New Delhi: The Delhi High Court on Tuesday asked NDMC to respond to Tata Group's plea seeking to restrain the land-owning agency from auctioning the property on which Taj Mansingh Hotel is located here.
Issuing notice to civic body New Delhi Municipal Council (NDMC), Justice M L Mehta sought its response within two weeks and said it will consider Tata's plea seeking an interim stay on the auction on the next date of hearing.
Justice Mehta, however, granted liberty to Indian Hotels Company (IHC), which manages the property, to approach the court if any coercive steps are taken against it by the NDMC.
"Issue notice to NDMC and reply to be filed within two weeks. If there is any threat of coercive step against it, the plaintiff (IHC) is at liberty to approach the court," Justice Mehta said.
Appearing for NDMC, senior advocate V P Singh accepted notice on behalf of the land-owning agency and sought two weeks time to file the reply to the company's plea.
Referring to a Supreme Court ruling in Chanakya Cinema case and the NDMC Act, the senior counsel submitted that the land has to be put up for auction after the lease period is over.
Countering his argument, senior advocate N K Kaul, appearing for IHC, submitted that as per the contract between the parties, the extension of lease has to take place on the basis of their mutual understanding.
He also argued that the lease of the land has been with IHC for more than 33 years and the company has built a permanent structure there and has also spent a huge amount of money on development of infrastructure in the area and thus it has a right to seek an extension of lease.
After hearing the submissions of the parties, the court posted the matter for further hearing in July.
The 33-year lease of IHC ended in October 2011 and was extended by a year by revising the revenue-share licence fee.
In September 2012, NDMC had once again granted IHC a one-year extension which will end in November this year.
In its plea, IHC has submitted that it manages the property on which the hotel stands and pays a revenue-share fee to the NDMC, which owns the land.
The hotel management company, in its plea, has also claimed that the agreement with NDMC was a joint venture and in view of the long-term relationship between them, the matter should be reconsidered.
NDMC is scheduled to hold a meeting on April 10 to decide on the request for proposal for auctioning the property at Mansingh Road.