Commercial Use Cannot Rewrite a Residential Licence: Bombay High Court Restores Eviction Order, Slams Misuse of Judicial Process

"Use May Be Commercial, But Licence Was Residential: Licencee Cannot Create Rights Contrary to Registered Agreement," Bombay High Court delivered a scathing and significant judgment in the case of Deepak Shivkumar Bahry v. Heart & Soul Entertainment Ltd., restoring an eviction order under Section 24 of the Maharashtra Rent Control Act, 1999, while holding that the revisional authority had acted beyond its jurisdiction by relying on extraneous film contracts and set-aside arbitration awards to defeat a licensor's statutory rights."

In allowing the writ petition filed by the licensor, Justice M.M. Sathaye under Article 227 of the Constitution reversed a revisional order of the Additional Commissioner (Konkan Division) passed in 2009, which had erroneously set aside an eviction decree granted by the Competent Authority. The Court held that "the revisional authority has perversely appreciated the purpose of the licence" by reading selective clauses in isolation, relying on a set-aside arbitration award, and considering irrelevant contractual obligations.

“Licence Shall Be Used For Residential Purpose Only”—Registered Agreement Prevails Over Subsequent Conduct

At the core of the dispute was whether the leave and licence agreement executed between the parties in January 2007 was for residential or commercial use. While the licensee, a film production company, contended that the flat was being used as an office and had a lien over it by virtue of a separate production agreement, the Court refused to entertain such arguments as a defence against eviction.

Justice Sathaye observed: “Clause 13 of the registered leave and licence agreement clearly stipulates that the suit flat ‘shall be used for residential purpose only’.” While acknowledging that two clauses (1 and 9) refer to "residence-cum-office" usage, the Court emphasized that they could not override the unambiguous language of other clauses mandating exclusive residential use. In particular, the Court noted, “There are three clauses—2, 11 and 13—making reference to only residential use as against two clauses suggesting mixed user. Therefore, overall reading indicates residential purpose.”

Crucially, the Court held that actual commercial use, even if established, does not alter the original licence purpose:
“Such user per se cannot legalize the commercial use of the suit flat, if the purpose of licence was residential.”

Perversity in Revisional Jurisdiction: Arbitrary Reliance on Set-Aside Arbitral Award and Film Contracts Struck Down

The High Court took strong exception to the Revisional Authority’s reliance on a film production contract and an arbitral award to conclude that the Respondent had a lien over the flat. Justice Sathaye termed this a gross overreach:
“The consideration of any other document such as film production contract and the alleged liability arising thereunder, was clearly beyond the scope of revisional jurisdiction under Section 44 of the MRC Act.”

The Court further added:
“Revisional Authority under Section 44 cannot travel beyond satisfaction of whether the Competent Authority’s order is in accordance with law. Questions of charge or lien based on unrelated contracts fall outside its domain.”

To add to the impropriety, the arbitral award relied upon by the Respondent had already been set aside by the High Court in 2011, a fact conveniently overlooked by the revisional body. The Court noted:
“The reasoning based on non-existent award is rendered invalid.”

“Respondent Did Not Enter the Witness Box”—Court Rejects Possession Letter, Finds Suppression and Evasion

Addressing the issue of possession, the Court found that the Respondent, despite challenging the Petitioner’s claims, never entered the witness box. An undated and unsupported possession letter was heavily relied upon by the Respondent to claim that possession had been returned. The Court rejected this outright:

“The letter does not bear any date or witness signature and is thus rightly disbelieved by the Competent Authority.”

Moreover, the Court pointed out that the licensee’s refusal to submit to cross-examination, coupled with evasive responses about the alleged date of possession return, further weakened his defence.

AI-Generated Submissions Without Verification Are a Hurdle to Justice—Costs Imposed for Misuse of Judicial Time

In a particularly notable segment of the judgment, the Court condemned the Respondent’s conduct, including repeated adjournments before three different Benches and the filing of voluminous, unverifiable submissions suspected to be AI-generated. Justice Sathaye was categorical:

“From the overall tenor of the written submissions and a few give-away features… this Court strongly feels that the submissions are prepared using an AI tool such as ChatGPT or alike.”

He further warned:
“Dumping documents or submissions on the Court without verifying them is not assistance to the Court. It is a hurdle in swift delivery of justice.”

A cost of ₹50,000 was imposed on the Respondent, payable to the High Court Employees Medical Fund, for abuse of process.

Baseless Allegations of Perjury and Vexatious Interim Application Dismissed

The Court also rejected an Interim Application (No. 6969 of 2025) filed by the Respondent seeking initiation of perjury and contempt proceedings against the Petitioner. Justice Sathaye held:

“There is no willful breach of court’s order or misleading of this Court or interference with administration of justice, as alleged by the Respondent.”

The IA was termed "nothing but an attempt to pressurize the Petitioner," and dismissed with strong disapproval.

Revisional Overreach Reversed—Eviction Order Restored with Executable Directions

Summarising the legal position, the Court held that the Revisional Authority’s interference with a valid eviction order under Section 24 of the MRC Act was not only jurisdictionally flawed but also marred by selective reading, reliance on irrelevant contracts, and disregard for statutory boundaries.

Justice Sathaye concluded:
“In the aforesaid facts and circumstances, the impugned order requires interference… thereby confirming the order of eviction passed by the Competent Authority.”

Accordingly, the High Court allowed the writ petition, dismissed the revisional application, and ordered the Respondent to hand over possession of the flat forthwith.

Date of Decision: 07 January 2026