Delhi HC dismisses Tata's appeal for management rights over Taj Mansingh Hotel

The Delhi High Court, on 27 October, dismissed the TATA group's appeal for retaining management rights over the Taj Mansingh Hotel, and in all practicality, told the business conglomerate that it will have to participate in the auction process.

The high court gave the green signal to the New Delhi Municipal Corporation (NDMC) to go ahead with the public auction of the Taj Mansingh Hotel located in Central Delhi.

Also Read: The Cyrus Mistry effect: Tata Steel responds to BSE, NSE on $18-billion 'write-down'

A bench of Justices Pradeep Nandrajog and Pratibha Rani had earlier reserved the verdict on Indian Hotels Company Ltd's plea seeking to restrain the NDMC from auctioning the property.

On 25 September, a single judge had dismissed the suit by the current operator, IHCL , to renew its license and upheld the NDMC's decision to go for the auction. The next day, the IHCL filed an appeal before a division bench against this order.

Also Read: Cyrus Mistry to Tata Sons Board: Wasn't even given a chance to defend myself

The property, owned by NDMC, was given to IHCL on a lease for 33 years, which ended in 2011. The IHCL has been managing the property since then through several extensions. The IHCL in 2013 filed a civil suit against the civic body in the Delhi High Court after it decided to auction the property.

The NDMC or New Delhi Municipal Committee (as it was called) entered into an agreement with the IHCL a subsidiary of Tata Sons Ltd, on 18 December 1976 to construct and run a five-star hotel in one of the prime locations in Central Delhi, Mansingh Road.

Also Read: Tata Sons, Cyrus Mistry to battle it out in court, file caveats against each other

The hotel became functional on 10 October 1978. According to IHCL, the original licence agreement with NDMC as the licensor and IHCL as the licencee - later became a joint venture with two equal partners. The high court rejected these claims.

-ANI