Municipality May Refuse To Renew Tenant's Trade Licence Where Landlord Objects: Gauhati High Court

The Gauhati High Court has held that a municipality can insist upon written agreement for renewal of a tenant's trade licence and may refuse renewal where there is no consent from the owner of the premises.

Justice Sanjay Kumar Medhi observed, “In the instant case, there is no such consent from the owner of the premises who has also contested this proceeding by filing of an affidavit.”

The observation came in a writ petition challenging the Jorhat Municipal Board's order, cancelling the petitioner's trade licence.

The petitioner was inducted as a tenant in respect of one room in 2016, from where he started a business on the strength of a trade licence issued by the Municipal Board. The licence was renewed from time to time and remained valid until March 30, 2025.

The Court noted that there was a dispute regarding the tenancy, which was manifested by the filing of a Miscellaneous Case in 2024.

The petitioner contended that the impugned order was based on the findings of a forensic report, which had not been furnished to the petitioner. He submitted that unless the report was approved or endorsed by an appropriate court of law, it could not be taken cognizance of. The Municipal Board submitted that a written agreement was one of the essential conditions for issuance or renewal of a trade licence and that the impugned decision was based on relevant considerations.

The High Court noted that the issue before it was the renewal or issuance of a trade licence pursuant to the petitioner's application dated March 31, 2025. It said that there was an objection from the landlord and a dispute regarding the tenancy.

The Court held, “Though much emphasis has been laid on the aspect that the impugned decision is based on the forensic report, copy of which has not been furnished to the petitioner, this Court is of the prima facie opinion that de hors the said report, when an objection has been raised by the landlord, the Municipal Board cannot be found fault with in not issuing or renewing a Trade License in respect of a person who is occupying a room of the respondent of 5.”

Referring to its earlier decision, the Court noted that “the conditions precedent for renewal of Trade License includes an agreement in case such an applicant is a tenant and such condition can be insisted upon by a Municipality.”

On the plea concerning natural justice, the Court held, “This Court is of the opinion that the principles of natural justice has been duly adhered to inasmuch as the petitioner was granted adequate opportunity by issuance of notice both in terms of the order of this Court and subsequently as to why the Trade License should not be cancelled.”

It added, “In any case, the principles of natural justice, though one of the most important aspects in the dispensation of justice cannot play the role of unruly horse and in specific cases it may also amount to useless formality.”

On the scope of certiorari jurisdiction, the Court observed, “This Court is of the opinion that in exercise of certiorari jurisdiction, it is the decisionmaking process which would be within the ambit of examination in which this Court would look into the aspect as to whether the relevant factors were taken into consideration or whether the decision is based on extraneous consideration or vitiated by mala fide.”

The Court found that the Jorhat Municipal Board's order cancelling the petitioner's trade licence, “clearly appears to be based on relevant factors”.

It therefore did not go into the objection regarding the availability of an alternative remedy under Section 233 of the Assam Municipal Act and dismissed the writ petition.

Case Number: WP(C) No. 1173 of 2026

Case Title: Nand Kishore Mundhra v. State of Assam and Others

LL Citation: 2026 LiveLaw (Gau) 142

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