After failing in its bid to continue operating the Taj Mansingh Hotel in Delhi, Indian Hotels, a Tata Group company, said on Thursday that it would make a bid to win it back after the Supreme Court approved its auction by the New Delhi Municipal Council.
“We respect the decision of the Supreme Court and intend to participate in the e-auction when it is held,” said an Indian Hotels spokesperson.
IHCL had initially moved the Delhi High Court in 2013 seeking to restrain the NDMC from auctioning the Taj Mansingh Hotel after a committee declined to renew the licence in its favour for 30 years.
NDMC and IHCL had inked an agreement in 1976 for 33 years. Thereafter, several extensions were granted.
Taj Mahal Hotel, too Indian Hotels’ woes may not end with its Delhi property as it may face a similar situation with the iconic Taj Mahal hotel in Mumbai. Indian Hotels shares closed down by 1.7 per cent on Thursday on the Bombay Stock Exchange.
Sanjay Bhatia, Chairman of the Mumbai Port Trust, has already indicated that the Trust may be forced to auction the Mumbai property. “Taj Colaba is on leased land. It has to pay up its dues according to the Supreme Court judgment and pay the ready reckoner rates. The case is going the same way as Taj Mansingh in Delhi and we may be forced to auction the property, which is on Mumbai Port Trust land,’’ he said.
The Taj Mahal hotel in Colaba in South Mumbai stands on a 4,000 sq mt plot belonging to the Mumbai Port Trust. The 99-year lease came to an end around 2000 and has not been renewed since.
In 2012, Mumbai Port Trust had sent an eviction notice to the hotel, but the latter moved the High Court in February 2013 seeking renewal of the lease.
Indian Hotels has to pay a rent of ₹1 crore every year on the leased land but the Mumbai Port Trust has been demanding the rent be doubled to ₹2 crore a month.