Taj Mansingh, other hotels to go under hammer
The New Delhi Municipal Council (NDMC) on Thursday decided to auction off two of the most luxurious properties it owns- Taj Mansingh hotel and Asian International, and also cancelled Le Meridien Hotel's licence over dues of Rs 523 crore.
The long-pending decisions on Taj and Meridien were announced by Chief Minister Arvind Kejriwal after a special council meeting of NDMC.
The council also decided that Tata will not be given the right to first refusal, which means they will have to contest with other bidders when the auction takes place. NDMC did not say when the auction will be held. "Important decisions (at) today's NDMC meeting," Kejriwal tweeted.
NDMC vice-chairman, Karan Singh Tanwar told Millennium Post: "Today we initiated action against three hotels and are planning do the same with other defaulters including Connaught, Lalit and Metropolitan. Initially we will not issue eviction notices as we have to go through some formalities."
IHCL's 33-year lease of the Taj hotel expired in 2011 and it was given nine temporary extensions on various grounds.
NDMC, which works under the administrative control of the Union Home Ministry, got the nod to auction the hotel in March 2015.
At the time, the civic body had also selected SBI Cap, which was the Centre's advisor for coal blocks auctions, to be its transaction advisor for the auction. However, the process got delayed when Tata moved the Delhi High Court.
Earlier in November, the Apex Court had issued a notice to NDMC in reply to the plea against the auction of the hotel. The Delhi High Court had dismissed the Tata Group's appeal to retain the managerial rights over the Taj Hotel and told the business group to participate in the auction process, if they wished to continue having management rights.
In November 2016, Tata Group's IHCL (Indian Hotels Company Ltd) had moved to the Supreme Court saying that they had no need to auction the Taj Hotel as it generated good revenue for the civic body.
According to the minutes of Thursday's meeting, the body decided that the best available method for NDMC "to obtain the fair market value of rental of the said property in a fair and transparent manner is to opt for e-auction of the premises."
"The right of first refusal to the Tata's will not be in public interest and would not yield a correct and fair price. The Supreme Court will be apprised of the decision accordingly," a senior NDMC official said.
An IHCL spokesman refused to comment, saying "the matter is sub judice".
The civic body also decided to cancel the licence of Le Meridien, another posh hotel in the Lutyens' Delhi.
"The council decided that the licence of the hotel be terminated due to non-payment of licence fee worth Rs 523 crore and the Delhi High Court will be apprised accordingly, keeping in view the gross abuse of the process of law by the hotel," the NDMC official said.