Supreme Court Orders Action Against Commercial Use of Residential Properties
Gurugram, Haryana | September 28, 2026: The Supreme Court has directed authorities to prioritise sealing properties being used for commercial activities in areas designated exclusively for residential use, putting the spotlight on unauthorised commercialisation across cities such as Gurugram. The court has also cautioned agencies against selective enforcement, making it clear that action must be based on legally permitted land use rather than arbitrary choices.
The September 22 directions in the ongoing Loganathan vs State of Tamil Nadu proceedings come as Gurugram’s Department of Town and Country Planning (DTCP) continues its enforcement drive against alleged violations involving paying guest accommodations, hotels and other commercial establishments operating in residential properties.
Supreme Court Makes Sealing the First Step
The Supreme Court bench of Justices Ahsanuddin Amanullah and R Mahadevan directed authorities to prioritise preventing commercial activity in areas earmarked exclusively for residential use.
Where the sanctioned land use is residential and the property has permission only for residential purposes, commercial activity cannot be carried out. If such use is found, the premises should initially be sealed.
The direction places the focus on the approved land use and building permissions applicable to each property.
Court Warns Against Selective Enforcement
The court made it clear that enforcement agencies cannot choose which properties to target while ignoring similar violations elsewhere. It warned that any “pick-and-choose approach” would invite a strict view.
The directions are significant for cities where enforcement drives have focused on commercial activities in residential neighbourhoods. Authorities must apply the rules impartially rather than taking action against only selected establishments.
Gurugram’s Sealing Drive Has Already Affected 150 Buildings
DTCP has sealed 150 buildings over the past two months as part of its enforcement drive across 32 licensed colonies in Gurugram.
The sealed properties include 98 PG accommodations, guesthouses and hotels, along with 52 residential premises found to be used for other commercial activities. Enforcement has covered areas including DLF-3, DLF-4, Sushant Lok-1 and South City-1.
The department has also undertaken sealing and demolition drives against alleged violations involving commercial establishments, PGs and unauthorised construction.
Mixed-Use Areas Will Be Treated Differently
The Supreme Court distinguished between areas clearly designated for residential use and those where the permitted land use is not clearly specified as residential or commercial.
In cases where the land-use classification is unclear, the possibility of mixed use may require consideration. Until that question is resolved, authorities must maintain the existing status quo on the ground, although proceedings can continue.
This distinction means that the rules applicable to a property will depend on its approved land-use classification, rather than simply the activity currently taking place there.
Pending Litigation Will Not Automatically Stop Enforcement
The court clarified that the pendency of litigation does not, by itself, prevent authorities from taking action.
Even where disputes over property title or other matters are pending between private parties or involving government authorities, premises can be sealed if their actual use violates the purpose for which the land or building was allotted and the plan was sanctioned.
For property owners, this means that a pending legal dispute alone may not protect a property from enforcement action over unauthorised use.
Unauthorised Structures Face Sealing or Demolition
The court also addressed structures built without any approval from the competent authority. Where a building is found to be wholly unauthorised, sealing or demolition, as permitted by law, should proceed without delay.
At the same time, the court flagged instances in which properties were sealed and then unsealed within hours or days without any intervening development, such as a response to a show-cause notice or a decision by the competent authority.
The observation reinforces the need for consistent and legally grounded enforcement.
What Property Owners and Businesses Should Check
The order makes the approved land use, sanctioned building plans and applicable building bylaws central to determining whether a property is being used lawfully.
Owners and operators of PGs, guesthouses, hotels, offices and other commercial establishments in residential areas should check the permissions applicable to their premises. A property’s actual commercial use does not, on its own, establish that such use is permitted.
The matter is listed for November 23, with states, Union Territories and authorities directed to submit updated status reports. For Gurugram, the directions could shape future enforcement across licensed colonies, while requiring agencies to apply the rules consistently and in accordance with the law.