Taj Mansingh may get 6th lease extension

Indian Hotels Company Limited (IHCL) is likely to get yet another extension, the sixth one, to continue operations of the Taj Mahal Hotel in New Delhi. Colloquially referred to by the road on which the hotel is located, Taj Mansingh's current lease expires on January 31, 2015. The fifth lease extension, of six months, was granted to IHCL by New Delhi Municipal Council (NDMC) after the previous one expired on July 31, 2014.

IHCL's case over the property is coming up for hearing on February 23, 2015 in the Delhi High Court. IHCL had earlier filed an injunction in the Delhi HC to get a stay on the proposed auction, claiming equity in the hotel property's construction.

While the land and property belong to NDMC, IHCL has signed a 33-year lease agreement for managing the property. That lease expired in October 2011, after which auctioning of the property was due. However, there have been five lease extensions since 2011.

While the lease is valid till January 31, model code of conduct would kick in ahead of the Delhi Assembly election expected anytime between January-end and the first week of February. That could result in yet another lease extension for Taj Mansingh as NDMC would not be allowed to make any announcements during the model code of conduct.

"We haven't received any instructions from the home ministry till now," said a senior NDMC official. The NDMC has not been able to get clarity on whether to give the Taj group the right of first refusal, or ROFR, after the ministry raised objections to this. Home ministry's instructions are expected to be based on the legal advice it gets from the Solicitor General.

In 2013, the home ministry, NDMC's parent organisation, had asked for an explanation for the delay in auctioning the land where Taj Mansingh is located and slapped a showcause notice. Following this, NDMC sought home ministry's permission and approached the Solicitor General for legal advice about how to proceed in the Taj Mansingh issue.