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HC clears decks for Taj Mansingh auction

Delhi high court on Monday gave the nod for a public auction of luxury hotel Taj Mansingh ruling in favour of New Delhi Municipal Council.

Justice V K Rao dismissed the plea by the current operator, Tata group's The Indian Hotel's Company (IHCL), to renew the licence and upheld NDMC's decision to go for auction. After Hotel Connaught and Le Meridien, this is the third recent case where NDMC has won against luxury hotels in Lutyens' Delhi zone. Each hotel was mired in dispute with the council on licence-related issues.

The HC held that collaboration between NDMC and IHC for the hotel was not a joint venture, as claimed by the company. "There are no elements seen in the three agreements which show that there is a partnership between the parties.

There is also no stipulation for sharing the profit and losses," the court noted. IHCL had pointed out to the HC that it had completed construction of the hotel building, consisting of approximately 300 rooms, with all other allied facilities and started the commercial operation of the hotel with effect from October 10, 1978. The agreement period of 33 years is reckoned from the said date. At that point of time, the plaintiff incurred an expenditure to the tune of Rs 461.61 lakh.

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