HLV Limited , formerly known as Hotel Leelaventure Limited, has successfully concluded a long-standing legal battle with PBSAMP Projects Pvt. Ltd., marking a significant victory for the hospitality company. The dispute, which originated from a land sale transaction in Hyderabad, has been resolved in HLV's favor by the Supreme Court of India.

Background of the Dispute

The conflict stemmed from a Memorandum of Understanding (MoU) signed in April 2014 between HLV Limited and PBSAMP Projects. The agreement involved the sale of 3 acres and 28 guntas of land in Hyderabad for a total consideration of Rs. 85.00 crores. PBSAMP had advanced Rs. 15.50 crores to HLV as part of the deal.

Challenges and Legal Proceedings

HLV faced difficulties in completing the transaction due to its inability to settle balance claims and obtain necessary government permissions under the Urban Land Ceiling Act. This led PBSAMP to terminate the agreement and demand a refund with a 21% annual interest.

The dispute escalated to arbitration, resulting in an award of Rs. 35.00 crores against HLV. In compliance with the arbitral award, HLV paid Rs. 44.42 crores. However, PBSAMP challenged the execution court's order through the Telangana High Court, seeking additional compensation.

Supreme Court Verdict

In a pivotal decision, the Supreme Court of India has set aside the Telangana High Court's order and confirmed the execution court's decision. This ruling effectively means that no further amount is payable by HLV Limited to PBSAMP Projects.

Implications for HLV Limited

This legal victory brings closure to a protracted dispute that had financial implications for HLV Limited. The resolution of this case removes a significant liability from the company's books and provides clarity on its financial obligations related to this transaction.

Company's Disclosure

In compliance with regulatory requirements, HLV Limited has made the necessary disclosures to the stock exchanges. The company informed that the Supreme Court's judgment and order were passed, bringing an end to this long-standing litigation.

The resolution of this dispute marks a positive development for HLV Limited, potentially improving its financial position and removing uncertainties associated with the ongoing legal battle. Shareholders and investors may view this as a favorable outcome, as it eliminates a substantial contingent liability for the company.

As HLV Limited moves forward, this legal victory may allow the management to focus more on its core hospitality business operations without the distraction of this significant legal dispute.

HLV Limited , formerly known as Hotel Leelaventure Limited, has released its unaudited financial results for the quarter ended June 30, 2022, revealing a net loss amidst ongoing legal challenges with the Airports Authority of India (AAI).

Financial Performance

The company reported a net loss of ₹671.00 lakhs for the quarter, showing a significant improvement from the previous quarter's loss of ₹2,553.00 lakhs. Total income from operations stood at ₹4,050.00 lakhs. While HLV Limited continues to operate at a loss, the reduced deficit indicates a potential trend towards recovery.

Legal Challenges with AAI

HLV Limited is currently embroiled in significant legal disputes with the Airports Authority of India regarding lease agreements for its Mumbai hotel operations. The contentious issues include:

• AAI has claimed ₹80,705.00 lakhs as rent and minimum guarantee fees.
• Additional demands include enhanced rentals of ₹760.00 lakhs for the quarter and ₹10,168.00 lakhs cumulatively.
• The company is actively contesting these demands through legal channels.

In response to the legal challenges, the Bombay High Court has issued interim orders preventing eviction proceedings, providing temporary relief to HLV Limited.

Going Concern and Future Outlook

Despite the ongoing legal disputes, HLV Limited has prepared its financial results on a going concern basis. This approach assumes favorable outcomes in the legal disputes and successful lease renewal negotiations with AAI.

The company noted improved operations compared to previous quarters, attributing the positive trend to:

1. Better COVID-19 conditions
2. Lifted travel restrictions

These factors have contributed to an uptick in the hospitality sector, potentially supporting HLV Limited's path to recovery.

Conclusion

While HLV Limited continues to face significant challenges, particularly in its legal battles with AAI, the company's reduced quarterly loss and improved operational environment provide a glimmer of hope. The outcome of the ongoing legal disputes and lease renewal negotiations will likely play a crucial role in determining the company's future trajectory in the competitive hospitality industry.