Quick answer: In Navina Dinesh Shetty v. Shaikh Ayub Rehman and Another (Writ Petition Nos. 7067 and 7068 of 2003), decided on 10 September 2026, Justice Sandeep V. Marne of the Bombay High Court dismissed a petitioner’s challenge to an appellate decree that had held her to be a mere licensee, not a tenant, of a shop in the APMC Market at Vashi. The Court held that an 11-month “Caretaker Agreement” created only a licence under Section 52 of the Indian Easements Act, 1882, because the owner retained possession, dominion and control of the premises throughout its term — the decisive requirement of a lease under Section 105 of the Transfer of Property Act, 1882 — notwithstanding that the agreement used the word “rent” and one clause literally recited that the relationship “shall always be landlord and tenant.” The Court treated that recital as a drafting error contradicted by the rest of the document and by the parties’ own conduct, and separately invoked Order XLI Rule 33 of the Code of Civil Procedure, 1908 to direct an inquiry into mesne profits even though no cross-objection had been filed on that point.
1. Introduction
Few questions recur in Indian property litigation as often as whether a particular arrangement is a lease or a licence. The distinction matters because a lease — particularly one attracting a state rent control statute — can harden into a virtually unremovable tenancy, while a licence is, by definition, revocable and carries no interest in the property at all. Landlords have responded to this asymmetry for decades by structuring short-term occupation arrangements as “leave and licence” agreements, and occupants have responded by arguing, whenever the arrangement runs long enough, that what was really created was a tenancy dressed up in licence language. On 10 September 2026, the Bombay High Court decided one more round of this contest, in a dispute over a shop in Navi Mumbai’s Agricultural Produce Market Committee complex that had been litigated, across four judicial forums, for thirty-two years.
The petitioner, Navina Dinesh Shetty, and her husband had occupied Gala No. 9 at Plot No. 50, APMC Market, Sector 19, Vashi, under two successive 11-month “Caretaker Agreements” executed in 1994 and 1995. When the second agreement expired in August 1996, the couple did not vacate. What followed was a trial court decree in the petitioner’s favour declaring her a tenant, an appellate reversal declaring her a mere licensee liable to eviction, and — after an interim stay kept her in possession for a further twenty-three years — a Bombay High Court petition under Article 227 of the Constitution testing which of the two views was correct.
This article sets out the facts and the procedural route by which the dispute reached the High Court, the Court’s reasoning on the lease-versus-licence question and on the separate question of whether an appellate court could order an inquiry into mesne profits without a formal cross-appeal, and what the judgment means for landlords, licensees and litigators dealing with the same recurring drafting problem.
2. Case Summary and Background
The suit premises were owned by the respondent, Shaikh Ayub Rehman. On 12 October 1994, he executed a document titled “Caretaker Agreement” in favour of the petitioner’s husband, K. Dinesh J. Shetty, “granting permission and licence” to use the premises for eleven months, from 15 October 1994 to 14 September 1995, for a lump sum described in the agreement as “Rs. 19,800/- rent for eleven months,” paid at Rs. 1,800 per month. The agreement’s clause 4(c) recorded that the respondent would remain “at all times in control, dominion and possession” of the premises, which “shall not be in the exclusive possession or use of the caretaker.” Its clause 6 allowed the respondent to “revoke the licence and permission” on four weeks’ notice. Its clause 5, however, contained an apparent contradiction: after stating that the agreement created no tenancy interest, it went on to say that “it being the express intention of the parties that the relationship between the shop owner and the caretaker shall always be landlord and tenant.”
When that agreement expired in September 1995, a second, textually identical Caretaker Agreement was executed — this time in the petitioner’s own name — for a further eleven months, ending 14 August 1996. The petitioner did not vacate at the end of that term. Instead, in 1997, she filed Regular Civil Suit No. 553 of 1997 before the Civil Judge, Junior Division, Vashi, seeking a declaration that she was a tenant of the suit premises and an injunction restraining the respondent from dispossessing her except through due process. The respondent, in turn, filed Regular Civil Suit No. 61 of 1998 seeking recovery of possession on the footing that the licence period had expired.
The Trial Court, deciding both suits on 22 January 2002, sided with the petitioner. It applied a three-part test — a right to enjoy the property, for a specified time, for valuable consideration — and concluded that because all three elements were present, a tenancy had been created; it decreed the petitioner’s suit and dismissed the respondent’s. The respondent appealed to the District Court, which allowed both appeals by a common judgment on 10 September 2003, holding that the arrangement was a licence and directing the petitioner to hand over possession and to pay Rs. 2,000 per month from 14 August 1996 until she did so. The petitioner then moved the Bombay High Court under Article 227 of the Constitution — the route required, the Court explained, because the trial court had exercised the jurisdiction of a Small Causes Court, to which Section 115 of the Code of Civil Procedure, 1908 (revision) does not apply by virtue of Section 7 of the Code. An interim stay granted in November 2003 kept the petitioner in possession for the following twenty-three years, during which she deposited the ordered Rs. 2,000 per month only until September 2012, after which — on the Court’s own finding — she occupied the premises without payment for a further fourteen years. The petitions came up for final hearing, and judgment was reserved on 28 August 2026 and pronounced on 10 September 2026.
3. Legal Analysis
3.1 The decisive test: transfer of a right to enjoy, not merely a right to use
The Court framed the central question as which of two statutory definitions the Caretaker Agreements satisfied. Section 105 of the Transfer of Property Act, 1882 defines a lease as “a transfer of a right to enjoy” immovable property for a certain time, for a price or rent. Section 52 of the Indian Easements Act, 1882 defines a licence as a grant of “a right to do… something which would, in the absence of such right, be unlawful,” where “such right does not amount to… an interest in the property.” The Trial Court had treated three elements — a right to enjoy the property, a specified duration, and valuable consideration — as together sufficient to establish a lease. The High Court held this test incomplete and, on the facts, wrongly applied: the first and controlling element of Section 105 is a transfer of interest in the property, and that transfer occurs only where the grantee obtains exclusive possession, with the grantor’s own possessory rights displaced for the duration of the grant. Where the grantor retains “control, dominion and possession” — as clause 4(c) of both Caretaker Agreements expressly provided — no interest passes, and what remains, however described, is a licence.
This restates the settled distinction between a lease’s exclusive-possession requirement and a licence’s merely personal right to use, but usefully shows how that abstract test resolves a concrete drafting dispute: the Court matched each operative clause against it, finding that the clauses granting unrestricted rights of entry and inspection, and reserving a power of unilateral revocation on notice, were each independently inconsistent with a transfer of exclusive possession.
3.2 Why the word “rent” — and even a clause literally reciting “landlord and tenant” — did not change the outcome
The petitioner’s strongest textual argument was that clause 5 of both agreements stated, on its face, that “the relationship between the shop owner and the caretaker shall always be landlord and tenant,” and that the agreements elsewhere used the word “rent” rather than “licence fee.” The Court rejected both points, for different reasons.
On the word “rent,” the Court relied on the Supreme Court’s holding in Suhas Yeshwant Chopde v. Sachhidanand D. Purekar, (1999) 5 SCC 721, where the courts below had “given more importance to the word ‘rent’” than it warranted; the Supreme Court held that use of the word was “not conclusive of the question” of the parties’ relationship. The Bombay High Court’s own earlier decision in Rajendra B. Nair v. Suresh D. Dyanmothe, 2002 (4) MhLJ 93, made the same point more fully: an agreement using “rent” for a monthly payment, while elsewhere describing the grant as a licence, retaining a right of inspection, and permitting revocation, remains “a licence pure and simple,” because “the mere use of words such as ‘rent’ or… ‘compensation’ would not be dispositive of the legal relationship between the parties.” Applying that reasoning, the isolated use of “rent” in the Caretaker Agreements — set against clauses reserving control, dominion and possession to the owner and permitting revocation on notice — did not elevate the arrangement to a tenancy.
On clause 5’s literal recital of a “landlord and tenant” relationship, the Court took a bolder step: it held the clause self-contradictory, since its first half stated that the agreement created “no interest or estate as tenant,” while its second half stated the opposite intention. Reading the clause against the rest of the document — the title “Caretaker Agreement,” the repeated use of “licence” and “permission,” the fixed 11-month term, the reservation of the owner’s possession, and the express revocation clause — the Court concluded that the clause contained “a clear typographical error,” and that the drafters had evidently meant to record that the relationship shall not be one of landlord and tenant. It reinforced this conclusion with an argument from the petitioner’s own conduct: because the second Caretaker Agreement, executed in her own name in September 1995, was textually identical to the first agreement executed in her husband’s name a year earlier, treating the second agreement as creating a tenancy would logically require treating the first as having already created one — in which case neither the husband’s vacating of the premises at the end of his own eleven months, nor the petitioner’s need to secure a fresh instrument at all, would make any sense.
This reasoning is defensible as a matter of construing the document as a whole in light of the parties’ conduct, but it is not without difficulty: characterising an express recital as a “typographical error” — rather than, say, a negotiated term the caretaker had insisted on and later found diluted elsewhere in the same document — substitutes the Court’s inference of probable intention for the parties’ own chosen words on the very point the clause addresses. The result may well be correct here, given how thoroughly every other clause pointed the other way, but the technique invites caution: a party resisting a similarly awkward but genuinely negotiated clause cannot assume a court will always resolve internal inconsistency by majority-of-clauses rather than by evidence of what was actually agreed.
3.3 The policy argument for protecting the leave-and-licence regime
Beyond construing the specific agreements, the Court offered a broader justification for resisting an expansive reading of “tenancy,” rooted in the Maharashtra Rent Control Act, 1999. It observed that Section 24 of that Act gives licensors a comparatively swift and inexpensive remedy against an overstaying licensee, including recovery of double the licence fee as a deterrent, and reasoned that this regime depends on courts holding licensors to their bargain: if genuine licences are readily converted into statutory tenancies on the strength of stray wording, owners will be discouraged from licensing premises at all, shrinking the housing and commercial stock the framework exists to keep in circulation. It described the Trial Court’s contrary approach as “disquieting,” warning that treating an 11-month licence as capable of ripening into indefinite occupation “would disturb the very fabric of licensor-licensee arrangement.”
This policy reasoning is a permissible and often-invoked justification for a textually strict approach to licence agreements in Maharashtra, but it sits somewhat uneasily beside the same judgment’s willingness, discussed above, to override the literal words of clause 5 in the licensee’s disfavour. A court concerned that licensors need certainty that their agreements will be read as written has less occasion to say so when it is the licensee’s argument for tenancy, not the licensor’s argument for licence, that depends on giving contractual language its plain meaning.
3.4 Mesne profits under Order XLI Rule 33 CPC, without a cross-appeal
The judgment’s second substantive holding concerns civil procedure rather than property law directly, but it materially affected the outcome. The respondent, without filing any formal cross-objection, argued that the appellate court’s direction to pay a flat Rs. 2,000 per month understated his loss over thirty years of unauthorised occupation, and asked the High Court to direct an inquiry into mesne profits instead. The petitioner objected that the respondent’s claim for Rs. 4,000 per month had already been adjudicated and partly rejected by the appellate court, and that he was bound by that outcome absent his own appeal.
The Court held that Order XLI Rule 33 of the Code of Civil Procedure, 1908 empowers an appellate court to “pass any decree and make any order which ought to have been passed or made,” including in favour of a party who has filed no cross-objection, relying on the Supreme Court’s holding in Banarsi v. Ram Phal, (2003) 9 SCC 606, and on Narayanrao (dead) through LRs v. Sudarshan, 1995 Supp (4) SCC 463, where a mesne profits award made under Rule 33 was upheld despite the complete absence of any pleading or issue on the point. It further held, following its own decision in M/s. Musaji Mohamadali Master and Sons v. Gulamali Dadabhai Amreliwala, 2004 SCC OnLine Bom 1169, that these powers remain available to a High Court exercising supervisory jurisdiction under Article 227, since Section 141 of the Code excludes only petitions under Article 226. On that basis, the Court substituted the appellate court’s flat monthly figure with a direction that the Trial Court hold a formal inquiry into mesne profits under Order XX Rule 12(c), covering the entire period of unauthorised occupation from 14 August 1996 to the eventual handover of possession.
4. Practical Significance
For landlords and property owners in Maharashtra who license out commercial premises, this judgment confirms that the safest drafting practice is internal consistency: an agreement granting “permission and licence,” reserving the owner’s possession and right of entry, fixing a short term, and permitting revocation on notice will likely be read as a licence even if a stray clause or an informal use of “rent” points the other way — but litigating that question can still take decades and multiple appeals, at real cost to both sides. Owners renewing caretaker or leave-and-licence agreements should treat every clause, including boilerplate recitals, as capable of being read literally against them.
For occupants and their counsel, the judgment narrows the room to argue tenancy from isolated words in an otherwise consistent licence document; a stronger route, where available, lies in showing that possession was in fact exclusive, that the licensor never in practice exercised the reserved rights of entry or revocation, or that the parties’ actual conduct — not merely a stray recital — pointed toward tenancy. The judgment’s own analysis of the petitioner’s conduct (renewing under an identical instrument rather than asserting an existing tenancy) shows that conduct evidence cuts both ways and should be marshalled carefully by whichever side it favours.
For litigators handling small-cause and Article 227 proceedings in Maharashtra, the ruling is significant procedurally: a respondent to such a petition need not file a formal cross-objection to seek enhanced relief, including a mesne profits inquiry, so long as the facts justify invoking Order XLI Rule 33 — a rule the Court held applies equally where the challenge to the underlying decree proceeds by writ petition under Article 227 rather than by conventional appeal. Counsel resisting long-running possession litigation, particularly involving occupants who continue to enjoy premises during a stay of execution, should consider raising a mesne profits claim at the earliest opportunity, since the judgment shows a willingness to grant such relief belatedly but does not guarantee that outcome as a matter of course.
5. Conclusion
Thirty-two years after two shop-owner and caretaker agreements were signed for a combined term of under two years, the Bombay High Court has confirmed what both agreements said on their face in every clause but one: that the arrangement was a licence, terminable on notice, and not a tenancy attracting rent-control protection. The judgment’s central contribution is not novel doctrine — the transfer-of-interest test under Section 105 of the Transfer of Property Act and its contrast with Section 52 of the Indian Easements Act are well settled — but a careful, clause-by-clause demonstration of how that test is applied when a document contains one genuinely awkward, internally contradictory term. Its treatment of that term as a drafting error, while consistent with the document read as a whole, is a reminder that courts retain real interpretive latitude in resolving such contradictions, latitude that will not always run in the same direction. Its procedural holding — that an appellate court, and a High Court standing in its shoes under Article 227, may order an inquiry into mesne profits without any cross-appeal — leaves the respondent in this case still without a final figure for compensation, three decades after his tenant’s licence expired, pending whatever the ordered inquiry now determines.
Citations
Primary judgment
- Navina Dinesh Shetty v. Shaikh Ayub Rehman and Navina Dinesh Shetty v. Shaikh Ayub Rehman and Another, Writ Petition Nos. 7067 and 7068 of 2003, Bombay High Court (Civil Appellate Jurisdiction), 2026:BHC-AS:37423, CNR No. HCBM010132922003, reserved 28 August 2026, decided 10 September 2026 (Sandeep V. Marne, J.), arising from the common judgment and order dated 10 September 2003 of the Additional District Judge, Thane, in Civil Appeal Nos. 51 and 52 of 2002. Source: Indian Kanoon, accessed 12 September 2026.
Precedents relied on in the primary judgment
- Suhas Yeshwant Chopde v. Sachhidanand D. Purekar, (1999) 5 SCC 721, at para 8.
- Rajendra B. Nair v. Suresh D. Dyanmothe and Another, 2002 (4) MhLJ 93, at para 11.
- Sardar Pruthisingh v. Kanchanlal Purshottamdas Desai, 2001 (2) MhLJ 948 (cited by the petitioner; distinguished).
- Banarsi v. Ram Phal, (2003) 9 SCC 606, at paras 9 and 29–32.
- Narayanrao (dead) through LRs v. Sudarshan, 1995 Supp (4) SCC 463.
- M/s. Musaji Mohamadali Master and Sons and Another v. Gulamali Dadabhai Amreliwala and Another, 2004 SCC OnLine Bom 1169.
- Sahadu Gangaram Bhagade v. Special Deputy Collector, Ahmednagar, (1970) 1 SCC 685 (referred to within Banarsi v. Ram Phal).
Statutory provisions engaged
- Section 105, Transfer of Property Act, 1882 (definition of lease).
- Section 52, Indian Easements Act, 1882 (definition of licence).
- Section 24, Maharashtra Rent Control Act, 1999 (recovery of possession from licensees).
- Sections 7, 8 and 141, Order XX Rule 12 and Order XLI Rule 33, Code of Civil Procedure, 1908.
- Article 227, Constitution of India.
This article is not legal advice and does not create an attorney–client relationship. Readers should verify the certified copy of the judgment and any subsequent clarificatory orders before relying on it, and consult a qualified advocate on the facts of their matter.