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Tata loses Taj as SC orders hotel’s auction

| | New Delhi

The Supreme Court on Thursday cleared the decks for the auction of the Taj Mansingh Hotel located in the heart of the Capital, thus ending the hold of the Tatas over one of the most iconic buildings in Lutyens’ Delhi.

Ending the legal battle over Taj, the apex court allowed the request of the New Delhi Municipal Council (NDMC), the land-owning agency, to go for an e-auction of the hotel in which the existing leaseholder, Indian Hotels Company Limited (IHCL), a Tata subsidiary, can bid.

The court refused to entertain its request to be granted the right of first refusal. Now, the  NDMC has a free hand to go for an open public auction and award the highest bidder the right to run the hotel.

However, considering the “blemish-free” record held by Tata in running the hotel since 1976, the Bench of Justices Pinaki Chandra Ghose and Rohington F Nariman

said in the event IHCL loses the bid, it will have a “six-month” breathing period to vacate the premises.

The five-star hotel run by the IHCL was defended by senior advocate Harish Salve. He pointed out that the NDMC had invested just about Rs6 crore while his clients had pumped in close to Rs129 crore with a paid licence fee of over Rs400 crore.

But the civic body, represented by senior advocate Sanjay Jain, contended that the NDMC was well within its right to take this decision in the best interest of running the hotel.  Jain later told reporters that the e-auction will take place in two weeks.

The Tatas had entered into a 33-year lease to construct and run the Taj Mansingh Hotel as per an agreement signed between the NDMC and IHCL on December 18, 1976. The lease came to an end in the year 2011. Since then it got several extensions.

The IHC initially challenged the  NDMC move to go for an auction in the  Delhi High Court, but it failed o get any relief. In its suit, the Tatas sought a decree of permanent injunction to restrain the NDMC from interfering in any manner with the possession, right to operate, run and maintain the hotel property.

Following the HC order, IHCL approached the apex court, which ordered status quo in November 2016.

While Tatas claimed there was no need to go for an auction when the company was willing to give the best revenue possible for the prime property, the Court felt that the civic body had all the right to proceed with the auction.

 
 
 

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