Overstaying Licensee Cannot Evade Double Damages by Legal Technicalities: Bombay High Court

"Section 24(2) of the Rent Act is not a dead letter — overstaying licensees must pay double damages without forcing licensors into fresh civil suits" – In a powerful and precedent-reaffirming judgment, the Bombay High Court  dismissed a long-pending appeal challenging the execution of a 2004 order passed by the Competent Authority under the Maharashtra Rent Control Act, 1999, which had awarded double the license fee as damages against a licensee who overstayed in a licensed premises. The Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna in Arun Kumar Ohri v. Rajendra W. Khanna & Ors., held that such orders are fully executable as decrees, and that attempts to delay their execution constitute abuse of process and speculative litigation.

The case involved the appellant-licensee Arun Kumar Ohri, who had continued in occupation of the licensed premises even after the expiry of the license, prompting the licensor to approach the Competent Authority under Section 24(1) of the Maharashtra Rent Control Act. On 27 December 2004, the Competent Authority not only passed an eviction order but also awarded damages at double the license fee under Section 24(2) of the Act.

The appellant’s core argument was that such an award of damages was beyond the jurisdiction of the Competent Authority and was not enforceable as a decree. His counsel further claimed that any attempt to execute such an order was barred by limitation, and that only a civil court could award such damages through a separate suit.

Rejecting these contentions in no uncertain terms, the Court held: “The Competent Authority has the power to determine and award damages under Section 24(2) of the Rent Act, which is incidental to its power to evict. Such orders are executable as if they were decrees of a Civil Court.”

"Mischief the Legislature Intended to Suppress Cannot Be Encouraged by Delays and Dilatory Pleas"

The High Court gave a strong pushback to what it saw as repeated attempts to defeat the legislative objective behind Section 24(2), which was enacted to deter licensees from overstaying and to provide an expeditious remedy to landlords.

Emphasizing the purpose of the provision, the Bench observed: “An interpretation that would require separate civil suits for damages would undermine the very legislative intent behind Section 24. Such a view would embolden licensees to stay on in premises without consequences, knowing well that fresh proceedings would cause delay.”

The Court also rejected the appellant's contradictory pleas that the Competent Authority had no jurisdiction to award damages, but at the same time had the exclusive authority to execute such orders. Terming this as litigation strategy to tire out the other side, the Court remarked: “The appellant is bent on introducing ambiguity where there is none. This is a classic case of a litigant abusing legal process for two decades, despite having the ability to pay, simply to delay the inevitable.”

"Delays in Execution Defeat Justice": Appellant Rebuked for 21-Year Stalling Tactics

The judgment did not merely rest on points of law. It delivered a scathing critique of the appellant’s conduct, invoking the Supreme Court’s observations in Satyawati v. Rajender Singh and Vijay Karia v. Prysmian Cavi E Sistemi SRL, which condemned the use of procedural hurdles to obstruct decrees.

“The Appellant has, from 2004 onwards, substantially succeeded in frustrating the execution of a legally valid order. His conduct is not driven by inability to pay, but by a deliberate strategy to profit from the delay of the law,” the Court said.

“Judgment debtors should not abuse the process of the Court in a manner that makes courts of law instrumental in defrauding creditors,” the Bench cautioned.

No Room for “Speculative Litigation” or "Chequebook Justice"

The appellant had also argued that he had issued cheques in the past and paid similar amounts in related criminal proceedings. The Court dismissed this argument, noting that no material had been placed on record to establish adjustment or discharge of the decretal amount through such payments. It added:

“This shows the extent to which the Appellant is willing to go to deny a modest sum of Rs. 3–4 lakhs to the Respondents. Courts cannot allow speculative litigation to thrive under the illusion of justice.”

Orders by Competent Authority Are “Decrees” for Execution Purposes

The High Court affirmed that orders of the Competent Authority under the Rent Act are deemed decrees, executable either by the Competent Authority itself or by transferring them to a Civil Court under Section 39 CPC, and observed: “The argument that these orders are neither orders nor decrees is misconceived. Section 24(2) is a substantive provision creating both a right and remedy. Execution cannot be stalled based on such speculative technicalities.”

Referring to its earlier ruling in Fundacio Privada Intervida, the Bench reiterated that execution of such orders through civil courts was permissible and lawful, particularly when supported by the scheme of the Rent Act read with the CPC.

Appeal Dismissed With Exemplary Costs and Compliance Directions

The Court dismissed the Appeal with Rs. 50,000/- in costs and directed the appellant to file a compliance report on payment of the damages and costs by 16 January 2026, failing which the Respondents could initiate further execution proceedings. The Court also directed discharge of bank guarantees if the amounts had already been recovered through them.

Concluding with a message on justice and delay, the Court noted:“The Appellant’s case is emblematic of why the proverb 'the real struggle begins after obtaining a decree' rings true in Indian litigation. Such conduct, if unchecked, can erode public confidence in the justice delivery system.”

Date of Decision: December 08, 2025