About two months before the expiry of the lease of the Taj Palace property here, the Delhi Development Authority (DDA) has said it is ready to resolve disagreements on rent. DDA was open to reaching a settlement with Indian Hotels Company (IHC), which runs the Taj hotels, outside the arbitration process under way, a DDA official told Business Standard.
While lease renewal was being discussed, DDA wanted to resolve the matter on time, he said. It wanted to avoid the situation faced by New Delhi Municipal Council (NDMC) in the Taj Mahal (Taj Mansingh) property case, the official said, adding NDMC could have sorted the matter of lease renewal, had it not taken the issue to the council.
IHC has requested DDA for a lease renewal and has also paid the principal amount of Rs 26 crore. According to DDA, interest payment of Rs 34 crore is pending.
DDA’s contention with IHC is the method used to calculate rent. DDA had objected to the exclusion of about 11 items in the gross receipts. Following this, the two sides entered into arbitration in 1997.
The authority is keen to suggest a compromise and is ready to give up on some of its demands, provided IHC agrees to include at least some of the items in gross receipts. These include staff food, income from the shopping arcade, telephone recoveries, banquet income, service charges, etc.
On April 1 1983, the Taj Group had signed a 30-year lease agreement with DDA for the Taj Palace. After renewal, the lease would be extended for another 25 years.
