HC upholds AAI's right to evict The Leela hotel from airport land

Hindustan Times

12-06-2025

MUMBAI: In a setback for HLV Limited, the parent company of The Leela Mumbai hotel, the Bombay high court on Tuesday upheld the Airports Authority of India's (AAI's) right to evict it from three leased plots near the Chhatrapati Shivaji Maharaj International Airport (CSMIA).
A single-judge bench of justice Somasekhar Sundaresan ruled that the leased land was 'public premises' owned by AAI, and despite HLV constructing a hotel and flight kitchen on it, disputes related to eviction are excluded from the arbitration agreement signed between the parties.
HLV Limited, formerly Hotel Leelaventure Limited, had leased three parcels of land near the Mumbai airport from the AAI. Two of the deeds were executed in October-November 1983 for land parcels measuring 9,000 square metres each to construct a hotel and a flight kitchen. The third deed, pertaining to an 11,000 square metre parcel, was executed in February 1996 to construct a new hotel wing.
In 2017, five years after the first two leases expired, AAI sought to evict HLV from the land by invoking special provisions in the Airports Authority of India Act, 1994. The third lease also expired in March 2024, but HLV continued to hold the land parcels and carry on its business.
When AAI initiated the eviction proceedings, HLV challenged them, claiming that the parties had an arbitration agreement covering disputes and differences. The AAI's eviction officer dismissed the pleas in August 2019 and May 2021, prompting the company to approach the high court in appeal. HLV contended that the lease deeds were not conventional but constituted joint venture agreements between the parties.
HLV argued that the 18,000-square-metre land from the first two land parcels was amalgamated with private lands and developed together. As a result, the company said, there was no question of the land parcel remaining 'airport premises' or 'public land' as contemplated under the law.
HLV's counsel, senior advocate Rafique Dada, also claimed that the company had accepted AAI's offer in March 2011 to renew the lease of 18,000-square-metre land on the same terms and conditions for another 30 years. However, AAI later claimed that it was awaiting the approval of the competent authority for the renewal of the lease and kept on giving ad-hoc extensions, he claimed.
In September 2016, after the ad-hoc extension ended, AAI asked HLV to vacate the 18,000 square-metre land and, eventually, initiated eviction proceedings in February 2017. As for the 11,000-square-metre parcel, HLV said it was willing to hand it over to AAI.
AAI's counsel, senior advocate Ashutosh Kumbhakoni, justified the initiation of the eviction proceedings, contending that the parties had consciously chosen to keep eviction out of the scope of arbitration and resolved that the land in question was deemed to be 'public premises.'
He added that the parties also expressly agreed that any dispute or difference falling within the scope of the Public Premises Eviction Act would not be arbitrable. Therefore, such disputes were specifically excluded from the arbitration agreement, he said.
The high court accepted the AAI's arguments and held that the arbitration agreements in the lease contracts do not cover disputes related to the eviction of unauthorised occupants.
Since both the leases had expired, the court said that prima facie, HLV's 'continued occupation of the land is unauthorised and squarely brings the matter within the jurisdiction of Chapter VA (special provisions) of the AAI Act.'
Justice Sundaresan asked the AAI to expedite the eviction proceedings, if necessary, by taking them up on a day-to-day basis. However, on a request from HLV, the court deferred the proceedings by four weeks.