The Supreme Court on Thursday allowed the Delhi civic body to auction Mansingh hotel, which is managed by the Taj Group of Hotels.
The Supreme Court asked the New Delhi Municipal Corporation to take into consideration the unblemished character, track record and capability of the Indian Hotels Co, the Tata Group company which runs the Taj chain.
Indian Hotels contended that the NDMC had not considered its request of renewing the lease without an auction. The civic authority, however, said there was no right of renewal, and an e-auction, for all practical purposes, gives the company the right of first refusal.
The apex court said that the decision to go for an e-auction cannot be considered arbitrarily. Indian Hotels should be given six months to vacate the premises if it fails to retain the property in the auction, the court said.
In the last hearing, the NDMC had informed the court that it would not change its decision to auction the property. The NDMC had said it would go for an e-auction which will give the right of first refusal to Indian Hotels for all practical purposes.
The Taj Group had maintained that it was willing to pay the prevalent market price to renew the lease, but was not in favour of an open auction, arguing that it would artificially drive up the property’s price. The hotel chain also wanted the first right of refusal in case of an auction.
NDMC argued that an open auction was the best way forward, adding that the Taj Group could participate as well.