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New Delhi: Indian Hotels Company Ltd (IHCL), which operates the Taj Mahal and The Connaught hotels in the national capital, on Thursday moved the Delhi High Court for exemption from paying Rs 46.2 crore in license fees to the New Delhi Municipal Council (NDMC) for the 2020-22 fiscal years, claiming force majeure.
NDMC owns both hotels and IHCL operates them. The Tata Group company said because of Covid-19 and prolonged pollution-related restrictions in Delhi during 2020 to 2022, it could not operate the hotels.
While seeking response from the civic body, Justice Subramonium Prasad suggested the parties try to explore the possibility of settling their disputes through mediation. The case will be heard next on April 23.
IHCL filed two petitions against NDMC seeking a declaration that under the force majeure condition, the company was excused from the obligation to pay Rs 38.35 crore in licence fees for the Taj Mahal hotel. It also sought exemption from paying Rs 7.84 crore for the Connaught-IHCL SeleQtions.
NDMC counsel Saurabh Seth opposed the petitions. The payment for March 2020 was due in April 2020, and the cause of action arose in April 2020, he said, indicating the delay by the company in raising the matter.
The hotels did not operate when there were restrictions on movement of people during Covid, IHCL said. Even when they reopened, normal operations and revenue were severely impacted due to several restrictions, it claimed.
Senior counsel Saurabh Kirpal and Gautam Narayan, on behalf of IHCL, argued that between 2020 and 2022, its turnover declined by over 95%. Yet, it continued to pay full employee salaries, they said.
Besides, community outreach expenses by way of medical facilities, food and consumables distributed across the country was more than Rs 75 crore during this period, the company said. However, despite acknowledging the pandemic to be a force majeure event, the civic body took the stand that IHCL did not make enough efforts to earn from the hotels during the pandemic and thereby mitigate losses and damage, the company claimed.
NDMC owns both hotels and IHCL operates them. The Tata Group company said because of Covid-19 and prolonged pollution-related restrictions in Delhi during 2020 to 2022, it could not operate the hotels.
While seeking response from the civic body, Justice Subramonium Prasad suggested the parties try to explore the possibility of settling their disputes through mediation. The case will be heard next on April 23.
IHCL filed two petitions against NDMC seeking a declaration that under the force majeure condition, the company was excused from the obligation to pay Rs 38.35 crore in licence fees for the Taj Mahal hotel. It also sought exemption from paying Rs 7.84 crore for the Connaught-IHCL SeleQtions.
NDMC counsel Saurabh Seth opposed the petitions. The payment for March 2020 was due in April 2020, and the cause of action arose in April 2020, he said, indicating the delay by the company in raising the matter.
The hotels did not operate when there were restrictions on movement of people during Covid, IHCL said. Even when they reopened, normal operations and revenue were severely impacted due to several restrictions, it claimed.
Senior counsel Saurabh Kirpal and Gautam Narayan, on behalf of IHCL, argued that between 2020 and 2022, its turnover declined by over 95%. Yet, it continued to pay full employee salaries, they said.
Besides, community outreach expenses by way of medical facilities, food and consumables distributed across the country was more than Rs 75 crore during this period, the company said. However, despite acknowledging the pandemic to be a force majeure event, the civic body took the stand that IHCL did not make enough efforts to earn from the hotels during the pandemic and thereby mitigate losses and damage, the company claimed.
