HC dismisses Leela Group appeals against AAI eviction proceedings in Mumbai

Time of India

13-06-2025

MUMBAI
: The
Bombay high court
has dismissed appeals filed by the Leela Group against eviction proceedings initiated by the
Airports Authority of India
(AAI) over its Mumbai plots leased out for building a hotel.
The court observed that the lease period expired long ago, and eviction was not an issue amenable to arbitration under the lease agreement between AAI and Leela.
Justice Somasekhar Sundaresan dismissed the Leela Group's appeals and imposed costs of Rs 10 lakh to be paid in four weeks to AAI. The judge cited Leela's "prolonged enjoyment" of the expired leasehold land and his "assessment of the lack of reasonableness in some of the contentions raised on behalf of Leela" as reasons to impose the costs.
In 1983, AAI leased two plots, together measuring 18,000 square feet, to
Hotel Leela Venture
Ltd (Leela Group) to construct a hotel and flight kitchen, with the lease expiring in July 2012. Another lease for an AAI-owned plot of 11,000 square metres to construct a hotel wing expired on March 31, 2024. The plots were deemed public premises under the Public Premises Eviction Act. AAI initiated eviction proceedings in 2017 for the two plots.
However, on a request by senior counsel Rafiq Dada for the Leela Group, the high court, which had directed the eviction officer to begin eviction on merits swiftly, day-to-day, stayed the start of the process by four weeks. The Leela Group, represented by Dada with advocate Vivek Menon, argued that the matter must be decided only by an arbitrator as private lands were amalgamated into the 18,000 square feet and could never thus be 'public premises'.
The AAI, represented by former AG Ashutosh Kumbhakoni, argued that under the agreement, eviction and rental dues were excluded from arbitration, and also since the plots were 'public premises'.
The Leela Group "continued to enjoy the usage of the premises on expired lease rental terms and despite the expiry of the very lease periods" on the basis of a statement that no precipitate steps would be taken pending proceedings, said Justice Sundaresan.
The high court noted that Leela is itself not keen to retain the 11,000 square metres land and offered to return it.
HLV Ltd, formerly known as Hotel Leela Venture Ltd, petitioned the high court this year against the AAI.
The core issue raised was whether disputes over eviction under the lease deeds governing two plots leased by AAI would fall within the scope of arbitration agreements. The disputes, the high court noted, led to an "intricate and strategic web of filings of various proceedings" by Leela across tribunals and courts.
The high court noted that the parties explicitly agreed to the land leased to Leela as being public premises. Hence, one need not look beyond the contract to determine if eviction is excluded from the scope of arbitration. The Leela Group is at liberty to proceed with arbitration on any facet of the lease except eviction from the leased land. The high court appointed former Madras high court Chief Justice S V Gangapurwala as the sole arbitrator for all issues barring eviction.