercial premises) disentitled the petitioner. The High Court rejected this line because the agreement’s overall tenor indicated a residential licence, and no action was shown to have been initiated against the petitioner under Section 30. In effect, the Court declined to let an allegation of commercial user operate as a jurisdictional shield to defeat Section 24 proceedings.

(vi) Collateral IA for perjury/contempt/FIR: beyond remit and treated as a pressure tactic

The respondent’s Interim Application (IA/6969/2025) sought broad reliefs—perjury, contempt, direction to produce statutory approvals for a three-phase commercial connection, and even FIR directions. The Court rejected the IA as beyond the scope of the writ petition and found no factual foundation of wilful falsehood or interference with justice.

(vii) Procedural discipline and the Court’s caution on unverified AI-generated submissions

A notable feature of this decision is its institutional admonition: the Court recorded that the respondent’s written submissions bore markers suggesting AI-tool generation and even cited an untraceable decision (“Jyoti w/o Dinesh Tulsiani Vs. Elegant Associates”). The Court emphasised that AI can assist research, but the filing party (including advocates) bears responsibility to cross-verify citations and existence of authorities. Unverified “dumping” of material that wastes judicial time may attract costs—and for advocates, potentially stricter consequences (including Bar Council reference).

3.3 Impact

  • Reaffirmation of summary-eviction architecture under Section 24: Licensees cannot defeat Section 24 by importing collateral disputes (contracts, arbitral claims, monetary set-offs) into the rent-control forum.
  • Constraint on Section 44 revision: Revisional authorities must confine scrutiny to legality of the Competent Authority’s order; they cannot effectively try a different cause of action (e.g., lien/charge under a production contract).
  • Textual integrity of registered agreements: Where an agreement contains mixed expressions (“residence cum office”), courts/authorities must read the document holistically and give due weight to clauses that expressly restrict use (“residential purpose only”; “shall not carry on business”).
  • Evidentiary discipline: Documents like electricity bills/photographs may show user but not the legal basis of possession—limiting a common defence in licence-eviction matters.
  • Judicial warning on AI in litigation practice: The judgment signals that inaccurate AI-generated citations and unverified submissions may be treated as abuse of process and sanctioned in costs.

4. Complex Concepts Simplified

  • Section 24, MRC Act: A special, relatively summary remedy for a licensor to recover possession from a licensee after expiry/termination of leave and licence, particularly in the context of licensed occupation.
  • Competent Authority (Rent Act): The designated authority empowered to decide Section 24 applications.
  • Section 44, MRC Act (Revision): A limited supervisory/revisional power to see whether the Competent Authority’s order is “in accordance with law”; it is not a full rehearing on all disputes between parties.
  • Article 227 (Supervisory jurisdiction): The High Court’s power to correct jurisdictional error, perversity, or patent illegality by subordinate courts/tribunals; not an appeal on facts, but available where the decision-making is fundamentally flawed.
  • “Perversity”: A finding so unreasonable or improperly reached (e.g., selective reading of crucial clauses) that it amounts to an error apparent and warrants supervisory correction.
  • Lien/Charge over property: A claimed right to hold or fasten liability to property for recovery of money. The Court held such questions arising from a separate contract cannot be adjudicated within Section 24/44 rent proceedings.
  • Perjury/Contempt: Serious proceedings requiring a clear factual foundation of deliberate falsehood (perjury) or wilful disobedience/interference with justice (contempt). The Court found the respondent’s omnibus IA did not meet that threshold and was outside the present case’s scope.

5. Conclusion

The judgment establishes a clear operational rule for Section 24 litigation: the “purpose of licence” is determined by a holistic reading of the registered leave and licence agreement, and neither alleged commercial user nor collateral contractual disputes can be used to defeat or derail summary eviction. It also reinforces the limited scope of Section 44 revision and condemns attempts to expand rent-control proceedings into all-purpose civil/commercial adjudication.

Finally, the decision is noteworthy for its procedural and institutional message: courts will scrutinise litigation conduct that wastes judicial time, including unverified AI-assisted filings, and may impose meaningful costs where such conduct obstructs the administration of justice.