New Delhi civic body clears court hurdle to Taj Mansingh auction

Home ministry yet to give any directions about giving Taj Mansingh the first right of refusal

The New Delhi Municipal Council (NDMC) will not face any hurdle from the high court here in auctioning the Taj Mahal Hotel (popularly called Taj Mansingh hotel) in the national capital. There is no stay order on the auction. However, the court, in its final interim order on the matter on Friday, reiterated the Taj group of hotels could take legal action if the NDMC tried to threaten or coerce it into “dispossession of the building.”

However, the NDMC cannot still proceed with the auction since the home ministry has not given any directions about giving the Taj Mansingh the first right of refusal. The next date of hearing is April 16. The court asked both parties to appear for “admission and denial of documents” filed on March 13.

The NDMC would not be able to start the auction once the code of conduct before the Lok Sabha elections kicks in. The hotel is, therefore, likely to get another extension for its lease, which expires in March.

The Indian Hotels Company Ltd (IHCL), which operates the Taj group, had approached the court to secure a stay on the auction of the property in April. It said it could not be treated as another licensee, to be replaced after the end of a term. Though the land belongs to the NDMC, IHCL has invested in the construction of the hotel’s building. The company, therefore, claims to have equity in the property.

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

Thereafter, in October 2013, the lease was extended for six months ending March 2014, on expectations the auction would have been wrapped by then.