Comments
The ownership saga of the iconic Taj Mansingh Hotel has taken a new twist. Indian Hotels Company (IHCL), which manages the Taj Mansingh, has filed an injunction suit in the Delhi High Court, even as the New Delhi Municipal Corporation (NDMC) is gearing up to invite bids for auction of the property.
The Group in a statement said that it was doing so to ‘protect its position’, but refrained from giving any more details on the grounds that the matter is now sub judice .
However, those tracking the sector said, this could be to pre-empt the bids being invited by the NDMC for the property.
The auction was being keenly watched by the other majors in the sector, considering the rare opportunity of a hotel in a premium location like Lutyens’ Delhi being up for grabs. The Sahara group, Oberoi Hotels, in which Reliance Industries has a stake, and several other Indian and international hotel players were reportedly keen to bid for the hotel.
The NDMC Board was planning to meet next week to finalise the terms and conditions of the open auction. IHCL will have the first right of refusal but will have to match the highest bid in the auction.
When contacted, NDMC chairperson Archna Arora said that she was not aware of the case as yet.
Taj Mansingh’s lease for the property ended on October 2011.
The Group had got an extension for a year in September 2012. Taj has been operating the hotel on the NDMC land for 33 years.
However, when extending the lease in September 2012, the NDMC Board also decided to complete the auction process within a year.
Indian Hotels Corporation was earlier paying 10.5 per cent of the gross revenues annually as rent but this was increased to about 17.25 per cent of the gross revenues for the extension period.
Taj Hotels officials have maintained that the company had equity participation in the project considering it was bare shell and the hotel major had put in money to build the property.
Our Mumbai Bureau reports: Indian Hotels Company has invested approximately Rs 129 crore over the last 33 years, to position the hotel as an iconic property and to maintain it to international standards.
IHCL was responsible for the operations and maintenance of the hotel, and said it has paid around Rs 293.32 crore as licence fee over 33 years to the NDMC.
IHCL has prayed that the court “pass a decree of permanent injunction, restraining the defendant...from giving known or unknown decision to conduct an auction”.
“For the last two years, IHCL has been paying the increased licence fee. The return on investment has amounted to Rs 293.32 crore,” officials said.
According to market estimates, the Tata's earn Rs 150 crore annually in revenues from the property, which is located at a prime spot in Lutyens Delhi.
> amritanair.ghaswalla@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.