Gujarat High Court.
Unregistered Homestays and PG Hostels Illegal, says Gujarat High Court: Ahmedabad, India – June 30, 2025 – In a significant ruling aimed at regulating commercial accommodations, the Gujarat High Court has declared that operating premises as a Home Stay or Paying Guest (P.G.) hostel without proper registration and mandatory permissions from the authorities is illegal and cannot be permitted as a business. The Court, in a case involving an unregistered P.G. hostel, granted the eight guests residing there one week to make alternative arrangements, underscoring its firm stance on compliance.
Justice Mauna M. Bhatt, presiding over the case, emphasized the necessity of official authorization for such establishments. The High Court observed, “…considering the averments made in the affidavit of respondent corporation that for use of premises either as Home Stay or as P.G. Hostel, necessary registration/ permission from the concerned authority is mandatory. Moreover, conditions referred in the policy are also required to be fulfilled.” This statement highlights the legal requirement for both registration and adherence to specific policy conditions for commercial residential operations.
Beyond the immediate case, Justice Bhatt issued a broader directive for public interest, stating, “Therefore, this Court deems it appropriate to direct respondents to widely publicize by appropriate means the requirements to be fulfilled prior to use of premises either as Home Stay or P.G. Hostel.” This aims to ensure that both operators and the public are fully aware of the legal prerequisites for running such businesses.
The petition before the Court, Mukesh Bhanwarlal Bhandari & Ors. vs State of Gujarat & Ors. (SCA No. 7277 of 2025), challenged a notice issued on April 23, 2025, which directed the petitioners to vacate the premises being used as a P.G. hostel within a week. Following this, on May 22, 2025, the Ahmedabad Municipal Corporation (AMC) issued an order to seal the premises, asserting it was being used as a P.G. hostel without permission and was accommodating eight guests in addition to the owner (petitioner no. 1), who had leased it to two individuals (petitioner no. 2 and 3) running the hostel.
The petitioners contended that after the June 11 sealing order, they had filed an application to seek Home Stay registration before the State Authority, which was pending. They requested that the sealing order not be “acted upon,” leading to a subsequent order on June 13, 2025, directing the Corporation to unseal the premises.
The Government Pleader (GP) representing the Ahmedabad Municipal Corporation informed the Court that the seal had indeed been removed following the June 13 order, allowing the petitioners and the eight guests to remain. However, the GP strongly argued that the premises were being used as an unauthorized P.G. Hostel and that false claims of it being a Home Stay were made under oath. The GP urged the Court to prevent the illegal use of the premises and restore the June 11 sealing order.
Further intensifying the Corporation’s stance, the Additional Government Pleader (AGP) pointed out that the application for Home Stay registration had since been rejected. This crucial development solidified the Corporation’s argument that the petitioners should not be permitted to use the premises for commercial lodging, and that the original sealing order of June 11 should be enforced.
Counsel for the petitioners requested a week’s time to file a rejoinder, stating that the Corporation’s reply was received only a day before the current hearing and that they had not yet received the official rejection order for the Home Stay registration.
After considering all submissions, the Court observed that the notices of April 23 and June 11 were challenged based on the petitioners’ claim of using the premises as a Home Stay. The Court noted that it was undisputed that the Home Stay was unregistered and that the subsequent application for registration had been rejected.
The Court then held, “Therefore, in the opinion of this Court, the petitioners cannot be permitted to run the business by having illegal use of the subject premises.” While affirming the illegality, the Court provided a temporary reprieve: “On the above fact situation, it is directed that order dated 13.06.2025 directing the respondents to open the seal and to permit the petitioners to use the subject premises is continued for further period of one week from 17.06.2025. In the meantime, it is open for the 8 guests (other than petitioner Nos.2 and 3) to make alternative arrangements for their stay.”
The matter has been listed for further hearing on June 24, 2025, indicating the Court’s ongoing oversight of the issue and its commitment to ensuring compliance with regulations governing commercial residential establishments. This ruling serves as a clear warning to unregistered operators in the burgeoning homestay and P.G. hostel market.
*Case Title*: Mukesh Bhanwarlal Bhandari & Ors. vs State of Gujarat & Ors.**
*Case Number:* SCA No. 7277 of 2025.
