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The New Delhi Municipal Council (NDMC) has sought more time from the Union home ministry to reply to the latter’s show-cause notice on the delay in the auction of the five-star Taj Mahal hotel (popularly called Taj Mansingh). NDMC Chairman Jalaj Shrivastava has asked the ministry for time to “appreciate the matter” and apprise the details. Shrivastava also intends to take the matter to the Council for a decision on the auction, according to insider sources.
The government had asked NDMC to explain the reason behind the delay of two years in the auction of the property. The lease for the property expired in October 2011, after which it was extended. The home ministry is 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 Union 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 pending in the high court.
Indian Hotels Company, which operates the Taj Group of hotels, had approached the high court in April to get a stay on the auction of its property. The court will hear the matter on November 7.
Although the company had not secured a stay order from the court, it did get an assurance that if NDMC coerced it into vacating the premises, the company could take legal recourse.
The company had signed a 33-year lease agreement for the property in Lutyens’ Delhi, which expired in October 2011. Subsequently, it 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.
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.
