Mumbai: In a key ruling on public land lease disputes, the Bombay High Court has upheld the Airports Authority of India’s (AAI) right to evict HLV Limited (formerly Hotel Leela Venture Limited) from three plots near the Chhatrapati Shivaji Maharaj International Airport.
On June 9, Justice Somasekhar Sundaresan dismissed multiple petitions filed by HLV, which runs The Leela Mumbai hotel, and held that the land in question qualifies as “public premises” under the AAI Act, 1994. The court further noted that, as per the lease agreements, disputes over eviction and recovery of dues are excluded from arbitration.
“The arbitration agreements executed between AAI and Leela, which are contained in the lease deeds, do not cover within their ambit the subject matter of eviction of unauthorised occupation… and recovery of associated rent and damages,” Justice Sundaresan ruled. He added that the parties had “explicitly agreed to the position that the land leased to Leela would constitute public premises.”
The case centred around three lease deeds: two executed in 1983 for 9,000 square metres each for a hotel and a flight kitchen (which expired in 2012), and a third executed in 1996 for 11,000 square metres for a new hotel wing (expired in March 2024). While all deeds contained arbitration clauses, they also excluded disputes where the Public Premises (Eviction of Unauthorised Occupants) Act applied.
In 2017, AAI initiated eviction proceedings, prompting HLV to seek court intervention. HLV’s counsel, senior advocate Rafique Dada, argued that the entire dispute ought to be referred to arbitration and that the land was part of a joint development with private land, losing its character as “public premises.” He also cited AAI’s March 2011 offer to renew the lease, which HLV accepted, although no formal renewal materialized.
AAI, represented by senior advocate Ashutosh Kumbhakoni, countered that the parties had consciously agreed that eviction matters were outside the arbitration framework. “Any dispute or difference falling within the scope of the Public Premises Eviction Act would not be arbitrable,” Kumbhakoni submitted.
The court agreed, noting that “eviction and recovery of lease rentals from public premises being outside the scope of arbitration, whether some other legislation is utilised is of no consequence to the core issue.” It also noted that HLV’s continued occupation was prima facie unauthorised and fell under Chapter VA of the AAI Act.
While eviction proceedings may continue, the court allowed arbitration for all other disputes and referred these to Justice (Retd.) Sanjay V. Gangapurwala, former Chief Justice of Madras High Court. HLV’s plea for interim relief was partly accommodated, with the court requesting AAI not to fix the next date of eviction proceedings for four weeks.
