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Rediff.com  » Business » Hearing on Taj Mahal hotel postponed

Hearing on Taj Mahal hotel postponed

July 19, 2013 12:47 IST

Taj Mahal HotelThe court hearing on the Taj Mahal hotel has was deferred to November 7, owing to the absence of Delhi High Court judge M L Mehta.

The lease extension for the property expires in October.

In April, Indian Hotels Company, which operates the Taj group properties, had filed an injunction suit in the high court to secure a stay on the auction.

Since the matter is sub judice, New Delhi Municipal Council, the owner of the property, isn’t likely to hold an auction till the court announces a decision on the matter.

Earlier, the court had told Indian Hotels Company the company was free to approach the court if NDMC took any coercive action against it.

In its previous council meeting, the civic body had referred the auction matter for the opinion of the solicitor general, after the home ministry had said Indian Hotels Company shouldn’t be given the first right of refusal in case of an auction.

In a letter, the ministry had expressed concern “the provision of the first right of refusal will result in a lower bid in the public auction”.

The company had signed a 33-year lease agreement for the property in Lutyens’ Delhi; the agreement had expired in October 2011. Subsequently, Taj Mahal hotel 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 within a year.

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.

Image: Hotel Taj Mahal Palace and Tower; Photographs: Courtesy: Tajhotels.com

Ruchika Chitravanshi in New Delhi
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