IHCL moves SC against auction of Taj Mansingh hotel

NEW DELHI: Tata group-owned Indian Hotels Company Limited (IHCL) on Monday approached the Supreme Court challenging order of Delhi high court which had dismissed its plea challenging the tender procedure for the proposed auction of luxury hotel Taj Mansingh by New Delhi Municipal Council.
IHCL mentioned the petition before a vaction bench of Justices L Nageswara Rao and M M Shantanagoudar for an urgent hearing. agreeing to hear the plea the bench posted the case to June 1. “On mentioning, the matter is taken on board. List the matter on June 1, subject to curing of defects, if any,” the bench said.

The HC on May 22 rejected the plea of IHCL and allowed NDMC to proceed with the auction. The court said it is “apparent that the complex nature of eligibility conditions that NDMC has insisted upon, while considering tenders for the hotel plot, are based on thought and deliberation” and refused to intervene in a policy decision.

“As held by the Supreme Court, time and again, the wisdom of a particular policy cannot be considered, but its legality or procedural fairness is only subject to review. If these factors are kept in mind, the fact that some conditions could have been better phrased, or that some more conditions could have been introduced is not sufficient to conclude that the conditions that have been prescribed are arbitrary and unreasonable,” the HC had said.

In April 2017, the Supreme Court had allowed the civic agency to e-auction the iconic five-star hotel, which is currently being run by Tata group’s IHCL. IHCL argued before the high court that NDMC had failed to consider last year’s SC order that they had an unblemished track-record and should be given weightage in the tender.

IHCL had completed the construction of the hotel building, consisting of approximately 300 rooms, with all other allied facilities and started the commercial operation of the hotel with effect from October 10, 1978. The agreement period of 33 years is reckoned from the said date and the company had incurred an expenditure to the tune of Rs 461.61 lakh. The agreement expired in 2011 and NDMC decided to auction the property, hoping to fetch a better price for granting the lease of the property.