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Examine delay in auction of Taj Mansingh hotel: CVC to NDMC

Press Trust of India  |  New Delhi 

Central Vigilance Commission (CVC) has asked New Delhi Municipal Council to examine the delay in auction of Taj Mansingh hotel and submit a report within three months.

Officials said CVC has directed Chief Vigilance Officers of NDMC to examine the matter and submit a report following a complaint by a Delhi High Court lawyer Subodh Jain, who questioned the civic body's delay in auctioning the five star hotel in posh Lutyens Bungalow Zone.

"The CVC has forwarded the lawyer's complaint to NDMC and asked us to prepare a report. The CVOs will prepare and submit the report in the stipulated time," said an NDMC official.

Tata's Indian Hotels Company Ltd (IHCL) had entered into a 33-year lease agreement with NDMC for using the Taj Mansingh Hotel property in 1978, which ended in October 2011. The lease has been extended twice since then.

"NDMC has been delaying the process of auctioning the property since two years. It does not have an intention of auctioning the property as there is a nexus between the Tatas and the civic body," said Jain.

NDMC had received a show cause notice last month from the Home Ministry which asked the civic agency why there has been a "delay" in auction of the hotel.

In September last year, the municipal body had decided to give one-year extension to the Tatas, besides giving the first right of refusal in an auction to be conducted within one year.

Sources said the Home Ministry was concerned that the "provision of the first right of refusal will result in a lower bid in the public auction".

Following this, IHCL had approached the High Court in April to get a stay on the auction of its property.

The Delhi High Court had asked Tatas to approach the court if any coercive steps are taken against it by the NDMC.

Though the land belongs to NDMC, IHCL has invested in the construction of the hotel's building.

First Published: Mon, August 19 2013. 21:12 IST