AAI Ter­mi­nates Mum­bai Land Lease Con­tract of Ho­tel Leela

The Economic Times - - Brands: Creating Desire - Our Bureau

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

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