NDMC has two weeks to reply to Taj petition

The matter has been scheduled till next hearing on July 18

A day before the New Delhi Municipal Council (NDMC) is to meet to discuss the auction process for the Taj Mahal hotel, Mansingh Road, the Delhi High Court has asked the civic body to reply to the hotel company's petition within two weeks. Last week, Indian Hotels, which manages Taj Mansingh, had filed an injunction suit in the high court for a stay on the auction of the property “to protect its position”.

While the high court has not given a stay order, it has told the company that it is at liberty to approach the court if NDMC takes any coercive action against it. The next date of hearing has been set for July 18. In the absence of a stay order, NDMC will go ahead with its scheduled council meeting tomorrow and finalise the details of the Request For Proposal to begin the auction process.

IHCL said in a press statement, "The court will consider IHCL’s plea seeking an interim injunction on the next date of hearing. The court order has been applied for and is awaited. As the matter is now subjudice, we are not in a position to comment on this any further. We stand committed to the city of Delhi, all our guests, employees and partners and business continues as usual."

The 33-year lease for the iconic five-star hotel in Lutyens’ Delhi expired in October 2011, after which NDMC gave a one-year extension to the company.

Indian Hotels said it has a right to seek an extension of the lease because it “built a permanent structure” and invested in development of the area.

The civic body had asked the court to hear its plea and arguments before taking any decision on the stay order over the auction.

Indian Hotels, in its plea, cited its long relationship with NDMC to grant a stay on the auction process. It also said that the company shares its revenue with NDMC as rent every year for managing the property built on NDMC’s land.

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