HC seeks Le Meridien reply on NDMC plea to set aside

The Delhi High Court today sought a response of CJ International Hotel Ltd, which runs Le Meridien Hotel in the city, on NDMC's plea to set aside a settlement decree between the two on the issue of licence fee dues owed to the civic body.
The issue was settled by way of a decree of April 21, 2015, after Le Meridien paid a one-time fee of approximately Rs 151 crore to New Delhi Municipal Council (NDMC).
Justice A K Pathak issued notice to the hotel and sought its response before the next date of hearing on December 3 on NDMC's plea claiming that the settlement with Le Meridien was unauthorized and caused a loss of nearly Rs 400 crore to the public exchequer.

NDMC in its application has blamed its lawyer for agreeing to a settlement without instructions.
However, advocate Manish Mohan, who had appeared for NDMC earlier, said he had agreed to the settlement on the basis of instructions given to him by the civic body.
"Compromise of the suit (with Le Meridien) is unauthorised and has in essence compromised the revenue interest of NDMC,... Causing a severe and grave loss to public funds and revenues. As such, it is imperative that the order of April 21 be set aside and the suit should be adjudicated on merits," the application filed through advocate Akshay Makhija says.

The application also states that NDMC's earlier counsel had only recorded his agreement to the effect that the hotel had deposited a sum of Rs 150,92,43,676 with the civic body and "did not specifically agree to anything else".
It also states that the earlier counsel should have pointed out to the court there was no decision to compromise the suit and the settlement decree ought not to be passed.
NDMC has also said in its application that it has issued a notice to its earlier counsel seeking his explanation and has withdrawn work from him as an interim measure.