Relief to Tatas as court rejects NDMC petition to restrain hotel from making bookings after March 31.
New Delhi: In a huge relief to the Tatas, the Supreme Court on Monday ordered status quo on the proposed auction of Taj Mahal Hotel on Mansingh Road in the national capital and rejected the plea of New Delhi Municipal Council to restrain the hotel from making any bookings after March 31.
Giving this relief, a bench of Justices Pinaki Chandra Ghose and Uday Lalit, after hearing senior counsel Harish Salve for Tatas and the NDMC counsel, said, “We can’t stop running a hotel. We will decide everything when we decide the case in January next.”
When the case came up for hearing on Monday, Mr Salve argued that the Indian hotels should be offered the right of first refusal on a price discovery or otherwise. ASG Sanjay Jain argued that the agreement makes it clear that the appellants only have a right to seek renewal and that it is up to the NDMC to renew it or not. The bench, while ordering status quo, issued a notice seeking the NDMC response to the appeal filed by the hotel against the Delhi HC order approving the proposed auction and asking the NDMC to go ahead with it.
The Delhi high court had dismissed the plea of Indian Hotels Company (IHCL), Tata Group’s hospitality arm, which has been running the five-star 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. The HC had held that the NDMC was “within its power” to secure maximum consideration for grant of licence for the property in Lutyens’ Delhi and the IHCL had no right under the licence for a renewal thereof.
The property, owned by the 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. The municipal body had entered into an agreement with the IHCL — a subsidiary of Tata Sons — in December 1976, to construct and run the 11-storey hotel.