Bombay High Court Upholds Eviction of Vashi Licensee After 32-Year Occupation; Holds ‘Rent’ Wording Cannot Create Tenancy and Orders Mesne Profits Inquiry From 1996 Until Possession
Bombay High Court Orders Vashi Shop Licensee to Vacate After 32 Years; Holds Caretaker Agreement Did Not Create Tenancy Despite Repeated Use of Word ‘Rent’
Facts
The dispute concerned Gala No. 9, Plot No. 50, APMC Market, Sector 19, Vashi, Navi Mumbai, owned by respondent Shaikh Ayub Rehman. A “Caretaker Agreement” dated 12 October 1994 was first executed in favour of the petitioner’s husband, K. Dinesh J. Shetty, for 11 months. After its expiry, a second substantially identical agreement dated 15 September 1995 was executed in favour of petitioner Navina Dinesh Shetty, again for 11 months ending on 14 August 1996.
The petitioner claimed that these documents in substance created a tenancy, not a licence. She therefore filed Regular Civil Suit No. 553 of 1997 seeking a declaration of tenancy and protection against dispossession. The respondent-owner filed cross-suit Regular Civil Suit No. 61 of 1998 seeking possession on the ground that the licence had expired.
The Trial Court accepted the petitioner’s case and declared her a tenant. However, the Additional District Judge, Thane reversed that finding on 10 September 2003, held her to be only a licensee, decreed possession in favour of the owner and directed payment of ₹2,000 per month from 14 August 1996 until possession was delivered.
The petitioner challenged that appellate judgment in Writ Petition Nos. 7067 and 7068 of 2003. The possession decree remained stayed during the pendency of the petitions. She deposited ₹2,000 per month only until September 2012 and thereafter stopped making deposits.
Issues
The principal questions before the High Court were:
- Whether the two “Caretaker Agreements” created a lease/tenancy or merely a licence.
- Whether repeated use of the word “rent” and the clause describing the relationship as “landlord and tenant” could override the remainder of the contractual terms.
- Whether the petitioner’s continued occupation after 14 August 1996 was unauthorized.
- Whether the High Court, while exercising jurisdiction under Article 227, could invoke Order XLI Rule 33 CPC in favour of the respondent-owner despite his having filed no independent appeal or cross-objection.
- Whether the fixed direction of ₹2,000 per month should be replaced by an inquiry into mesne profits.
Petitioner’s Arguments
The petitioner argued that the agreements themselves demonstrated an intention to create tenancy. Clause 5 expressly referred to the relationship as that of “landlord and tenant”, while the word “rent” appeared at several places, including in receipts acknowledging payment.
She relied on Section 105 of the Transfer of Property Act, 1882, arguing that all essential requirements of a lease existed: a right to enjoy immovable property, a defined period and valuable consideration. She also emphasised that she and her husband were operating a restaurant/hotel and had taken the adjoining premises for business expansion, which was allegedly inconsistent with a temporary licence.
As regards mesne profits, she argued that the owner had originally sought ₹4,000 per month, but the Appellate Court consciously awarded only ₹2,000. Since the owner had never challenged that determination, he could not seek enhancement indirectly in her Article 227 petitions.
Respondent’s Arguments
The owner argued that the agreements repeatedly and expressly described the arrangement as one of licence and permission and reserved control, possession and dominion over the premises in his favour.
He submitted that the sporadic use of the word “rent” was not determinative of the true legal relationship. The documents had to be construed as a whole.
The respondent further highlighted that what was intended as an aggregate 22-month licence arrangement had effectively continued for 32 years because of litigation. The petitioner had also stopped depositing even ₹2,000 per month after September 2012. He therefore sought an inquiry into mesne profits through the Court’s power under Order XLI Rule 33 CPC.
Analysis of the Law
Licence Versus Lease Depends on Substance, Not Labels
The Court contrasted Section 105 of the Transfer of Property Act, which requires transfer of a right to enjoy immovable property, with Section 52 of the Indian Easements Act, under which a licence merely permits use without creating any interest in the property.
The decisive question was therefore whether any proprietary or possessory interest had actually been transferred.
The agreements expressly provided that the owner would retain control, dominion and possession, that the caretaker’s possession would not be exclusive and that the owner could enter for inspection. The licence could also be revoked. In those circumstances, the Court held there was no transfer of interest necessary to constitute a lease.
Use of the Word “Rent” Is Not Conclusive
The agreements did use “rent” in a few places. However, the High Court held that this did not automatically transform the transaction into a tenancy.
The legal character of the relationship had to be gathered from the holistic reading of the instrument, not isolated terminology. The Court observed that parties commonly use the word “rent” loosely even when referring to licence fees or monthly compensation.
“Landlord-Tenant” Language Was a Typographical Error
Clause 5 created an apparent contradiction. Its first part expressly declared that nothing in the agreement would create any estate or interest “as tenant or otherwise”, but its latter part stated that the relationship would always be “landlord and tenant.”
Reading the agreement as a whole, the High Court concluded that the latter expression was an obvious typographical error. The intended wording was that the relationship would “not” be that of landlord and tenant.
The petitioner could not rely upon that isolated drafting mistake when virtually every other contractual stipulation indicated a temporary licence.
Conduct of the Parties Confirmed Licence
The Court found the petitioner’s own conduct particularly significant.
If the first 1994 agreement had already created tenancy rights in her husband, there would have been no reason for him to vacate upon expiry of 11 months and for the petitioner to obtain a fresh caretaker agreement in her own name.
The second agreement, containing virtually identical terms, demonstrated that both parties treated the earlier arrangement as having expired and intended another temporary licence.
Precedent Analysis
The High Court relied on Suhas Yeshwant Chopde v. Sachhidanand D. Purekar, where the Supreme Court held that use of the word “rent” in an agreement or receipts is not conclusive in determining whether the relationship is one of landlord-tenant or licensor-licensee.
It also relied on Rajendra B. Nair v. Suresh D. Dyanmothe, where this Court held that references to “rent” were insufficient to create tenancy when the remaining contractual clauses showed temporary, non-exclusive occupation, retained access by the owner and revocability of the licence.
For mesne profits, the Court relied upon Narayanrao v. Sudarshan, where the Supreme Court upheld the High Court’s invocation of Order XLI Rule 33 CPC to award mesne profits even though there was no specific prayer or issue framed before the Trial Court.
It also referred to Sattarsha Dibarsha v. Ajizabi Dilbarsha, which recognised the broad remedial power under Order XLI Rule 33 to do complete justice, even in the absence of an appeal or cross-appeal, though such jurisdiction is to be exercised in appropriate and exceptional cases.
Court’s Reasoning
Justice Sandeep V. Marne held that the Trial Court had fundamentally erred in converting a straightforward 11-month licence into statutory tenancy.
There had been no transfer of any interest in the property. The petitioner merely received permission to use the premises, while legal possession, control and dominion remained with the respondent-owner. Consequently, the first and essential requirement of a lease under Section 105 TPA was absent.
The Court strongly criticised the Trial Court’s approach, observing that indiscriminately converting leave-and-licence arrangements into protected tenancies could discourage owners from making properties available under licences and undermine the statutory leave-and-licence framework.
It therefore agreed with the Appellate Court that the petitioner was only a licensee and that there was no justification to interfere with the decree directing her to surrender possession.
The Court was, however, dissatisfied with the fixed compensation of ₹2,000 per month. The licence had expired on 14 August 1996, yet the petitioner remained in the premises for approximately three decades and had stopped even depositing ₹2,000 after September 2012.
It held that an Article 227 court could, in the circumstances, invoke the principles underlying Order XLI Rule 33 CPC and grant appropriate relief even to a respondent who had not independently challenged the decree. Since possession after 14 August 1996 was unauthorized, the proper course was an inquiry into actual mesne profits under Order XX Rule 12 CPC rather than continuation of the outdated fixed amount.
Conclusion
The Bombay High Court dismissed both writ petitions and upheld the decree requiring Navina Dinesh Shetty to surrender possession of the Vashi shop.
She was specifically directed to hand over possession to the respondent on or before 30 September 2026.
At the same time, the Court modified the Appellate Court’s monetary direction. Instead of ₹2,000 per month, the Trial Court was directed to conduct an inquiry into mesne profits under Order XX Rule 12 CPC, with the petitioner liable for the amount ultimately determined from 14 August 1996 until actual delivery of possession.
There was no order as to costs.
Case Details
Case: Navina Dinesh Shetty v. Shaikh Ayub Rehman
Court: Bombay High Court, Civil Appellate Jurisdiction
Citation: 2026:BHC-AS:37423
Case Numbers: Writ Petition Nos. 7067 and 7068 of 2003
Judge: Justice Sandeep V. Marne
Reserved: 28 August 2026
Pronounced: 10 September 2026
Result: Both petitions dismissed; possession to be handed over by 30 September 2026; fixed ₹2,000 monthly compensation replaced by mesne-profits inquiry from 14 August 1996 until possession is delivered.
