In a significant legal victory, the Bombay High Court has removed barriers to the long-awaited construction of a new hotel on CBD-Belapur Road, Navi Mumbai, marking an end to a 20-year standoff. The project, initially launched by the City and Industrial Development Corporation of Maharashtra Ltd. (CIDCO) in 2006, encountered multiple delays primarily due to the absence of the proposed Navi Mumbai International Airport.
The case was brought before a division bench consisting of Justice Ajey Gadkari and Justice Shyam Chandak, who were tasked with resolving a dispute between CIDCO and PVP Star Hotels Private Limited. The Mumbai-based hotelier challenged a CIDCO show-cause notice that demanded an additional lease premium, deeming the request unjust since it diverged from the treatment of other licensees under similar circumstances.
Details from the court reveal that CIDCO had advertised the plot in December 2006, touting Navi Mumbai as a burgeoning “city of the future,” expected to flourish alongside several proposed infrastructural projects including the international airport and enhanced water transport facilities. PVP Star Hotels was awarded the plot after a substantial initial lease premium of ₹82 crore was paid. The terms stipulated commencement of construction within a year and completion within five years.
However, the anticipated international airport failed to materialize, stunting the area’s development and reducing demand for hotel accommodations. This led PVP Star Hotels to seek multiple extensions, attempting to forestall the project without incurring further financial strain. Despite these efforts, CIDCO canceled the lease agreement in April 2018, repossessed the plot, and issued a demand for an additional ₹12 crore in lease premium.
In its defense, PVP Star Hotels argued that the differential treatment compared to other licensees who received extensions without financial penalties was discriminatory and punitive. The court acknowledged the complexities involved, noting that although the lease was terminated, expecting the hotelier to bear additional financial burdens under these circumstances was unreasonable.
