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Tatas file injunction suit in Delhi High Court ahead of Taj Mahal Hotel auction


NEW DELHI: Indian Hotels CompanyBSE -0.90 % Limited, which operates the Taj hotel chain, has filed an injunction suit in theDelhi High Court just ahead of the auction of the Taj Mahal Hotel in central Delhi by the New Delhi Municipal Council.

"Indian Hotels Company Limited on behalf of Taj Mahal Hotel Delhi, has filed an injunction suit in the High Court in order to protect its position," said a Taj spokesperson, in a statement today.

The council is to meet on April 10 to discuss and finalise the terms of the request for proposal after which the tendering process will be initiated for the auction. The civic body had earlier said that Taj will have the right to match the highest bidder.

A senior official at NDMC said they have not received any intimation of the injunction by the Tata's yet.

Taj' lease with NDMC for the hotel ended October 2011 after which NDMC decided to extend the lease with the same operator for one more year. During this period, the civic body was to decide on the way forward. It appointed E&Y to determine the valuation of the property and explore other options such as finding another partner or even auctioning the landmark hotel.

E&Y in its report last September suggested auctioning the property, with the first right of refusal resting with Taj.

Tata's have been keen on retaining the property from which it gets close to Rs 150 crore annually in revenues.

The spokesperson for Taj did no elaborate on the injunction suit that has been filed. "As the matter is now subjudice, we are not in a position to comment on this any further. We would like to reassure our guests, employees and business partners that we are committed to delivering the highest quality of service at all times and it is business as usual," said the statement.

IHCL is faced with a tough challenge with two of its marquee properties, in Mumbai and Delhi, the original leases for which have expired in recent years. The 99-year lease for Taj Mahal Palace in Mumbai, which stands on land owned by the Mumbai Port Trust (MPT), ended in 2001-02 while that of the Taj Mansingh hotel in Delhi with the New Delhi Municipal Council (NDMC) had ended in October 2011.

The Mumbai Port Trust had slapped an eviction notice on the property in March last year after which IHCL filed a suit in the Bombay High Court to get the lease renewed. MPT too had filed its counter argument through an affidavit in the court.

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