Introduction:

In the appeal Mukesh Bhanwarlal Bhandari & Ors. v. State of Gujarat & Ors. [SCA No. 7277 of 2025], the Gujarat High Court, through Justice Mauna M. Bhatt, reaffirmed that operating premises as a Home Stay or Paying Guest (P.G.) hostel without mandatory registration and necessary permissions from the concerned authorities is unlawful and cannot be permitted as a business activity. The petitioners, including the owner and operators of the premises, challenged a notice dated April 23, 2025—issued by the Ahmedabad Municipal Corporation (AMC)—mandating that they vacate the property, allegedly being used illegally as a P.G. hostel. On May 22, 2025, the court issued notice, and on June 11 the AMC ordered the premises sealed, asserting it was functioning as a P.G. hostel with eight guests, not a Home Stay, and without authorization.

Arguments:

The petitioners argued they had subsequently filed an application for Home Stay registration before the State Authority, which was pending, and secured a court order on June 13 directing the seal to be lifted. The AMC’s Government Pleader countered that the seal was removed without valid permission, the premises continued to be used illegally, and the pending application was in fact rejected by the Authority, necessitating re-sealing. The Additional Government Pleader emphasized that if the Home Stay application was rejected, the illegal operation must cease, and the prior sealing order of June 11 be enforced. Counsel for the petitioners requested a week’s time to file rejoinder and noted they had not yet received the rejection order officially. After evaluating submissions, the court observed that it was undisputed the premises remained unregistered and the Home Stay application had been rejected.

Judgement:

Consequently, the court held that the petitioners were not entitled to conduct any business activity on the premises, declaring such use illegal. Although the court maintained the June 13 order permitting the seal to be lifted, it did so only temporarily, extending it until June 17, 2025, and allowing the eight guests one week to make alternative arrangements. The matter was then listed for further hearing on June 24, 2025. Justice Bhatt also directed the petitioners to widely publicize the legal requirements for operating Home Stays or P.G. hostels, reinforcing the necessity for compliance with statutory licensing norms as mandated by municipal and state policy.