HLV Limited , the luxury hospitality company operating The Leela Mumbai, has reported a net loss of Rs 347.00 lakhs for the first quarter, a significant downturn from the profit of Rs 162.00 lakhs recorded in the same quarter last year. The company's financial results, approved by the Board of Directors on August 9, reveal a challenging start to the fiscal year.

Financial Performance

The company's total income for Q1 declined by 8.6% to Rs 4,397.00 lakhs, compared to Rs 4,813.00 lakhs in the corresponding quarter of the previous year. This decrease in revenue has contributed to the company's shift from profit to loss.

Key financial highlights for Q1 include:

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a sharp decline of 73%, dropping to Rs 151.51 lakhs from Rs 566.00 lakhs in the previous year's quarter.

Ongoing Legal Challenges

HLV Limited continues to face significant legal challenges, particularly in its dealings with the Airports Authority of India (AAI). The company is embroiled in disputes regarding lease rentals and eviction proceedings for its Mumbai property.

Key points regarding the legal situation include:

1. AAI has arbitrarily increased the lease rent for 18,000 sq. meters of land for the Mumbai hotel, effective from October 1, 2014. The disputed amount not provided in the books for Q1 is Rs 543.00 lakhs, with a cumulative disputed amount of Rs 15,923.00 lakhs up to June 30.

2. The company faces a contingent liability of Rs 80,705.00 lakhs claimed by AAI for another land parcel of 11,000 sq. meters in Mumbai.

3. Eviction proceedings have been initiated by AAI, and arbitration proceedings are ongoing as per court orders.

4. HLV Limited has received an offer from AAI to renew the lease for 18,000 sq. meters of land, subject to certain terms and conditions. The company has made representations regarding this offer and is awaiting AAI's response.

Going Concern and Future Outlook

Despite these challenges, HLV Limited's management continues to prepare financial results on a going concern basis. The company is confident of obtaining favorable judgments, orders, or settlements in its disputes with AAI, including the renewal of its lease.

The Board of Directors, in their meeting on August 9, approved these unaudited financial results after review by the Audit Committee. As the hospitality sector navigates through various challenges, HLV Limited's performance in the coming quarters will be closely watched by investors and industry observers alike.

HLV Limited , formerly known as Hotel Leelaventure Limited, faces ongoing legal challenges with the Airports Authority of India (AAI) as the Supreme Court recently disposed of the company's Special Leave Petitions. The petitions were filed to challenge a Bombay High Court judgment regarding lease termination and rent disputes.

Supreme Court's Decision

The Supreme Court allowed proceedings to continue before the adjudicating authority under the AAI Act. In its order, the court made several key observations:

• The Adjudicating Authority under the AAI Act is yet to hear both parties.
• Both HLV Limited and AAI are permitted to present their submissions before the authority.
• Any adverse order passed by the authority under the AAI Act will be appealable.
• The court found no reason to interfere with the Bombay High Court's judgment at this stage.

Ongoing Dispute Details

The dispute between HLV Limited and AAI involves several significant issues:

1. Lease Termination: AAI terminated two leases via a letter dated September 27, 2016, demanding HLV Limited surrender possession of the land.

2. Eviction Proceedings: AAI initiated eviction proceedings against HLV Limited, seeking to recover arrears amounting to Rs. 39.80 crores as of January 31, 2017.

3. Rent Increase: AAI has increased the lease rent for HLV's Mumbai hotel, effective from October 1, 2014. The increased rentals amount to:

   • Rs. 470.00 lakhs for the quarter ended June 30, 2023
   • Rs. 11,950.00 lakhs for the period up to June 30, 2023

Legal Proceedings Timeline

• June 9: Bombay High Court delivered a judgment stating that the Eviction Officer shall continue eviction proceedings, while an Arbitrator would decide on other commercial aspects.
• Post June 9: HLV Limited challenged the Bombay High Court's judgment by filing Special Leave Petitions in the Supreme Court.
• July 21: The Supreme Court disposed of HLV Limited's Special Leave Petitions, allowing the proceedings to continue before the adjudicating authority under the AAI Act.

Implications for HLV Limited

The ongoing litigation poses significant financial and operational challenges for HLV Limited. The company faces potential eviction from its Mumbai hotel property and substantial financial liabilities related to lease arrears and increased rentals. The resolution of this dispute will likely have a material impact on the company's operations and financial position.

As the legal battle continues, both HLV Limited and AAI will have the opportunity to present their cases before the adjudicating authority. The outcome of these proceedings will be crucial for determining the future of HLV Limited's Mumbai hotel operations and its financial obligations to AAI.

Investors and stakeholders of HLV Limited should closely monitor further developments in this ongoing legal dispute, as it may significantly affect the company's future prospects and valuation.