Supreme Court Settlement in Hotel Property Dispute: Key Legal Insights

The Supreme Court of India recently resolved a long-standing property dispute between M/s. A.J. Shetty and Co. Pvt. Ltd. and St. Antony’s Charity Institutes through mediation, showcasing the judiciary’s preference for amicable settlements in complex civil matters. The case, presided over by Justice B.R. Gavai and Justice Augustine George Masih, involved a leased property in Mangaluru where the appellant had been running ‘Hotel Motimahal’ and later established the ‘Moti Mahal College of Hotel Management’. The dispute arose when the lease expired in 2011, and the charity institute refused renewal, leading to multiple lawsuits over possession rights and mesne profits.

The judgment reveals how the Supreme Court facilitated a settlement where the appellant agreed to vacate the property by April 2025 while receiving concessions on mesne profits. Notably, the Court invoked Article 142 of the Constitution to protect the interests of 250 hotel management students, allowing temporary relocation of the institute despite AICTE norms requiring 30-year lease agreements. Justice Gavai observed: “We find that this is a fit case wherein this court should exercise its extraordinary jurisdiction under Article 142 of the Constitution of India to meet the ends of justice. If we fail to exercise the said power, the career of about 250 students would be jeopardized.”

The settlement agreement, mediated by former Supreme Court judge Justice A.S. Bopanna, modified the mesne profits from Rs. 50,000/day to Rs. 23,000/day without interest, demonstrating judicial pragmatism. The Court’s directions to AICTE and Mangalore University to permit temporary operations for two years highlight its student-centric approach, balancing legal compliance with educational continuity. This judgment sets a precedent for handling property disputes involving educational institutions while emphasizing mediation as an effective dispute resolution mechanism.

Read also: https://judgmentlibrary.com/supreme-court-condoned-delay-in-land-acquisition-compensation-appeals-key-ruling/

Petitioner Name: M/S. A.J. SHETTY AND CO. PVT. LTD..
Respondent Name: ST. ANTONY’S CHARITY INSTITUTES AND OTHERS.
Judgment By: Justice B.R. Gavai, Justice Augustine George Masih.
Place Of Incident: Mangaluru, Karnataka.
Judgment Date: 23-04-2025.
Result: settled.

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