After many lease extensions, will Taj Mansingh now get auctioned?

A timeline of the flip-flops in the five-star property's lease extensions and call for auction

A two-judge Bench of the Delhi High Court on October 27 dismissed Tata-owned Indian Hotel Company Ltd’s (IHCL’s) plea for renewal of its licence for Taj Mahal Hotel in central Delhi (also known as Taj Mansingh Hotel). The judgment upheld the decision of the New Delhi Municipal Corporation (NDMC), the owner of the hotel land and building, to auction the property.

The issues is related to a 1976 collaboration agreement between Indian Hotels and NDMC for the development and operation of the five-star property. Though the initial agreement expired in 2011, the Taj group was given extensions.

According to a Livemint report, quoting sources, NDMC had received Rs 293.3 crore from the hotel property from 1978, the year when IHCL was given the licence, to 2013. This was on an investment of Rs 6.26 crore. So far, the municipal corporation has given nine temporary extensions to the company to manage the hotel.

Here, Business Standard takes a look at how the story has unfolded so far:

1978: IHCL is given a 33-year licence for the Hotel

2011:

* The licence gets over and the company asks for its renewal. NDMC extends the licence for a year

* Indian Hotels Company also reaches a pact with an NDMC committee to consider its request for a 30-year extension of the licence, under which it is agreed that the annual licence fee will be increased to 17.25%, 18.25% and 19.25% of sales, with a minimum guarantee amount, for each 10-year period, as against 10.5% earlier.

* The Union urban development ministry decides that NDMC should invite open bids and provide the right of first refusal to IHCL

2012: NDMC decides to auction the property. But the licence is again extended for a year.

2013: IHCL moves the Delhi High Court against NDMC’s decision to auction the property and the court seeks the latter’s reply.

2016: 

* January: NDMC says it is in the process of assessing the assets of the hotel, in preparation for the auction of the property

* September 5: A single-judge Bench of the high court rules in favour of NDMC, dismissing the company’s plea seeking to restrain the latter from auctioning the property

* September 6: IHCL challenges the judgment of the single-judge high court Bench on the ground that it has invested in the hotel

* October 27: A division Bench of the court rules in favour of NDMC, saying the company has “no-right” of renewal of licence period