NDMC climbdown on Taj Mansingh auction ahead of court order

NDMC will now conduct special meeting soon to discuss all options

The New Delhi Municipal Council, which had earlier decided to auction the Taj Mahal hotel (popularly known as Taj Mansingh) in the capital, managed by The Indian Hotels Co Ltd, will soon convene a meeting to discuss the issue again.

The meeting, the date of which has not been fixed, will discuss all options, including a lease renewal of the property without an auction, council officials said.   

"NDMC is doing a turnround. After talking of open bid, it is now deliberately delaying the process," said Karan Singh Tanwar, standing committee member, NDMC.

The civic body had earlier said it would finalise the terms of the request for proposal today since the high court had not given a stay order for the auction. But in its council meeting held at the NDMC office today, it was decided that till a formal order of the court was procured in the matter, no step could be taken on the auction.

The council has also taken note of a decision by another civic body,  Delhi Development Authority, to renew the lease of Taj Palace Hotel, also run by The Indian Hotels, on March 28. According to people in the know, NDMC could follow the DDA formula for lease renewal.

DDA had extended the lease for Taj Palace for 25 years from April 1. NDMC chairperson Archana Arora, however, denied any such possibility, “The DDA agreement is very different from ours. We cannot compare the two,” she said.

The high court has given two weeks to NDMC to respond to an injunction suit filed by The Indian Hotels to stay the auction of Taj Mansingh. While the court has not given a stay order, it has given liberty to The Indian Hotels to approach the court if NDMC took any coercive action against it. The next hearing is scheduled for July 18.

The 33-year lease for the iconic five-star hotel in Lutyens’ Delhi expired in October 2011, after which NDMC gave one year extension to the company. The Indian Hotels said it had the right to seek an extension of the lease because it "built a permanent structure" and invested in development of the area.

The Indian Hotels, in its plea, has cited its long relationship with NDMC, to seek a stay on the auction process. It has also said that the company shares its revenue with NDMC as rent every year for managing the property built on NDMC’s land. TIMELINE

• October 2011: 33-year lease for Taj Mansingh expires, NDMC grants one-year extension
• October 2012: NDMC decides to auction the property; one more year’s extension granted to IHCL
• April 4, 2013: IHCL files injuction suit in Delhi High Court to stay the auction
• April 9, 2013: HC gives two weeks to NDMC to respond
• July 18, 2013: Next court hearing