Council meets today to finalise auction terms,IHCL can go to court against coercive steps.
The Delhi High Court on Tuesday directed the New Delhi Municipal Council (NDMC) to reply to the plea filed by the Indian Hotels Company Limited (IHCL) seeking an injunction against the proposed auction of the Taj Mansingh hotel by the civic agency.
Justice M L Mehta asked the NDMC to submit a reply within two weeks on the petition filed by the IHCL which operates the hotel under a licensing agreement signed in 1976. The court also asked the NDMC not to dispossess the hotel company from the property till the next date of hearing on July 18.
The licence ran out in October 2011 and the lease to the company was extended by a year. The NDMC later decided to auction the property. Last week,the IHCL filed an injunction suit to restrain the NDMC from going ahead with the auction.
Appearing for NDMC,senior advocate V P Singh accepted notice on behalf of the land-owning agency and sought time of two weeks to file a reply.
Referring to a Supreme Court ruling in the Chanakya Cinema case and the NDMC Act,Singh submitted that the land has to be put up for auction after the end of the lease period.
Senior advocate N K Kaul,appearing for IHCL,argued that as per the contract between the parties,the extension of lease has to take place on the basis of mutual understanding. He submitted that the lease of the land has been with IHCL for more than 33 years and the company has built a permanent structure there and has also spent a huge amount of money on development of infrastructure in the area. It,therefore,has a right to seek extension of the lease,he said.
The High Court granted liberty to the IHCL to approach the court if any coercive steps are taken against it by the NDMC.
Issue notice to NDMC and reply to be filed within two weeks. If there is any threat of coercive step against it,the plaintiff is at liberty to approach the court, Justice Mehta said. The NDMC is scheduled to finalise the terms and conditions of the proposed auction at a meeting on Wednesday. Asked whether the council will go ahead with the auction and let IHCL have the first right of refusal,NDMC chairperson Archna Arora said: We do not have a stay order and the council only can decide what decision to take on Taj Mansingh. We have done our job and put up request for proposal documents before the council.
A statement issued by the Taj Hotels spokesperson on Tuesday evening said the hotels functioning would continue as usual. The court order is awaited. As the matter is sub-judice,we are not in a position to comment on this, the release says.