The dispute between the Mumbai Port Trust and the Tata-owned Indian Hotels Company over the rental dues of the city’s iconic Taj Mahal Palace Hotel might lead to the auctioning of the hotel’s assets. The property may suffer a fate similar to the Taj Mansingh, which is now in the process of being auctioned by the New Delhi Municipal Corporation.

Mumbai Port Trust Chairman Sanjay Bhatia indicated the possibility of a similar outcome for the Taj Mahal Palace Hotel in Colaba. “Taj Colaba is on leased land. It has to pay its dues according to the Supreme Court judgement and pay the ready reckoner rates,’’ he said.

But Indian Hotels claims that while it has been paying the monthly lease rentals of ₹21 lakh, the Mumbai Port Trust has been demanding exorbitant rates to fill its revenue coffers. “Mumbai Port Trust is acting like a private landlord holding public land and asking for a 94 per cent increase in lease rentals.

“The matter is now in court and sub judice, but the court will decide the exact amount of lease rentals that we have to pay and a comprehensive formula has to be worked out for calculating the same,” a company official said.

At Indian Hotels’ recent AGM, shareholders had raised concerns over the eviction warning issued to the Taj. However, no reply was forthcoming from Tata Group Chairman Cyrus Mistry.

The hotel stands on a 4,000-sq-m plot belonging to the Mumbai Port Trust. The 99-year-old lease came to an end in 1999-2001, and has not been renewed. The rent was fixed in 1975 and revised in 1981, but many tenants refused to pay more and moved the courts.

In 2012, the Mumbai Port Trust sent an eviction notice to the hotel, but the latter moved the High Court in February 2013 seeking renewal of the lease. Indian Hotels is expected to pay a rent of ₹1 crore every year on the leased land.

Mumbai Port Trust, the city’s largest land owner, has also sent eviction notices to 47 other establishments, including Hindustan Unilever.

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