Major relief has come for Delhi’s The LaLit hotel in the form of a Supreme Court order in its ongoing dispute with the New Delhi Municipal Corporation (NDMC).
The apex court has stayed any action by the NDMC after the government body cancelled the hotel’s licence agreement.
The court asked both sides to maintain status quo. It has also issued a notice to the NDMC regarding the termination of the licence.
In its order last month, the Delhi High Court had allowed the NDMC to charge a licence fee of more than Rs 1,000 crore from the hotel.
The High Court had held that the hotel was in “fundamental breach” of the conditions laid down in the 1982 licence deed executed with the NDMC.
The court had also allowed the civic body to cancel the licence and take over the hotel within 90 days of the order.
Bharat Hotels, the parent company of the hotel, had moved to the Supreme Court against the proposed action.
The Supreme Court directive has granted temporary relief to the hotel.
The land on which The LaLit hotel stands today was given to the NDMC by the central government in 1973. The 6-acre land, located on Barakhamba Lane in New Delhi, was handed over to Bharat Hotels in 1982 under a 99-year agreement to develop and operate a luxury hotel.
The agreement also included a clause for revision of licence fees after 33 years. Acting on this, the NDMC issued a notice in February 2020 and demanded Rs 1,063.74 crore based on a fresh valuation.
As the amount was not paid by the company, the NDMC terminated the licence and moved to take over the property.
This was challenged in court by the hotel company, but the ruling initially came in favour of the NDMC.
However, the Supreme Court’s directive to maintain status quo has come as a relief to the company and the hotel.
