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In a complete turnaround from yesterday’s stand, New Delhi Municipal Council (NDMC) decided today that it would put on hold any deliberation on auction of Taj Mansingh Hotel, till the next hearing of the Delhi High Court slated for July 18.
It is likely that NDMC may convene a special meeting soon to 'reconsider' the proposed bidding process for Taj hotel, an official said.
Many political leaders, including Delhi chief minister Sheila Dikshit, are of the view that a lease renewal is possible for the hotel, in line with the formula used by the Delhi Development Authority (DDA) for other commercial properties including Taj Palace, yet another hotel managed by Indian Hotels in Delhi.
The court had yesterday asked the civic body to reply to Indian Hotels’ petition within two weeks. Indian Hotels, which manages Taj Mansingh among other hotels across the country, had filed an injunction suit in the High Court to get a stay on the auction of the property “to protect its position” last week.
NDMC had said yesterday that since there was no stay on the auction, it would go ahead with its scheduled council meeting, slated for today, and finalise the details of the request for proposal to begin the bid process.
While the high court has not given a stay order, it has told the company that it is at liberty to approach the court if NDMC takes any coercive action against it.
The 33-year lease for the iconic five-star hotel in Lutyens’ Delhi expired in October 2011, after which NDMC gave one year extension to the company. Indian Hotels said that it has a right to seek an extension of the lease because it "built a permanent structure" and invested in development of the area.
The civic body had asked the court to hear its plea and arguments before taking any decision on the stay order over the auction.
Indian Hotels, in its plea, has cited its long relationship with NDMC to grant a stay on the auction process. It has also said that the company shares its revenue with NDMC as rent every year for managing the property built on NDMC’s land.
The Taj group pays NDMC 10.5% of its gross revenue annually as rent and it is expected the proposed auction could result in a substantial increase in the figure. The NDMC had appointed Ernst & Young as consultant to advise on the future course of action on the lease renewal.
