NEW DELHI: A fire that killed 23 people at a B&B in Delhi’s Hauz Rani has now exposed far more than a single administrative lapse, with an internal Municipal Corporation of Delhi (MCD) inquiry pointing to repeated clearances despite expired licences, overlooked violations, and a pattern of regulatory failure that persisted for years until it ended in tragedy.
A key finding of the MCD’s Public Health Department inquiry report, as narrated by highly placed sources, relates to the licence renewal process. The renewal application for the 2025–26 licence, which was set to expire on March 31, 2026, was submitted on April 18, 2025.
After undergoing the required process, the application appeared on the concerned official’s portal only in January 2026 and was finally approved on June 2—just one day before the tragedy.
Which means that after the licence for 2025-2026 expired on March 31, 2026, the establishment, Flourish Stay B&B, didn’t have an active licence. On June 3, the day of the tragedy, even as the fire was engulfing the building, the owner logged onto the portal and submitted a fresh renewal application for the 2026–27 licence. The application was rejected a few hours later.
The report, submitted to the MCD commissioner on Thursday, found that a health trade licence was approved by the concerned civic official after it had already expired. It flagged multiple instances of approvals being granted over time despite apparent violations at the establishment.
This raises questions about regulatory oversight within the civic body, especially as no major action has yet been taken against the officials concerned since the fire tragedy.
The establishment had been operating for nearly a decade and underwent significant expansion after its current owner purchased the property in 2022, according to sources.
The owner had obtained permission from the Delhi Tourism Department to operate a bed-and-breakfast with six rooms. However, the property later exceeded this limit and came under the regulatory jurisdiction of the MCD.
Beyond the Public Health Department, the role of other municipal departments, including the Building Department, is also under scrutiny. Three additional floors were reportedly added after the 2022 ownership change, and the permissions for the expanded structure are being reviewed.
It was also found that the establishment obtained a tea and snacks licence in 2023 but was allegedly operating as a full-fledged restaurant. Despite this, the licence continued to be renewed in 2023, 2024 and 2025.
Unable to apply for eatery licence, B&B facility opted for tea-and-snack route
The property had repeatedly applied for and received an instant tea and snacks licence over the years, even though it should have applied for an eating establishment licence. A source explained that such licences can only be granted for commercial establishments or roadside setups.
Since the premises was in an unauthorised area, an eating establishment licence was not possible. “So the rules were allegedly circumvented to grant a tea and snacks licence just so that the licence could be issued,” the source said.
Municipal authorities are required to assess land use, permissible activities and compliance with licence conditions before granting approvals, the source said, alleging that these requirements were not followed.
The inquiry also examined whether the establishment’s operations matched the category under which the licence had been granted, raising questions over how approvals continued despite the property allegedly moving beyond the permitted scope of a tea and snacks licence.
With the report now before senior MCD officials, attention is likely to turn to whether responsibility is fixed for the lapses flagged by investigators and whether disciplinary action follows against officials found to have failed in enforcing regulatory norms.
Civic body skipped land use, compliance scrutiny
Municipal authorities are required to assess land use, permissible activities and compliance with licence conditions before granting approvals, source said, alleging that these requirements were not followed. The inquiry also examined whether the establishment’s operations matched category under which the licence had been granted.
Expansion after owner bought Malviya Nagar property
The ill-fated establishment, Flourish Stay B&B, had been operating for nearly a decade and underwent significant expansion after its current owner purchased the property in 2022, sources said.