Decision on Taj Mansingh lease extension today

Indian Hotel Co Ltd (IHCL), which runs Taj Mahal hotel on the capital’s Mansingh Road, is likely to get a temporary relief at the New Delhi Municipal Council (NDMC) meeting on Monday. The council, which is still awaiting the solicitor general’s opinion on granting the first right of refusal to IHCL for the auction of the Mansingh property, will consider the proposal of giving it a six-month lease extension till March 2014.

The lease for the property is ending on October 10.

NDMC is expecting international chains like Hyatt, Hilton, Starwood group and Accor group to place high bids for the prized asset in Lutyens’ Delhi. A senior NDMC official said the council did not want to hold the auction in a hurry so that sufficient time could be given to the interested bidders.

NDMC cannot hold any auction in the run-up to the Delhi Assembly elections, scheduled for December 4, due to conditions in the Election Commission’s code of conduct. The civic body is hopeful it would be able to start the auction process by end of the year, after the polls.

The council is prepared with bid documents for two possible scenarios (Taj being given the first right of refusal, or otherwise).

In April, IHCL had approached the Delhi High Court to secure a stay on the auction of its Mansingh property. The matter would be heard on November 7. The court had assured the company it could seek legal recourse if NDMC took any coercive action.

The company had signed a 33-year lease agreement for the property, which expired in October 2011. Subsequently, NDMC extended it by a year. While the company expected the lease to be renewed in October 2012, NDMC decided to hold an auction within a year.