The core group of secretaries on disinvestment has rejected the proposal of the ministry of civil aviation for an insertion of a clause on resale in the disinvestment proposals of Centaur Hotel, Delhi and Chefair.

The ministry had asked for such a clause after the controversial resale of the Centaur Airport Hotel, Mumbai.

According to official sources, the ministry is planning to approach the Cabinet Committee on Disinvestment for the inclusion of the resale clause.

Centaur, Delhi and Chefair are properties of the Hotel Corporation of India, a 100 per cent subsidiary of Air-India.

In October, the ministry of civil aviation had communicated to the global advisor J P Morgan to bring about necessary changes in the Delhi Centaur and Chefair sale agreements.

The clause that the ministry wanted added was that a buyer should be restrained from transferring the business during a lock-in period without the permission of HCI.

The reaction on the ministry's part comes after the buyer of the Centaur Airport Mumbai, Batra Hospitality sold the property to the Sahara India Group for Rs 115 crore (Rs 1.15 billion).

Batra Hospitality had bought over the hotel, along with flats and petrol pumps for Rs 83 crore in February 2002.

The re-sale of the property led to questions being raised about the legal issues involved. The initial reaction of the disinvestment ministry was that there was nothing wrong in the deal.

The ministry has now referred the matter to the Auditor General whose comments are awaited. The ministry of civil aviation has also been asked to present a detailed report on the property and its disinvestment procedure.

As far as the remaining HCI properties are concerned, the disinvestment ministry has re-issued advertisements for expressions of interest for all the three.

The process is being started over again as the ministry feels that an evaluation of the Delhi Centaur has not been done taking into consideration the privatisation and consequent upgradation of the Delhi Airport. The Chefair properties, on the other hand, attracted no buyers in the first instance.

HCI, a wholly owned subsidiary of Air-India, has a paid capital of Rs 40.60 crore with a net worth of Rs 30.31 crore. The corporation made losses of Rs 25.08 crore last year. Of the seven HCI properties, three have already been divested.