Tata likely to get 3 months' extension for Taj Mansingh hotel

Written by PTI | New Delhi | Updated: Sep 29 2013, 17:59pm hrs
Taj HotelThe IHCL has been running the landmark property for past 35 years and its lease is due to expire on October 10. (AP)
Tata-owned Indian Hotels Company Limited (IHCL) is likely to get an extension of three months to operate Taj Mansingh hotel in posh Lutyens Bungalow Zone here after its lease expires next month.

The IHCL has been running the landmark property for past 35 years and its lease is due to expire on October 10.

The New Delhi Municipal Council, which owns the property located in the heart of the national capital on Mansingh road, is yet to come to any conclusion on auctioning the hotel as it is waiting for the Solicitor General's opinion.

NDMC sought the opinion of the Solicitor General after it got a nod from the Home Ministry for it earlier this month.

NDMC officials said the civic body is likely to extend the lease with the IHCL for operating the hotel for at least three months as it cannot reach a decision on the issue until it gets the opinion of the Solicitor General.

The decision to grant the three months extension to IHCL is likely to be taken during the next council meeting to be held on October 7.

"The election code of conduct for the assembly polls in Delhi is likely to be in place in a few days and it will become difficult to auction the property during that time," an official said.

However, according to NDMC chairperson Jalaj Srivastava, the agency can approach the election commission for a "special permission" to auction the property in that case.

"If the agency gets the Solicitor General's opinion during the time when the code of conduct is in place, we can seek special permission from the Election Commission to allow us to auction the hotel," Srivastava said.

The issue surrounding the hotel has been caught in a controversy since its lease ended in October, 2011.

The property, constructed by NDMC, was given to Indian Hotels Company Limited in 1978 on lease for 33 years. When the lease came to an end in 2011 and NDMC was about to renew the lease, the Urban Development Ministry intervened and asked it to auction the property.

As time was running out, the NDMC gave a year's extension to IHCL. While the company expected the lease to be renewed in October 2012, the process was stalled temporarily as NDMC could not take a final call.

The agency had then decided to give one-year extension to the Tatas, besides giving the first right of refusal in an auction to be conducted within one year.

After the NDMC had decided to auction the property, the IHCL approached the Delhi High Court seeking a stay on the process. Though the Tata group company had not got a stay order from the court, it did get an assurance that if NDMC takes steps for vacating the premises, the company could take legal recourse.

When the Home Ministry asked the NDMC not to give IHCL the first right of refusal while auctioning the property, the civic body went to the Solicitor General to seek opinion on it, an action which had annoyed the Ministry.

It had then issued a show cause notice to NDMC asking why there has been a "delay" in auction of the hotel.

However, the Ministry later asked NDMC to approach the Solicitor General on its own.