Delhi's Taj Mansingh hotel will be auctioned soon and Tata-owned Indian Hotels, which has been running the renowned property for last 35 years, may not get the first right of refusal in the bid.
The Home Ministry will soon give a direction to the New Delhi Municipal Council (NDMC), which owns the property located in the heart of the national capital on Mansingh road, to do the needful for its immediate auctioning.
Last fortnight, the Ministry had issued a show-cause notice to the NDMC asking it to clarify why the municipal body has been delaying the auction for the past two years.
"So far, the NDMC has not sent any reply, implying that it has nothing to say. So, we will soon give a directive to the NDMC to start the process of conducting the auctioning immediately," a senior Home Ministry official said.
Home Ministry is the administrative authority of NDMC.
The property, constructed by NDMC, was given to Indian Hotels Company Limited on lease for 33 years. When the lease came to an end in 2011 and NDMC was about to renew the lease, the Urban Development Ministry intervened and asked it to auction the property.
As time was running out, the NDMC gave a year's extension to IHCL. While the company expected the lease to be renewed in October 2012, the process was stalled temporarily as NDMC could not take a final call. The property's lease was again extended.
After the NDMC had decided to auction the property, the IHCL approached the Delhi High Court seeking a stay on the process. Though the Tata group company had not got a stay order from the court, it did get an assurance that if NDMC takes steps for vacating the premises, the company could take legal recourse.
When the Home Ministry asked the NDMC not to give IHCL the first right of refusal while auctioning the property, the civic body went to the Solicitor General to seek opinion on it, an action which annoyed the Ministry.
"In the auction, the IHCL may not get the first right of refusal as that will result in a lower bid in the auction," the Home Ministry official said.
Though the land belongs to NDMC, the Tata group company has invested a lot in the hotel building. Therefore, the company has objected to being treated as just another licensee that can be replaced at the end of a term.