 "AAI serves eviction notice to Hotel Leela for non-payment of Rs 258 cr dues")
Airports Authority of India (AAI) has issued an eviction notice to Hotel Leela in Mumbai, for non-payment of Rs 258 crore in dues.
Hotel Leela Venture Ltd, which operates the 391-room five-star property near the CSI airport, got the notice earlier this week. The decision was made public on Thursday, ironically Hotel Leela’s founder, the late C P Krishnan Nair’s, 95th birth anniversary.
Hotel Leela was among the first five-star properties to come up near the airport when the latter began operations a little over three decades earlier. This is also the Leela group’s first hotel.
The decision to issue the notice followed lengthy litigation for recovery of the dues. Last November a bench of the Delhi high court upheld an earlier decision by a single judge for paying Rs 258 crore in royalty to AAI.
The hotel had appealed against the single judge’s July 15 verdict, setting aside an arbitration award in favour of Leela Venture in 2012.
The arbitration award had declared that payment of royalty by Leela had become impossible and the parties could sign a new contract on possession of the property.
The area allotted by AAI was 29,000 sq metres, through different agreements.
“Since they (Hotel Leela) had defaulted in payment and also for other violations in terms of the agreements, and after prolonged litigation, the AAI board decided to terminate the contract. Accordingly, notices were issued for payment of dues and to handover the possession of the property latest by 31.10.2016. Since they had failed to hand over the possession and pay the dues within the stipulated date, the eviction and recovery proceedings have been commenced by the eviction officer and showcause notices have been issued for appearance on February 16, under the AAI Act of 1994,” the authority stated.
“The company is taking legal steps to defend the notice” said a Hotel Leela spokesperson.
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