Supreme Court orders status quo in Taj Mansingh Hotel auction process
New Delhi: In a relief to Tata Group, the Supreme Court on Monday restrained New Delhi Municipal Council (NDMC) from auctioning the Taj Mansingh Hotel in the capital.
“Maintain status quo for now,” said a bench comprising justices P.C. Ghose and U.U. Lalit.
Tata Group-owned Indian Hotels Co. Ltd (IHCL) had moved the apex court against a Delhi high court’s ruling allowing auction of the Taj Mahal hotel.
The court also allowed Taj to continue to take fresh bookings from customers. NDMC had asked the court to restrain the hotel from taking any fresh booking beyond January.
On 27 October, a division bench of the Delhi high court dismissed IHCL’s appeal against a 5 September order of a single judge of the same court, denying a right of first refusal to IHCL on the auction of the Taj Mansingh hotel as it would not bring the highest bidders to the table.
Justice Rao, on 5 September, said that IHCL was not entitled to an automatic extension of its licence to run and manage the Taj hotel as the NDMC Act required any transfer of rights in the property at a “value at which such immovable property could be sold, leased or otherwise transferred in normal and fair competition”.
IHCL had approached the Delhi high court first in April 2013, seeking to restrain the NDMC from auctioning the Taj Mansingh Hotel after a committee declined to renew the licence in its favour for 30 years.
The New Delhi Municipal Committee (as then called) entered into an agreement with IHCL on 18 December 1976 to construct and run a five-star hotel in one of the prime locations in Central Delhi—1, Mansingh Road.
The hotel became functional on 10 October 1978. According to IHCL, the original licence agreement—with NDMC as the licensor and IHCL as the licencee—later became a joint venture with two equal partners. The high court rejected these claims.
The original licence operated for a period of 33 years from late 1976 and concluded in 2011. Thereafter, several ad hoc extensions were granted till 31 January.
The case will be heard next in January.