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The civic body hopes that by July end to get a clearer picture if the hotel deserves the right of first refusal in auction process

New Delhi, March 29, 2014 - New Delhi Municipal Council (NDMC) has extended the lease of Indian Hotels-operated The Taj Mahal Hotel (popularly Taj Mansingh hotel) for the fourth time. NDMC has extended the lease, which ends on March 31, for four months till July 31.

NDMC Chairman Jalaj Srivastav said: “The lease was extended since we have not received any word from the home ministry on how to go about the auction. Unless we are told what to do, we will not take any step in this direction.” The Delhi government answers to the ministry.

The body hopes by end-July, there would be more clarity and a decision would be taken on whether to give the right of first refusal to IHC in the auction process.

Other than the ministry’s directions, the code of conduct before general elections also makes it difficult for NDMC to go for an auction.

The matter is also in the high court here after IHC filed an injunction suit to get a stay on the auction. The hearing is on April 16.

IHC, which operates the Taj group of hotels, had approached the court in April to secure a stay on the auction of its Mansingh Road property.

Taj group’s contention is that it cannot be treated as just another licensee, which can be replaced after the end of a term.

Even though the land belongs to NDMC, Indian Hotels has invested money in the construction of the hotel’s building. The company, therefore, claims it has equity in the property. The firm had signed a 33-year lease agreement for the property, which expired in October 2011.

Subsequently, NDMC extended it by a year. While the company expected the lease to be renewed in October 2012, NDMC decided to hold an auction within a year. Thereafter, in October 2013, the lease was extended for another six months ending in March 2014, in expectation that the auction would have been wrapped up by then. Business Standard

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