NDMC files caveat over Taj auction stay

 

The New Delhi Municipal Council (NDMC) has filed a caveat in the high court here against Indian Hotels Company’s injunction suit. NDMC has asked the court to hear its plea and arguments before taking a decision on a stay on the auction of the Taj Mahal hotel, Mansingh Road, a senior NDMC official told Business Standard.

Ahead of NDMC’s meeting on April 10 to decide on the request for proposal for auctioning the property, last week, Indian Hotels Company, which manages the Taj hotel, moved the court seeking a stay on the auction.

The company had signed a 33-year lease agreement for the iconic property in Lutyens’ Delhi; the lease expired in October 2011. Subsequently, Taj Mahal hotel was given a year’s extension. While the company expected the lease to be renewed in October 2012, NDMC firmed up its plan to auction the property within a year.

Though the land belongs to NDMC, Indian Hotels has invested in constructing the hotel building. As the company claims it holds equity share in the property, it has objected to being treated as a mere licensee that can be replaced at the end of a term. “They have made some parts of the building. We had an arrangement. We paid some money for the property. Besides, the land is also ours,” the senior NDMC official said.

NDMC is yet to receive any official communication from the court to respond to Taj’s petition. It plans to go ahead with its council meeting on April 10 to finalise the auction process.

For NDMC, which owns the land on which prime hotels in the capital (such as the Le Meridien and the Lalit) are built, such litigation is not a first. Earlier, the civic body had sought to re-enter another property in central Delhi---Asian Hotels---after its lease expired in 2008. However, after receiving an eviction notice, the tenant had managed to get a stay order from the high court here. NDMC is fighting a legal battle with Asian Hotels for not evacuating the property and defaulting on a payment of Rs 25 crore.