The Supreme Court on Friday told the Indian Hotels Company (IHC), which runs the Taj chain of hotels, that its “unblemished track record” in running the Taj Mansingh hotel for the past 40 years will weigh with the New Delhi Municipal Council (NDMC) during the open auction but such a condition cannot be inserted in the tender conditions.
The Vacation Bench of Justices lN Rao and M Mohan Shantanagouder observed, “If it is said in the tender that you will be given weightage for this reason, nobody will bid.” IHC counsel senior advocate Abhishek Manu Singhvi finally decided to withdraw the petition to try his luck at a subsequent stage after the auction process gets underway.
The basis for IHC to approach the Vacation Bench was the April 20, 2017 order by the apex court which directed IHC to participate in the open auction conducted by the property owner NDMC. The court further stated that while choosing the bidder, NDMC will take into consideration the unblemished track record of IHC and assess the capability of potential bidders to run the hotel situated in the heart of the Capital.
Singhvi pointed out that the tender document issued by NDMC post the SC order did not contain any clause giving weightage to the above two considerations flagged by the apex court. He compared it with the earlier tender document prepared by NDMC in January 2016 and found it to be the same.
The Bench told Singhvi, “The auction is yet to take place. Why are you speculating at this stageIJ The court has not given the manner and method of giving weightage. But the bidders are aware that some weightage will be given to you. This is not an examination where weightage can be recorded by way of any marks.”
Singhvi stated that his client was ready to participate in the open auction. But the fact that the company had paid a licence fee of Rs 462 crore since beginning operation in 1976 and infusing an additional capital expenditure worth over Rs 175 crore was the reason for its anxiety to win the bid.
But the Bench was determined not to interfere with the terms of auction that was yet to commence. The Bench told Singhvi that this ground could be urged after the bids are considered. After arguing for sometime, Singhvi sought to withdraw the petition. The Bench allowed the same.