The New Delhi Municipal Council (NDMC) on Thursday decided to auction the iconic Taj Mansingh hotel situated in New Delhi district and also scrap the licence of le Meridien Hotel over dues of Rs 526 crore.
The decision on Taj Mansingh, taken at a special meeting of the NDMC chaired by Chief Minister Arvind Kejriwal, brings to an end a six-year-old tug of war between the NDMC and the Tata Group, which has operated the landmark property for nearly four decades.
“Important decisions today’s NDMC meeting-open auction of Taj Mansingh, cancel le Meridien Hotel license, 240 days TMR (Temporary Muster Roll) every yr 2 all death cases (sic),” Kejriwal tweeted after the meeting.
The council did not give any specific date for the open auction of Taj Mansingh hotel, and also decided that the Tata Group will not be given the right to first refusal, which means they will have to contest with other bidders when the auction takes place.
“The NDMC will go for e-auction for grant of licence of Taj Mansingh Hotel and the Supreme Court will be apprised accordingly,” said the NDMC in its official statement.
Taj Mansingh, the five star property owned by the council, was given to Tata’s Indian Hotels Company limited (IHCl) on lease for 33 years. The lease expired in 2011 and the company was given nine temporary extensions since then on various grounds.
The NDMC, under the administrative control of the Ministry of Home Affairs had got the nod to auction the hotel in March 2015 but the management of Taj Mansingh Hotel remained with IHCl as they went to court.
It may be noted that, NDMC had also selected SBI Cap, which was the Centre’s adviser for coal blocks auctions, to be its transaction advisor for the auction. However, the process got delayed with the Tata’s moving court.
last November, IHCl had moved the SC against a Delhi High Court order allowing the NDMC to auction the hotel, arguing there was no need to do it as it generates good revenue for the civic body.
In the le Meridien Hotel case, the licence fee had been a bone of contention, with allegations of irregularities against the civic body in recovery of licence fee from the five-star property located in lutyens’ Zone. Notably, the NDMC had hiked its licence fee to over Rs 3 crore in 2016.
The council on Thursday decided that the licence of the hotel must be terminated due to non-payment of licence fee worth Rs 526 crore. “The Delhi High Court will be apprised accordingly, keeping in view the gross abuse of process of law by the hotel,” said the council
It is alleged that NDMC officials allowed a settlement of pending licence fee dues towards the civic body by the hotel by accepting a one-time fee of over Rs 150 crore which allegedly resulted in a loss of Rs 400 crore (with interest) to the exchequer.
Meanwhile, the council has also decided to conduct fresh e-auction for licencing out the ‘Asian Hotel’ through M/s MSTC ltd and to forfeit the Earnest Money Deposit of the earlier provisionally-selected e-bidder as it failed to comply with the terms and conditions of the e-auction.