)
After securing its hold on Taj Palace hotel here for another 25 years, Indian Hotels Company Limited has filed an injunction suit in the high court here against the New Delhi Municipal Council (NDMC), seeking to stop the auction of the Taj Mahal hotel at Mansingh Road.
In a statement, IHCL said it had taken the step “on behalf of the hotel to protect its position”.
The 33-year lease for the iconic five-star hotel in Lutyens’ Delhi expired in October 2011, after which NDMC had given the company a year’s extension.
It is expected NDMC officials would meet on April 10 to finalise the details of the auction process, as well as the issuance of a Request For Proposal for the property. While NDMC officials denied any knowledge of the injunction suit, a senior official said, “They already have the first right of refusal in the auction process. It safeguards their interest.”
In a statement, an IHCL spokesperson said, “As the matter is now sub judice, we are not in a position to comment on this any further. We would like to reassure our guests, employees and business partners that we are committed to delivering the highest quality of service at all times and it is business as usual.”
Earlier, talking about the lease renewal of the Taj Mahal property on Mansingh Road, Raymond Bickson, chairman and managing director, IHCL, told Business Standard, “We are prepared. We have been partners for many years.” Taj maintains it has equity in the property and, therefore, cannot be treated as a mere licensee.
The Taj group pays NDMC 10.5 per cent of its gross revenue annually as rent and it is expected the proposed auction would result in a substantial increase in the amount. NDMC had appointed Ernst & Young as consultant to advise on the course of action on the lease renewal.
Last week, the Delhi Development Authority (DDA) had extended the lease for Taj Palace for 25 years, effective April 1. The company had signed a 30-year lease agreement with the DDA on April 1, 1983.
The hotel company’s lease for its flagship Taj Gateway property in Mumbai has also run its course. Currently, it is under litigation at the Bombay High Court.
