SC allows NDMC to e-auction Taj Hotel after licence expiry
The Supreme Court on Thursday permitted the New Delhi Municipal Council (NDMC) to e-auction the Taj Hotel on Mansingh Road in the capital following the expiry of the licence granted to the Tata Group to run the hotel.
A bench of Justices PC Ghose and Rohinton Nariman also accepted the NDMC’s plea that Tata Group cannot have the right of refusal in auctioning of the hotel. The bench, however, asked NDMC to grant six months “breathing time” to the company for vacating the hotel in case they lose out in the e-auction.
The court also said that the “blemish-free” record of Indian Hotels Company (IHCL), Tata Group’s hospitality arm, might be taken into account by NDMC while auctioning the property. On March 3, the NDMC had informed the bench that it wanted to e-auction the hotel. The court had earlier asked the IHCL, which challenged a Delhi High Court order allowing auction of the hotel, to file objections, if any, within a week.
The IHCL had told the apex court that it was "not clear" why NDMC wanted to auction the prime property, which gave the "best revenue" to it. The company had submitted that NDMC expert report suggests that the council would "lose revenue" if the hotel was auctioned to other players.
The Delhi HC had dismissed IHCL’s plea, which has been running the hotel at Mansingh Road for 33 years. IHCL has sought renewal of licence on grounds of the equity investment it had made in the property. HC had held that NDMC was “within its power” to secure maximum consideration for grant of licence for the propertyand the IHCL had no right under the licence for a renewal thereof.
The property, owned by NDMC, was given to IHCL on a lease for 33 years, which ended in 2011. The IHCL has been managing the property since then through several extensions.