India, Nov. 5 -- The Bombay High Court on Monday set aside a 2009 order of the City Civil Court by which the niece of a deceased Parsi doctor continued to live in his flat in Churchgate, claiming that the tenancy rights of the flat, owned by the Life Insurance Corporation of India (LIC), were bequeathed to her in the doctor's will.

In a ruling expected to have far-reaching effects on transfer of tenancy rights, Justice Gauri Godse observed that the bequest of tenancy rights made through the will was in breach of a contract between the tenant and the landlord. If tenancy rights are passed on through such bequests, property could be transferred to a complete stranger, the court cautioned.

The court was hearing a case pertaining to a 2,000...