The Supreme Court on Thursday allowed the New Delhi Municipal Council to go ahead with the e-auction of the property housing the iconic Taj Mansingh Hotel here, currently run by Tata Group's Indian Hotels Company Ltd. (IHCL).
An apex court bench of Justice Pinaki Chandra Ghose and Justice Rohinton Fali Nariman said the IHCL will have six months to vacate the building — known as Taj Mansingh — in case the New Delhi Municipal Council (NDMC) does not succeed in its e-auction.
The court said the NDMC will keep in mind that the IHCL has an unblemished track record in hotel management.
Appearing for the IHCL, senior counsel Harish Salve told the court that the proposed auction was not right as they have certain contractual rights for lease renewal.
Pressing for the right of first refusal if the property housing Taj Mansingh was to go under the hammer, Salve told the court that at some point "we must get renewal opportunity as our track record has been unblemished".
The IHCL had challenged the Delhi High Court's October 27 order dismissing its plea against the auction of the property by the NDMC. The apex court had ordered for a status quo on November 21, 2016.
Earlier, a division bench of the Delhi High Court had reiterated the September 25 single-judge order that dismissed an IHCL suit to renew its licence and upheld the NDMC's decision to auction the property.
The property, owned by the NDMC, was given to IHCL on a 33-year lease that ended in 2011. The IHCL has since been managing the property on several extensions it has got from the municipal council.
It may be noted that the NDMC, in its council meeting earlier, had decided to go for outright auction in these kind of matters and resolved that the best available method to NDMC, which is a public authority and custodian of public property, is to obtain the fair market value of rental of the said property in a fair, reasonable, non-discriminatory, transparent, non-capricious, unbiased, without favouritism or nepotism, in pursuit of promotion of healthy competition and equitable treatment, and to sub-serve the common good, is to opt for e-auction of the said premises.
The apex court had asked the NDMC to reconsider its decision to auction the five-star hotel in the wake of the Attorney General(AG) and Solicitor General's (SG) opinion not to initiate any such a process. It had noted the fact that the opinions of both top law officers against the auctioning of the hotel was not placed before the Ministry of Home Affairs for consideration. The bench had also taken note of the fact that there was an internal opinion of top NDMC officials against the auctioning process.