SC allows NDMC to auction Taj Mansingh

Posted April 22, 2017

Delhi's iconic Taj Mansingh Hotel (Taj Mahal hotel) must be auctioned, ordered the supreme Court on Thursday.

Earlier, the civic body, which looks after areas pertaining to Lutyens' Delhi, also conducted the e-auction of Asian Hotel through MSTC, which resulted in more than 15 times increase in the licence fee, which used to be Rs 3 lakh per month earlier.

The Indian Hotels Company Ltd (IHCL) had on November 8 a year ago approached the Supreme Court against the Delhi High Courts order that had cleared the decks for auctioning of the iconic hotel in the heart of the national capital.

The decision was taken by the bench comprising of Justices P C Ghose and R F Nariman that was hearing a plea filed by NDMC which stated that Tata Group firm can not have the right to refusal in the auctioning of the hotel.

The Capital's iconic Taj Mansingh Hotel has been allowed to go under the hammer by the Supreme Court (SC). The announcement was made following a special meeting of the NDMC's top decision-making body. Following which, the Delhi high court dismissed the company's plea in October 2016 with the court allowing the civic body to auction the property.

In January 2017, the apex court directed the New Delhi Municipal Corporation (NDMC) to review its decision of auctioning the hotel. "The property will be auctioned again", said an official. "We must get renewal opportunity as our track record has been unblemished", he had said.

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The division bench of the high court had on October 27 a year ago dismissed the IHCL's plea challenging the move by NDMC to auction the property, saying the company has "no right" for renewal of the license period and NDMC was "within its power" to secure maximum consideration for grant of license for the property located at the prime location of 1, Man Singh Road in Lutyen's Delhi. Till now the Tatas had been seeking an order against the auction of the property.

Thursday's development comes after the NDMC, on March 2, unanimously chose to auction the rights of managing the hotel for a higher revenue share for the land which belongs to it.

The original licence operated for a period of 33 years from late 1976 and concluded in 2011.

At that time NDMC and IHCL entered into a pact, under which NDMC was to bear the construction cost of the hotel up to a sum of Rs 4.25 crore and IHCL was to bear the remaining cost.

Thereafter, several ad hoc extensions were granted to the Tata Group to keep running the hotel.