Bitter fight over food court at Mumbai’s swankiest office tower

October 21, 2022

The Bombay High Court (HC) has refused to entertain a plea from entities owned by the Blackstone Group with regard to a dispute involving the use of a mega food court at One Indiabulls Center in Mumbai where the swankiest office spaces are available on a long lease.

The HC has asked it to approach the Court of Small Causes. In early 2020, the Blackstone Group completed the part acquisition of two of Mumbai’s largest commercial towers from Indiabulls Properties in Parel, which was part of a larger ₹2,700 crore deal with Indiabulls Group.

One Indiabulls Center has office space of more than 5 lakh sq ft and the disputed food court is housed in the premises measuring 16,256 sq ft.

Lawyers’ take

The lawyers for the entities controlled by Blackstone argued that Kailasa Urja (Symphony Kitchen), the company running the food court, had Leave and Licence Agreement that expired by efflux of time on July 31, 2021, which is almost a year back and the respondent cannot continue to occupy the licensed premises.

Kailasa Urja has claimed that it has suffered a loss of ₹16.64 crore. Their lawyers argued that when they were given possession of the food court, the premises were in bare shell condition without even basic infrastructure.

Hence, Kailasa Urja developed everything needed to set up and operate a food court at its own cost. At the time, the tower’s occupancy was also low, so the company operated the food court at a substantial loss.

Kailasa Urja said it was understood between the parties that the agreement would be executed for at least 10 years. Now, since Blackstone Group entities have come into play, they have asked Kailasa Urja to vacate.

Further, it was also stated by Kailasa Urja in the court documents that Aditya Birla had encroached on the respondents (food court) area of about 2,000 sq ft as licenced in favour of the respondent which was revealed to the respondent by the Aditya Birla Group by providing a copy of the agreement.

PSCC Act, 1882

Also, Kailasa Urja raised a preliminary objection to the maintainability of the petition on the ground that the disputes are not arbitrable as necessarily by statutory implication arbitration would be barred in view of the provisions of Section 41 of the Presidency Small Cause Courts Act, 1882 (PSCC).

The HC told the petitioner (Blackstone Group entities) that the real dispute between the parties is in relation to the possession of the licensed premises being claimed by the petitioner and asked it to approach the Court of Small Causes.

In the view of HC, the exclusive jurisdiction of the Court of Small Causes under Section 41 of the PSCC Act would remain sacrosanct and stand unaffected even if the parties agree to an arbitration agreement in the Leave and Licence Agreement.

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