Thursday, Oct 02, 2014

Lease extension for Taj Mansingh if IHCL agrees to pay market rate

Taj Mansingh Hotel (Source: Express archive) Taj Mansingh Hotel (Source: Express archive)
Express News Service | New Delhi | Posted: September 5, 2014 3:29 am

The Indian Hotels Company Limited (IHCL) may get to continue its lease for the Taj Mansingh property if it agrees to pay the market price. Agreeing with the legal opinion given by former Solicitor General Mohan Parasaran on the issue, Attorney General Mukul Rohtagi said mutual negotiation between the New Delhi Municipal Council (NDMC) and IHCL for renewal of the lease was a better option than an outright auction.

“In my view, a public auction with a right of first refusal is impractical and would never yield a correct and fair price. The real choice is between negotiating for renewal or an outright public auction,” the A-G said.

“I agree with the opinion of the then Solicitor General that it will not be illegal for the NDMC to conduct mutual negotiations to arrive at a figure which would represent market value,” the AG stated.

Rohtagi also said though financial consultants E&Y had already given a report, fresh reports could be asked to determine the market value of the property. “After the market value is agreed to be paid by IHCL then that mode can be followed as suggested by the then SG,” Rohatgi said.

The 33-year lease for the property had expired in 2011, following which IHCL had been given a number of extensions. NDMC had considered open auction of the property after negotiations for the extension of the lease had broken down. The matter was also taken to the Delhi High Court, which had directed the two parties to come to a mutual decision.

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