Taj Mansingh Hotel Gives NDMC Its ‘Best Revenue’, Indian Hotels Tells Supreme Court

Challenging a Delhi High Court order allowing New Delhi Municipal Council to auction the iconic Taj Mansingh Hotel in New Delhi, the Tata's Indian Hotels Company Ltd. (IHCL) told the Supreme Court on Tuesday that it was "not clear" why NDMC wanted to auction the prime property which gave the municipal body its "best revenue".

An NDMC expert report suggests that the council would "lose revenue" if the hotel was auctioned to other players, the company said before a bench of Justices PC Ghose and RF Nariman.

"The evaluation report given by their own experts say NDMC would lose revenue if the hotel is auctioned to other player. The other person will come and make the hotel. It will take time. Revenue will stop during that period," Senior Advocate Harish Salve, representing IHCL, told the bench.

“The report says Taj Mansingh hotel gives the best revenue to NDMC ... For what do they want to go for an auction, it is not clear", Salve added. He also gave a list of dates before the bench which took it on record.

The arguments would continue on Wednesday.

The apex court, on November 21 last year, had directed that status quo be maintained with regard to NDMC's auctioning process of Taj Mansingh Hotel in New Delhi. It had also refused NDMC's prayer that the hotel should be restrained from taking any fresh bookings, saying "it's very difficult to restrain fresh bookings for a running hotel. Everything will be decided when we hear the matter."

IHCL, which runs the Taj Mansingh Hotel in the national capital, had on November 8 last year approached the apex court against the Delhi High Court order that cleared the decks for auctioning of the iconic property. The firm had challenged the October 27, 2016 verdict delivered by a division bench of the high court which had dismissed IHCL's petition challenging the move by the NDMC to auction the property.

The high court, in its verdict, had dismissed IHCL's plea saying the company has "no right" for renewal of the licence period and NDMC was "within its power" to secure maximum consideration for grant of licence for the property located at the prime location of 1, Man Singh Road in Lutyen's Delhi.

IHCL had moved the division bench of high court against the September 5 last year judgement of a single judge who had not acceded to the firm's request for renewal of licence for a further period, saying it was not entitled to an extension.

The property, owned by NDMC, was given to IHCL on a lease of 33 years. The lease had ended in 2011 and the company was given nine temporary extensions since then on various grounds, with three of them granted last year itself. NDMC had earlier said it was in the process of assessing the assets of the hotel in preparation for the much-delayed auction.

IHCL had earlier approached a single-judge bench of the high court seeking a decree of permanent injunction restraining the NDMC from interfering in any manner with the possession, right to operate, run and maintain the hotel premises.