Eviction From Public Premises Not Arbitrable | Bombay High Court Holds Lease Disputes Outside Scope Of Arbitration Clause And Directs Tribunal Cannot Confer Jurisdiction On Itself
Sanchayita Lahkar
The High Court of Bombay Single Bench of Justice Somasekhar Sundaresan has held that arbitration agreements under lease deeds executed with the Airports Authority of India do not cover disputes concerning eviction of unauthorised occupants or the recovery of rent and damages. The Court declared that such issues are not arbitrable and fall outside the scope of private adjudication. Accordingly, arbitral awards that purported to grant eviction-related reliefs were set aside, and the parties were directed to approach the statutory authority designated for eviction under public premises law. Monetary reliefs granted under the awards were modified, and limited disputes were referred to a former Chief Justice for fresh arbitration.
The judgment adjudicates multiple proceedings involving HLV Limited (formerly Hotel Leela Venture Ltd.) and the Airports Authority of India (AAI), concerning lease agreements executed for two parcels of land at the Chhatrapati Shivaji Maharaj International Airport in Mumbai. The lands—referred to as the 18,000 sq. metre land and the 11,000 sq. metre land—were originally leased for the purpose of constructing and operating a hotel and flight kitchen.
The proceedings comprised two arbitration appeals and two Section 11 applications under the Arbitration and Conciliation Act, 1996. The arbitral awards had directed HLV to vacate both land parcels and pay arrears and damages, including 18% annual compound interest. HLV challenged these awards primarily on the ground that the disputes regarding eviction from public premises and possession were not arbitrable under law or the terms of the lease.
The lease deeds executed in 1986 and 2002 included specific references to the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, and the agreements recognized the public character of the lands leased. The core contention by HLV was that since the lands constituted public premises, the statutory procedure under the Public Premises Act was the exclusive mechanism for eviction and recovery.
The Court was also asked to consider whether a subsequent statutory enactment—Chapter VA introduced into the AAI Act, 1994—affected the arbitrability of such disputes. The Court reviewed the scope of arbitration agreements in the lease, past conduct of the parties, including prior arbitrations, and the nature of the contractual relationship.
Justice Somasekhar Sundaresan framed the central legal issue: : “This bunch of proceedings essentially centre around one core question – whether disputes and differences relating to eviction and recovery of dues under lease deeds governing two parcels of land, fall within the scope of the arbitration agreements contained in the lease deeds.”
The Court observed that although arbitration agreements were broadly worded, the context and legislative references excluded disputes regarding eviction and possession: “The arbitration agreements executed between AAI and Leela… do not cover within their ambit, the subject matter of eviction of unauthorised occupation by Leela of the leased land, and recovery of associated rent and damages.”
The Court held that reference to the Public Premises Eviction Act within the lease deeds “has the effect of affirming the parties’ consensual commitment by contract that eviction and related recoveries would fall outside the scope of arbitration.”
Further, the Court explained that: “The introduction of Chapter VA in the AAI Act is a new power granted by Parliament… to enable a public authority such as the AAI to recover its premises… 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.”
The Court also addressed whether non-execution of new lease deeds altered the outcome: “There was no requirement to amend the lease deeds to replace references to Public Premises Eviction Act with references to the AAI Act. Such a course of action was totally unnecessary…”
In addressing the expiry of leases and HLV’s occupation, the Court noted: “Both the leases… have expired. Prima facie, the continued occupation of the land is unauthorised and squarely brings the matter within the jurisdiction of Chapter VA of the AAI Act.”
On HLV’s argument that it was ready to hand over the 11,000 sq. metre land, the Court observed: “It should not have any issue with handing the same over. Any dispute or difference relating to implications of utilisation of FSI entitlements on such land and damages therefor, can indeed be subjected to arbitration.”
On parallel litigation, the Court observed: “The filing of the Suit by Leela seeking a declaration that the extension of lease for another 30 years has been granted, undermines Leela’s submissions about the dispute being arbitrable.”
Regarding prior arbitrations, the Court noted: “Past arbitrations… have nothing to do with eviction proceedings. In fact, the Delhi High Court… imposed costs on Leela… that position attained finality after approach to the Supreme Court.”
The conclusions and directions issued by the Court as follows:
(a) 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 by Leela of the leased land, and recovery of associated rent and damages.
(b) The parties had explicitly agreed to the position that the land leased to Leela would constitute public premises despite the construction of the building for conduct of business of the hotel and flight kitchen. Therefore, one need not look beyond the contract and into legislation to determine if eviction is excluded from the scope of arbitration.
(c) The reference to the Public Premises Eviction Act in each of the lease deeds leads to the identification of the class of disputes and differences for their exclusion from coverage by arbitration. The reference to the said legislation has the effect of affirming the parties’ consensual commitment by contract that eviction and related recoveries would fall outside the scope of arbitration. This is not a provision by which AAI is obliged not to avail of statutory powers to effect eviction of unauthorised users of the land.
(d) The introduction of Chapter VA in the AAI Act is a new power granted by Parliament after execution of the lease deeds, to enable a public authority such as the AAI to recover its premises being used by persons without authority. 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 arising in these proceedings.
(e) There was no requirement to amend the lease deeds to replace references to Public Premises Eviction Act with references to the AAI Act. Such a course of action was totally unnecessary since what is achieved by the provisions of the lease deeds is to exclude eviction and recovery from arbitration.
(f) Both the leases – for the 18,000 Land and the 11,000 Land – have expired. Prima facie, the continued occupation of the land is unauthorised and squarely brings the matter within the jurisdiction of Chapter VA of the AAI Act. This has no implication for the arbitration agreements, which in any case, provided for eviction of the land under the then applicable law, to be outside the scope of arbitration.
(g) Whether or not one could hold that the lease for the 18,000 Land was extended for another 30 years on the same terms without any revision and on the same terms and conditions, is a facet of the matter that can be eminently argued by Leela before the Eviction Officer when attempting to show cause in reply to Eviction Officer’s notice.
(h) The filing of the Suit by Leela seeking a declaration that the extension of lease for another 30 years has been granted, undermines Leela’s submissions about the dispute being arbitrable. On the contrary, it signals an attempt to litigate across forums, with the hope to continue the status quo and thereby prolong the enjoyment of the leased land at outdated lease rentals and that too beyond the expiry of the contracted lease periods.
(i) Past arbitrations in relation to the minimum guaranteed amounts payable under the lease for the 11,000 Land have nothing to do with eviction proceedings. In fact, the Delhi High Court has had occasion to stricture and impose costs on Leela when setting aside an arbitral award confirming that no amounts are payable by Leela in relation to the 11,000 Land – that position attained finality after approach to the Supreme Court.
(j) In any event, it is Leela’s case that it is ready and willing to hand over the 11,000 Land and therefore it should not have any issue with handing the same over. Any dispute or difference relating to implications of utilisation of FSI entitlements on such land and damages therefor, can indeed be subjected to arbitration.
(k) Eviction proceedings shall be conducted by the Eviction Officer in question with due dispatch and if necessary, on a day-to-day basis in accordance with law. Leela is directed to participate in the proceedings to enable completion of the same expeditiously.
(l) All disputes and differences other than those relating to eviction and recovery of lease rentals are amenable to arbitration. Considering that this component of the disputes are covered by the arbitration agreement in existence, no useful purpose would be served by keeping the Section 11 Applications pending and alive. In these circumstances, such components of disputes and differences (other than eviction and related dues) are hereby referred to arbitration by Justice (Retd.) Sanjay V. Gangapurwala, former Chief Justice of Madras High Court and this Court. The parties shall approach the Learned Arbitral Tribunal within a period of one week of the upload of this judgement on the website of this Court to take instructions on how to proceed further in the matter.
(m) Considering the nature of the contentions raised and the implications of long-term protection secured on an interim basis, and considering the quality of the contentions raised by the losing party, costs must follow the event. The costs imposed above shall be honoured by Leela within a period of four weeks from the upload of this judgement on the Court’s website.
The Court concluded: “With the aforesaid directions, both the captioned Appeals filed under Section 37 of the Arbitration Act read with Section 28-K of the AAI Act; and both the Section 11 Applications are hereby finally disposed of. Interim Applications, if any, in each of the Statutory Appeals and each of the Section 11 Applications shall also stand disposed of.”
The Court declined to stay the order but stated: “The Eviction Officer is requested not to fix the next date within the next four weeks.”
“All actions required to be taken pursuant to this order, shall be taken upon receipt of a downloaded copy as available on this Court’s website.”
Advocates Representing the Parties
For the Petitioners: Mr. Rafique Dada, Senior Advocate; Mr. Vivek Menon, Advocate; Mr. Ankoosh Mehta, Advocate; Ms. Sarah Navodia, Advocate; Mr. Advait Shukla, Advocate; Mr. Alok Agrawal, Advocate; instructed by Cyril Amarchand Mangaldas.
For the Respondents: Mr. Ashutosh Kumbhakoni, Senior Advocate; Mr. Ajay Khaire, Advocate; Ms. Tamanna Bafna, Advocate.
Case Title: HLV Limited vs. Airports Authority of India
Neutral Citation: 2025:BHC-OS:8425
Case Number: Arbitration Appeal (Stamp) No. 12153 of 2021 & Arbitration Appeal No. 83 of 2024
Bench: Justice Somasekhar Sundaresan
[Read/Download order]
