Clearing the roads for the auction of Capital’s Taj Mahal Hotel by the New Delhi Municipal Council (NDMC), the Delhi High Court on Tuesday rejected a plea by Tata Group-owned Indian Hotels Company Ltd (IHCL) challenging the tender procedure for the proposed auction.
A Bench of Justices S. Ravindra Bhat and A.K. Chawla said it was unable to come to the conclusion that the conditions prescribed by the NDMC for the auction are arbitrary and unreasonable.
The Supreme Court had on April 20 last year allowed the civic agency to e-auction the iconic five-star hotel Taj Mansingh, currently being run by Tata Group firm IHCL, in the heart of the Capital.
Indian Hotels had moved the High Court seeking to quash the tender process initiated by the NDMC last month for the prime property at No.1, Mansingh Road, New Delhi.
Company’s objection
The company had objected to the tender document saying it did not incorporate the essential conditions mandated by the Supreme Court with respect to the taking into consideration of its unblemished track record.
The NDMC, represented by senior advocate Sanjay Jain, had argued that it has weighed in all the eventualities and has ensured that only serious bidders with full capacity to render quality service participate.
Mr. Jain said the question of unblemished track record and nature of services is an inherent part of the tender process which would have to be evaluated after the rival bid unfolds and cannot be articulated in the manner that Indian Hotels wishes it.
Indian Hotels had applied sometime in 1976 for participating in the construction of a hotel of international standards, which was accepted by the Union Works and Housing Ministry, resulting in allotment of No.1 Mansingh Road to the NDMC on perpetual lease basis.
The NDMC entered into a collaboration agreement with Indian Hotels for the construction of the hotel and also executed a licence agreement which was to be in force for 33 years.
