Bed & Breakfast Lodging Permitted By Tourism Corporation In Residential Premises Requires BMC License: Bombay High Court

Bombay HC has held that bed & breakfast lodging permitted by the Maharashtra Tourism Development Corporation (MTDC) in residential premises to promote tourism requires licence from BrihanMumbai Municipal Corporation (BMC) as it is a commercial use of premises.

Justice Bharati Dangre observed that section 394 of the Mumbai Municipal Corporation Act, Act, 1988 (MMC Act) restricts certain activities including 'lodging' sans Civic chief's nod. Section 394 of the MMC Act imposes a restriction upon certain activities to be carried out within limits of the Corporation except on the licence granted by the Commissioner and this includes carrying of any trade upon any premises which is specified in part IV of Schedule M or any process or operation connected with any such trade and Part IV of Schedule 'M' cover an activity of 'lodging', the court noted.

A Vile Parle resident Harmesh Chadha had let out some rooms of his bungalow as a bed & breakfast lodging following a 2013 permission under a scheme floated by MTDC. Previously since 2010 it was running on a license from ITDC under the Incredible India scheme. In January, the BMC officers inspected his premises and issued him a warning to discontinue the trade within 7 days of receipt of the letter and also issued a seizure action notice the next day under section 394 of the MMC Act.

Chadha filed an appeal against this seizure order. He argued that the BMC had no role as MTDC had permitted it and it was not classified as a "trade establishment" but was a "homestay" to promote tourism. He drew attention to the fact that he resides in the same bungalow with his family and only the ground floor rooms were let out. BMC acted as per a "mala fide" complaint by a local resident, alleged Chadha. He demanded that the BMC inspection report and the seizure action be declared bad-in-law.

BMC justified its notice to discontinue the bed & breakfast as section 394 of the MMC Act necessitated a civic licence for such activity. It pointed out that certain businesses require licenses from various authorities.

The court noted that while at first blush Chadha's argument of inapplicability of the BMC law appears attractive but on closer scrutiny, it is not so. Under the MTDC scheme "registration to operate an establishment of B&B facility in a residential house is not a purely commercial venture as what is expected is, some of the rooms of the residential house, are permitted to offer B&B facility. This, however, prima facie will not absolve the establishment to obtain necessary other permission/licences which are required for its operation. The property is not exempted completely from the tax, but certain concession is granted. In order to operate the facility as a lodging , it would necessarily require compliance of condition like health licence since the Corporation is responsible for the cleanliness and ensuring that requisite facilities being made available to the customers, who are taking benefit of the lodging . It would also require compliance of the building permit and it cannot be said that on the MTDC granting the permission, the changes in the residential premises will not have to be ratified/ authorized by the Building department of the Corporation."

The court stated that "such an establishment will necessarily have to obtain the fire safety permit as well as the permission from the FSSAI, since food is being offered to the tourist at such as establishment. Prima facie , the license which is required to be obtained u/s. 394 in order to operate a trading or activity upon the premises cannot be said to be exempted , merely on registration of the facility with MTDC."