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The auction of The Taj Mahal Hotel (popularly Taj Mansingh hotel) here is not likely to be finalised before the second half of this year. The New Delhi Municipal Council (NDMC) is considering a lease extension of at least four months to the Taj group. The lease for the property would expire by March 31.
“We would wait for the home ministry’s direction till the last moment so we can plan our course of action,” said Chairman Jalaj Srivastav.
This would be the fourth time the NDMC would be giving an extension. It cannot hold an auction once the code of conduct kicks in from March, before the Lok Sabha polls. The NDMC has not been able to get clarity on whether to give the Taj group the first right of refusal after the ministry raised objections to this.
“Once it gives us the directions based on the solicitor-general’s opinion, we can do the auction in two months. Since we want global bids, we would to give sufficient preparation time to companies,” Srivastav said. The matter is also in the high court here after the Indian Hotels Company filed an injunction to get a stay on the auction. The next date of hearing is April 16. The company had approached the court to secure a stay on the auction last in April.
The Taj Group’s contention is 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. 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.
