In a major blow to the Tata Group, the Supreme Court on Thursday allowed the New Delhi Municipal Corporation (NDMC) to auction the capital's iconic Taj Mansingh Hotel.
In what is a poor consolation, the Bench allowed the group six months' time to vacate the premises in case they lose the e-auction. The civic body had, on March 3, told the SC that it wants to e-auction the hotel.
IHCL approached the Delhi High Court first in April 2013, seeking to restrain NDMC from auctioning Taj Mansingh Hotel after a committee declined to renew the licence in its favour for 30 years.
New Delhi's iconic Taj Mansingh hotel will go under the hammer, the Supreme Court ruled today, rejecting the Tata Group's plea to stall the auction. The announcement was made following a special meeting of the NDMC's top decision-making body. In October a year ago, the Delhi High Court had dismissed a plea by IHCL, which challenged an earlier verdict allowing the auction of the hotel. Appearing for the IHCL, senior counsel Harish Salve told the court that the proposed auction was not right as they have certain contractual rights for lease renewal. "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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"We respect the decision of the Supreme Court and intend to participate in the e-auction when it is held".
However, the Union Home Ministry opposed the civic body's move as it would have resulted in loss of revenue and said: "The proposal to allow IHCL to have the "first right of refusal" in the public auction has not been provided for in the lease deed".
IHCL had on November 8 past year approached the apex court against the Delhi High Court's order that cleared the decks for auctioning of the iconic property.
The original licence operated for a period of 33 years from late 1976 and concluded in 2011. NDMC vice-chairman Karan Singh Tanwar had explained its stance for auctioning the property stating that the council is not bound to give IHCL extension as per contract, and also there was no mention of a right of RoFR to IHCL anywhere in the contract.