HSVP seals Kingdom of Dreams for non-payment of dues

The Haryana Shahari Vikas Pradhikaran (HSVP) sealed the Kingdom of Dreams (KoD)---the city’s cultural hotspot in Sector 29--- on Friday for non-payment of dues to the tune of over ₹100 crore

The Haryana Shahari Vikas Pradhikaran (HSVP) sealed the Kingdom of Dreams (KoD)---the city’s cultural hotspot in Sector 29--- on Friday for non-payment of dues to the tune of over ₹100 crore.

Gurugram, India - July 15, 2022: A view of the Kingdom of Dreams entrance gate, sealed by bank officials, in Gurugram, India, on Friday, July 15, 2022. (HT Photo) **To go with Leena Dhankar’s story** (Hindustan Times)

Soon after, the management of KoD approached court to obtain a stay order against the HSVP order issued on July 6 asking for the termination of the lease agreement.

HSVP officials in the know of the matter said that Kingdom of Dreams, operated by Great Indian Nautanki Company, owed ₹42 crore in 2016 as lease to the Haryana Urban Development Authority (Huda), now known as HSVP, but the amount kept compounding due to non-payment of dues.

The monthly rent was set at ₹36 lakh when the lease agreement was executed on February 15, 2008.

Spread over almost six acres, the complex receives around 700,000 visitors annually but was severely hit after the Covid-19 pandemic which broke out in 2020.

The HSVP had filed a case against Kingdom of Dreams on November 10, 2014, under Section 138 of the Negotiable Instruments Act and sections of the IPC after a ₹3.92 crore cheque submitted by the KoD management bounced.

The ₹350-crore entertainment project has been facing cash flow issues and a paucity of funds for further expansion since 2014.

Officials said KoD has been issued several notices for non-payment of dues and the authority was on the verge of closing it before a proposal came from the KoD management seeking help from the state government.

In 2016, a three-member committee comprising the Haryana State Industrial and Infrastructure Development Corporation managing director and two additional state chief secretaries was formed to assess the viability of the entertainment hub but nothing fruitful came out, said HSVP officials.

After several rounds of meetings, the state government wanted to ensure the cultural hub is kept afloat, but there were no takers and the Huda too was unlikely to take over the complex as the government felt it lacked the skills to run such a huge venture.

Finally, on July 6 this year, the HSVP sent a notice to KoD for termination of lease agreement, a copy of which HT has seen.

“Whereas auditorium site measuring 5.66 acres...was leased out to you for a period of 15 years for operation, maintenance and management along with construction, providing necessary facilities and making operational on ‘as in where is basis’,” stated the notice issued on July 6.

“As per the terms and condition of lease agreement , you were required to pay the lease rent on monthly basis, however, you have failed to do so. Now a sum of ₹107.15 crore is outstanding against you as on 10.06.2022. Therefore, show cause notice was issued...dated 10.06.22. Through this notice you were directed to deposit the outstanding rent or to submit reply of the show cause notice within 15 days , but neither the rent has been deposited nor any reply of the notice has been submitted which shows clear violation of terms and conditions of the lease agreement. Hence, the lease agreement executed on 15.02.2008 is hereby terminated with immediate effect,” said the order.

Sanjeev Singla, estate officer -II of HSVP, said, “We had issued many notices for non-payment of dues...They (KoD) defaulted on the payment and accordingly, action has been taken. The HSVP terminated the lease and sealed the premises.”

A senior management official from KoD said, “The sealing was done without any prior notice. No one from the management was aware of it. The HSVP issued a termination of lease letter on July 6 but sealing was not part of it. The lessee and lessor should have gone to the court to settle the account... how can they seal it? Anyone gets 30 days’ notice after the termination of the lease but in our case, it was sealed within a week. We have our assets over ₹100 crore inside, who will take its responsibility?”