NDMC to review court notice before Taj Mahal hotel auction

Written by feBureau | New Delhi | Updated: Apr 11 2013, 06:00am hrs
New Delhi Municipal Council (NDMC) has decided to postpone the auction process of Taj Mahal hotel on the Mansingh Road till its completes the review of the Delhi High Court notice.The court has sought the civic agency's response within two weeks on Tata Group's plea seeking to restrain the land-owning agency from auctioning the property. The civic agency had already prepared Request for proposal (RFP) for auctioning of the hotel, which was to be cleared by the Council on Wednesday to set the auctioning process rolling.

It was decided by the council that any decision on the auctioning of hotel will be taken only after studying the court's notice. A special council will be called to discuss the matter. The decision would be taken within two weeks, Arun Kumar Mishra, PRO, NDMC told FE.

Tata Group's Indian Hotel Company, operator of Taj Mahal hotel, had challenged the NDMCs decision to auction its property in the Delhi High Court last week.

An NDMC official, however, said the auction process hasn't been stopped, adding the decision will be taken only after reviewing the Court's notice.

As the matter is now subjudice, we are not in a position to comment on this any further, Taj spokesperson statement said.

The 33-year lease of IHC for the hotel ended in October 2011. The NDMC then granted a one-year extension to IHC, buying itself time to decide the future course of the action for which it appointed E&Y to advise on the modalities to be followed once the lease period is over. E&Y had suggested renewal of the lease by renegotiating the terms or auctions by giving IHCL the right to match the highest bid.

In the freshly extended period, NDMC did not revise the revenue share the company would have to share with it, which is at 17.5% of the gross revenue. This was revised in 2011 when the lease expired and was extended by a year.