HC Says Running a Hotel Does Not Automatically Make a Landlord-Tenant Dispute a Commercial Court Matter
Jodhpur: The Rajasthan High Court has ruled in favour of Shree Vinayak Hotels in a dispute over the lease of a hotel property. The Court held that the case was essentially a landlord-tenant dispute and should be decided by the Rent Tribunal.
Shree Vinayak Hotels had taken the Desert Tulip Hotel premises on lease in August 2022 for nearly five years, up to August 2027. The agreed annual rent was ₹50 lakh. The hotel claimed that it spent around ₹2 crore on repairs, maintenance, painting and other work after taking possession.
The dispute started in 2024 when the hotel claimed that the landlord asked it to increase the annual rent from ₹50 lakh to ₹1 crore. The hotel refused, saying the rent had already been fixed under the registered lease agreement. A dispute then arose over the continuation and termination of the lease.
The hotel approached the Rent Tribunal, Jaisalmer, seeking protection from being removed from the property. However, the Tribunal said that since the property was being used to run a commercial hotel, the dispute should be treated as a commercial dispute and taken to the Commercial Court.
The Rent Appellate Tribunal also agreed with this view. The hotel then approached the Rajasthan High Court and challenged both orders.
The bench of Justice Farjand Ali disagreed with the lower tribunals. He said that the important question was what the actual dispute was about. Here, the dispute concerned the lease, rent, termination and possession of the property, not the running of the hotel business itself.
The Court also said that the Rajasthan Rent Control Act already covers commercial properties. Therefore, simply because a tenant is running a business from rented premises does not mean that every dispute automatically goes to the Commercial Court.
The High Court quashed both earlier orders and restored Shree Vinayak Hotels’ case before the Rent Tribunal.
The Court clarified that it was not deciding whether the lease was actually terminated legally, that question will now be decided by the Rent Tribunal on merits.