Taj Mansingh lease gets extended for 6 months

SG's view to have bearing on the Taj group's right of first refusal

The New Delhi Municipal Council (NDMC) on Monday granted a six-month lease extension to Indian Hotels Company, which runs the Taj Mahal Hotel, popularly known as Taj Mansingh. However, the auction of the property now hinges on the Solicitor-General’s opinion on the right of first refusal (ROFR).

The auction process will kick off after the home ministry gives the instructions and forwards SG’s opinion to NDMC, it is learnt. The council had sought the top law officer’s view on whether or not to grant the Taj Group ROFR in the auction process.

The lease for the property is due to end on October 10. NDMC is hopeful of getting the SG’s opinion through the home ministry by November-end. The council expects to start the auction process after the formation of the state legislative assembly by December 15. However, if the auction spills over till March 2014 due to external factors, the general elections may again deter NDMC from holding the auction, sources pointed out.

The civic body had said it could not hold an auction during the Delhi Assembly polls due to certain clauses in the Election Commission’s code of conduct. The council has prepared the documents of request for proposal for both scenarios: whether the Taj Group gets ROFR or not.

The NDMC-Taj Group tussle over the lease extension is expected to culminate in the high court hearing of November 7. In April, Indian Hotels Company had approached the Delhi High Court to secure a stay on the auction of its Mansingh property. 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 pact 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 in a year.