Delhi Civic Body Informs Supreme Court Of Intent To Auction Taj Mansingh Property

The New Delhi Municipal Council (NDMC) on Friday informed the Supreme Court that it will put the Mansingh property in the national capital up for e-auction. The decision was taken in the civic body's meeting on Thursday. The property is currently managed by the the Indian Hotel Co. Ltd. (IHCL), the parent company of the Taj Group of Hotels.

The e-auction, for all practical purposes, gives NDMC the right of first refusal, the civic body said. There is no decision yet on when the auction will take place.

IHCL came to know of the NDMC's decision only through newspapers on Friday and were served the reply in court on Friday, its counsel said.

A bench of Justices PC Ghoshe and Rohinton Nariman adjourned the case till March 22.

The apex court in its last hearing, had asked NDMC to reconsider its decision after the civic authority said it will not renew the 33-year lease to the Taj Group to manage the property.

The Taj Group has maintained that it is willing to pay the prevalent market price for the lease renewal but is not in favour of an open auction, arguing that it would artificially drive up the property's price. The hotel chain also wants the first right of refusal if an auction is held.

NDMC has argued that an open auction is the best way forward, adding that the Taj Group can participate in the process as well.

IHCL and NDMC had signed a joint venture agreement for the 11-storey hotel in 1978, under which land and construction costs would be borne by the NDMC and the operation and maintenance charges would be borne by IHCL. After IHCL's licence expired in 2011 and ad-hoc extensions were granted to the company till January 31, 2016.

The Delhi High Court had earlier ruled in NDMC's favour, rejecting the Taj Group's plea seeking a stay on the civic authority's decision to auction the property.