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Once again, the New Delhi Municipal Council (NDMC) has failed to take a final call on the fate of Tata’s luxury property in Delhi — Taj Mansingh Hotel.
At its Council meeting here on Monday, NDMC decided to give an extension of six months (till March 2014) to Indian Hotels Corporation (IHCL), pending the views of the Solicitor General on auctioning process of the property. One of the reasons cited for this is also the forthcoming State elections.
This is the third such extension that IHCL has got from the NDMC since the expiry of the 33-year-old lease in October 2011.
The first extension was till October 2012, second is set to expire on October 10. But, the third extension is just for six months rather than for a year.
“The extension will be till March 31, 2014 or till the Ministry of Home Affairs conveys instructions to us with Solicitor General’s opinion…. which ever is earlier,” said NDMC Chairman Jalaj Shrivastava.
Besides, the auctions may also become difficult immediately as the State goes for polls on December 4 and will be governed by the Election Commission’s code of conduct. However, Shrivastava said that the Council can get special permission from the Election Commission to auction the property, if need be.
It may be recalled that the civic body had earlier decided to hold the auctions giving Tata’s the first right of refusal. However, the Ministry of Home Affairs felt that giving the first right of refusal to IHCL will result in lower bid in the public auction of the property. The iconic hotel set in the heart of Lutyens Delhi saw interest from both national and international players such as ITC, Sahara, Oberoi, when the news of it going under the hammer first surfaced.
The matter went to Ministry of Home Affairs because it governs the Ministry of NDMC. In April, IHCL filed an injunction petition at the Delhi High Court claiming part ownership and that it had invested in the property. The court said that NDMC cannot take any coercive action against IHCL. The next hearing is scheduled for November. This had led NDMC to seek Solicitor General’s opinion through the Law Ministry after it had got a nod from its nodal Ministry.
Ernst & Young were the advisors for NDMC. Till 2011, Taj Group (India Hotels Company Ltd) was paying 10.5 per cent of its gross revenues which had been revised to 17.5 per cent of the gross revenues by NDMC for the extension period, according to sources.
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