Court Asks Hotel Leela Venture To Pay Rs. 258 Crore Royalty To Airports Authority

Court Asks Hotel Leela Venture To Pay Rs 258 Crore Royalty To Airports Authority

New Delhi: The Delhi High Court on Monday upheld its single judge decision asking Hotel Leela Venture Ltd to pay Rs. 258 crore to Airports Authority of India (AAI) as royalty for possession of its property near Mumbai International Airport.

“We affirm the destination reached by the single judge notwithstanding the route taken not being reflective of the journey undertaken by the parties before the single judge. Correcting the path, we reach the same destination,” a bench of justices Pradeep Nandrajog and Pratibha Rani said.

Hotel Leela had moved the division bench challenging the single judge’s July 15 verdict this year setting aside the arbitration award in favour of Leela Venture in 2012.
The arbitration award had declared that payment of royalty by Leela has become impossible and therefore the parties may enter into a new contract in relation to possession of the property near Mumbai Airport.

The arbitrator had also discharged Leela from liability of paying royalty to AAI.

While dismissing Leela’s plea, the division bench said, “The award is perverse and is liable to be set aside.”

AAI, which owned 29,000 square metres land near Mumbai Airport, had leased two parcels of land measuring 9,000 square meters each to Leela Scottish Lace Ltd and Leela Venture Limited leaving behind 11,000 square meters land, which initially was given on a licence to Leela.

The dispute relates to the 11,000 square meters of land which was leased to Leela in February 1996 for a period of 30 years for constructing a wing of 150 rooms to the existing hotel building.