Blow to Tatas as Supreme Court allows NDMC to auction iconic Taj Mansingh Hotel
The bench of Justices P C Ghose and R F Nariman allowed the plea of the civic agency NDMC that the Tata Group cannot have the right to refusal in the hotel's auction.
Hotel Taj Mansingh, New Delhi.
New Delhi,UPDATED: Apr 20, 2017 14:12 IST
In a setback to Tatas, the Supreme Court has rejected Tata Group's plea seeking renewal of lease of Taj Mansingh Hotel in Delhi.
The Supreme Court also upheld New Delhi Municipal Corporation's (NDMC) right to e-auction the iconic property, which is situated in the heart of Delhi.
The bench of Justices P C Ghose and R F Nariman allowed the plea of the civic agency NDMC that the Tata Group cannot have the right to refusal in the hotel's auction.
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Taj Mansingh Hotel is currently being run by Tata Group firm Indian Hotel Company Limited (IHCL).
ALL YOU NEED TO KNOW ABOUT THE NDMC-TAJ GROUP FIGHT OVER ICONIC HOTEL:
- The IHCL had approached the Supreme Court in November last year challenging the Delhi High Court's order which okayed auction of the hotel.
- The contention between the Taj Group, owned by Tatas, and the NDMC was the former claiming that they have a right on the iconic property as they have invested over the years to build the brand.
- The Supreme Court had asked the NDMC to reconsider renewing lease of Taj Mansingh Hotel run by Indian Hotels Co Ltd.
- Senior advocate Harish Salve, representing Taj Group, had earlier argued that the NDMC had invested merely Rs 6 crore while the Taj had pumped in more than Rs 129 crore and paid license fee of over Rs 400 crore.
- He argued that the legacy of Taj was built by Tatas as the hotel played host to some of the most prestigious events in the country. The company further said that Tatas have contractual right of renewal and the NDMC must renegotiate with Taj.
- The company pointed out that Taj is not a mere lease holder. Taj collaborated and partnered with the NDMC in building the brand and it cannot be expected to bid for the value that Taj itself created.
- The Supreme Court bench today asked the NDMC to grant six months "breathing time" to the company in vacating the hotel in case they lose out in the e-auction.
- The Supreme Court also said that the "blemish-free" record of Tata Group firm IHCL may be taken into account by the NDMC while auctioning the iconic property.
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