Pressure builds on NDMC to auction Taj Mansigh

Govt asks NDMC to explain delay in auctioning off the property

New Delhi Municipal Council is likely to soon convene a meeting to decide its course of action in the matter of Taj Mansingh hotel’s auction, after it received a notice from the union home ministry. The government has asked NDMC to explain the reason behind a delay of two years in the auction of the property. The lease for the property expires in October.

Home ministry was concerned that the “provision of the first right of refusal will result in a lower bid in the public auction.”

The ministry had also pulled up the municipal body for referring the matter to the Solicitor General.

While NDMC is still awaiting the opinion of the Solicitor General on whether to take away the first right of refusal from the Taj group as suggested by the home ministry, the matter is still pending in the High Court.

Indian Hotels Company which operates the Taj group hotels, had approached the High Court in April to get a stay on the auction of its Mansingh property. The court will hear the matter only on November 7 now.

Although the company has not secured a stay order from the court, it did get an assurance that if NDMC coerced it from vacating the premises, the company could take legal recourse.

The company had signed a 33-year lease agreement for the property in Lutyens' Delhi; the agreement had expired in October 2011. Subsequently, Taj Mahal hotel was given a year's extension. While the company expected the lease to be renewed in October 2012, NDMC decided to go ahead with an auction within a year.

Though the land belongs to NDMC, Indian Hotels Company has invested in the construction of the hotel's building. Therefore, the company claims to have equity in the property and has objected to being treated as just another licensee that can be replaced at the end of a term.