NDMC meeting this week on Taj auction

The New Delhi Municipal Council (NDMC) is set to discuss the proposed auction of the Taj Mahal hotel, Mansingh Road, at its next meeting on Thursday.

It had earlier decided to convene a meeting to discuss this issue after Indian Hotels Company (IHCL), which operates the hotel, filed an injunction suit in the high court here against the impending auction. IHC's two-year lease extension ends in October. NDMC has to give its reply to IHC's plea in the court by July 18.

The civic body is yet to decide whether it plans to go ahead with the finalisation of the auction details or stop all action till the matter remains in court. Senior officials said the first right of refusal would be given to IHC, which was enough to protect its interest in the property. IHC, in its plea, has claimed to have equity in the property and, so, cannot be treated as any other lessee.

It has cited its long relationship with NDMC for grant of a stay in the auction process.

It has said the company shares its revenue with NDMC as rent every year for managing the property, built on the civic body's land. Indian Hotels said it had a right to seek an extension of the lease because it "built a permanent structure" and invested in development of the area.

The 33-year lease agreement ended in October 2011, after which NDMC decided on an auction instead of renewing the lease. Thereafter, the civic body had given a lease extension to the company.

The Taj group pays NDMC 10.5 per cent of its gross revenue annually as rent and it is expected the proposed auction could result in a substantial increase in the figure. NDMC had appointed Ernst & Young as consultant to advise on the course of action on the lease.