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Taj Mansingh lease seems to be heading towards a definite extension for the fourth time, after the Delhi High Court today deferred the date of hearing for the Indian Hotels Company’s injunction suit to February 7. IHCL had sought more time to examine the documents regarding New Delhi Municipal Council’s internal meetings with the Home Ministry regarding the Taj Mansingh auction.
In the last hearing held on November 7, court had directed NDMC to provide the documents sought by the IHCL which operates the Taj group of hotels. Meanwhile, NDMC is awaiting home ministry’s direction to decide on the manner of auction. With no word from the solicitor general yet on whether or not to give Taj Mansingh the first right of refusal during the auction, home ministry too has not been able to respond to NDMC’s queries on this matter.
Taj group’s contention is that it cannot be treated as just another licensee which can be replaced after the end of a term. Even though the land belongs to NDMC, Indian Hotels has invested money in the construction of the hotel’s building. The company therefore claims to have equity in the property.
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The civic body could not hold an auction earlier during the Delhi Assembly elections due to certain clauses in the Election Commission’s code of conduct. But with general elections likely to be advanced to April this year, NDMC will again have a very small window to plan its auction.
In April, Indian Hotels Company (IHC), which operates the Taj Group hotels, had approached the Delhi High Court to secure a stay on the auction of its Mansingh property. The court had assured the company it could seek legal recourse if NDMC took any coercive action.
The company had signed a 33-year lease agreement for the property, which expired in October 2011. Subsequently, NDMC extended it by a year. While the company expected the lease to be renewed in October 2012, NDMC decided to hold an auction within a year. Thereafter in October 2013, the lease was extended for another six months ending in March 2014, in expectation that the auction would have been wrapped up by then.
