There are over 1000 guest houses in Paharganj and Karol Bagh areas of the city and most of them were carrying out commercial activities under the garb of hotels, not allowed under the rules, claimed representatives of hospitality industry.

A massive fire at 'Hotel Arpit Palace' in the wee hours of Tuesday claimed 17 lives in Karolbagh bringing the role of owners of these guest houses and concerned agencies under scanner regarding implementation of existing rules for them.

There are around 800 guest houses in Paharganj and about 250 in Karolbagh that are covered under the Saray Act but run as hotels, claimed Arun Gupta, president of Delhi Hotel Mahsangh.

"No commercial activity is allowed at these so called hotels, let alone restaurants or bars," he said.

Gupta alleged that the process of issuing licence to these guest houses was at "fault" since as many as five agencies were involved in it.

"They first have to take a fire department's no objection certificate. Permission is also granted by the local police, excise department of Delhi government, licensing department of police and the municipal corporations," Gupta said.

Delhi Hotel and Restaurant Owner Association president Sandip Khandelwal said the guest houses ran in the name and style of hotels by offering three star facilities.

"Around 90 per cent of these hotels are guest houses that assume name of hotel as per their requirements," he said.

He claimed that owner of the Hotel Arpit Palace was out of the country for some family function. The hotel was to be auctioned against some bank loan in December last year but it apparently did not happen, he said.

The ground floor of the Arpit Palace was being used as a restro-bar in the name and style of "Crossroads Restro & Bar".

Khandelwal claimed the licence was taken for running the restro-bar at the hotel.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)