Supreme Court allows NDMC to E- auction Taj Mansingh Hotel

Robyn Valdez
April 22, 2017

The Supreme Court on Thursday allowed the New Delhi Municipal Council to go ahead with the e-auction of the property housing the iconic Taj Mansingh Hotel here, now run by Tata Group's Indian Hotels Company Ltd. (IHCL).

A month later, in November 2016, the IHCL moved the Supreme Court saying there was no need to auction the hotel as it was generating good revenue for the civic body.

According to the reports, after it was decided by the NDMC that it will E-auction the Taj Mansingh hotel, IHCL approached the Delhi high court.

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A bench comprising Justices P C Ghose and R F Nariman allowed the plea of New Delhi Municipal Council (NDMC) that the Tata Group firm can not have the right to refusal in the auctioning of the hotel. It asked NDMC to review its decision as opinions of the top two legal officers of the country - Attorney General and Solicitor General - were not considered while decision to E-auction the property was taken in the meeting in presence of Delhi chief minister Arvind Kejriwal.

The court had earlier asked IHCL, which challenged a Delhi high court order allowing the hotel's auction, to file objections, if any, within a week.

The IHCL in its response had said that it was not clear why NDMC wanted to auction the property when it was giving them the maximum revenue. "Smaller players like us will be subdued, as we wouldn't look at it as a trophy acquisition", said Patu Keswani, chairman of Lemon Tree Hotels.

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On March 3, the NMDC had informed the bench that it wanted to e-auction the hotel. The official further said that IHCL will participate in the auction as and when it is scheduled.

The Tata Group had been given a 33-year-lease for the property and the contract ended in 2011. The Group's hotel division was given nine extensions after that. Instead of renewing the lease, the civic body made a decision to opt for a public auction as it would maximise the annual licence fee.

The Taj Mahal Hotel is a 5-star luxury hotel in Delhi.

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The high court bench had upheld an earlier September ruling by a single judge bench dismissing Indian Hotels' plea for renewal of its licence to run the hotel.

Other reports by Info About Network

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