Cochin Port Trust will seek legal opinion on LuLu group’s demand for repayment of Rs 71 crore paid as upfront premium for land leased from the trust.
The LuLu group, in its letter to the port trust chairman, stated it was withdrawing from the deal in which 26 acres were taken on a 30-year lease on Bolghatty island. The letter demanded that the port trust pay back the Rs. 71 crore paid as onetime upfront lease money and that the company was ready to forgo the interest on the money.
The letter by the managing director of the LuLu group M.A. Yusuff Ali does not state the reason why it wants to exit from the deal.
A senior official of the Cochin Port Trust told The Hindu that a development like the demand by LuLu group to unilaterally withdraw from deal and demand repayment of the lease money had no precedent. A legal opinion was the only way ahead, the official said.
Though the business group has demanded its money back, the lease deed clearly states that the amount is not refundable.
A member of the Board of Trustees of the port said the issue was likely to come up on the agenda of the routine board meeting on Wednesday. It was not yet on the agenda but might be placed on the table considering the latest developments, the board member said.
He termed LuLu group’s decision to withdraw unilaterally from the land deal as an emotional reaction, which was not expected from a business group. If the group wants to withdraw unilaterally, it will have to bear the liability unless it secures a court directive to the contrary, the board member said on the demand that the lease money should be paid back.
The 2010 land deal ran into trouble after plans by the LuLu group to build 572 serviced apartments on land meant specifically for port-related activities were exposed by The Hindu. The port trust leased the land for the group to build a convention centre and associated facilities.