AAI Terminates Mumbai Land Lease Contract of Hotel Leela
New Delhi: Airport Authority of India has terminated the land lease contract of Hotel Leela’s flagship Mumbai property and initiated eviction proceedings after the luxury hotel chain defaulted on payments of outstanding dues to the state-owned airport operator despite a court directive.
AAI has also launched proceedings to recover dues of ₹ 258 crore that the Delhi High Court had ordered Leelaventure to pay to the airport operator as royalty for possession of its property, AAI said in a release issued on Thursday.
It has issued a show-cause notice to Leela for appearance on February 16. “We have called them to discuss the issue. Depending on the discussions, the hotel could also be shut or sealed,” a senior AAI official said. A spokesperson from Leela said the company was exploring legal options to deal with the matter. AAI, which owns land near Mumbai airport, had under various stages awarded about 29,000 square metres of land to Hotel Leelaventure for its Mumbai hotel property. The royalty dispute is over 11,000 square metres that AAI leased to the hotelier in February 1996 for 30 years for constructing a wing of 150 rooms to the existing hotel building. The Delhi High Court had in July last year ordered Leela to pay ₹ 258 crore to AAI, setting aside an arbitration award in favour of the hotelier in 2012. A division bench of the same court in November upheld the single judge order.
Airport Authority of India initiates the process of evicting Hotel Leela from its property near Mumbai airport after the hotel major defaulted on payments