New Delhi, May 22: The Delhi High Court today dismissed a plea by Tata Group-owned Indian Hotels Company Ltd (IHCL), challenging the tender procedure for the proposed auction of Delhi’s Taj Mahal Hotel by the NDMC, saying the eligibility conditions put in by the civic body are based on “thought and deliberation”.
A bench of Justices S Ravindra Bhat and A K Chawla said it was of the opinion that the writ petition by the IHCL has to fail.
The IHCL had sought a direction to quash the tender issued by the New Delhi Municipal Council (NDMC) on April 25, inviting bids for grant of leave and license of the hotel property situated at No.1, Mansingh Road here.
It alleged that an essential condition with respect to its unblemished track record has not been properly factored into the eligibility conditions and it was in contravention of the April 20, last year order of the Supreme Court.
The apex court had on April 20 last year allowed the civic agency to e-auction the iconic five-star hotel Taj Mansingh, currently being run by Tata Group firm IHCL, in the heart of the national capital.
The high court had reserved its order on May 3 after hearing arguments of the counsel for the IHCL and NDMC which had claimed that it had not prejudiced the Tatas in any way.
The bench in its today’s verdict relied on various judgements of the Supreme Court and said, “If the above judicially settled parameters are kept in mind, it is apparent that the complex nature of eligibility conditions that NDMC has insisted upon, while considering tenders for the hotel plot, are based on thought and deliberation.”
“The realm of re-appreciation through judicial review is consequently extremely narrow. To accept the petitioners’ arguments would be to prefer what in the court’s opinion would be (according to its subjective preference) a better criterion or criteria and an improvement over the existing ones.
“To apply that as the benchmark to judge the prescribed or existing criteria, would be to stray from the permissible margin of appreciation and impose a policy choice, which is what the Supreme Court has repeatedly cautioned against,” it said.
The bench said as it has been held by the apex court, time and again, the wisdom of a particular policy cannot be considered, but its legality or procedural fairness is only subject to review.
It said that if these factors are kept in mind, the fact that some conditions could have been better phrased, or that some more conditions could have been introduced is not sufficient to conclude that the conditions that have been prescribed are arbitrary and unreasonable.
Regarding the issue that whether NDMC has accurately reflected the requirement spelt out by the Supreme Court in its final order, that the ‘unblemished track record of the petitioner – Hotel as well as its capability’ should be taken note of, the high court said the concern at the back of the apex court’s mind apparently was that “the bidder should be able to provide services commensurate to that of Indian Hotels, in terms of its track record as well as its capability”.
The Tatas had moved the division bench of the high court against the September 5, 2016 judgement of a single judge who had not acceded to the firm’s request for renewal of licence for a further period, saying it was not entitled for the extension.
The IHCL had submitted in the court that the NDMC has failed to consider last year’s order of the Supreme Court that they had an unblemished track record.
The property, owned by the NDMC, was given to the IHCL on a lease of 33 years. The lease had ended in 2011 and the company was given nine temporary extensions since then on various grounds, with three of them granted last year itself.
The NDMC had announced the e-auction of its premium hotels in Lutyen’s Delhi Taj Mansingh, The Connaught and Hotel Asian International for a lease period of 33 years.
The IHCL had in its plea also questioned the revenue sharing model in the tender document prepared by NDMC and argued that the civic agency stood to lose money if the auction went through.
Senior advocate Sanjay Jain, appearing for NDMC, had said they have considered the track record of IHCL and that is why they have not put any condition on them, whereas several conditions were imposed in case of the other bidders.
He had said the bid conditions contained provisions for a minimum guaranteed sum payable and making only those entities, which have a turnover of at least Rs 200 crore, eligible for the bidding.
Jain had said it was the NDMC’s prerogative to decide the tender conditions and it was not discriminating against anyone.
The top court had earlier allowed the plea of NDMC that the Tata Group firm cannot have the right to refusal in the auctioning of the hotel. The bench, however, had asked the civic body to grant six months’ “breathing time” to the company to vacate the hotel in case they lose out in the e-auction.
The court had also said that the “blemish-free” record of Tata Group firm IHCL may be taken into account by NDMC while auctioning the iconic property.
IHCL had on November 8, 2016, approached the apex court against the Delhi High Court’s order that had cleared the decks for auctioning of the iconic property.
PTI
