Top News

New Delhi: In a huge setback to Bharat Hotels Limited, the Delhi High Court on Thursday ruled in favour of the New Delhi Municipal Council (NDMC), validating the termination of the licence for The Lalit hotel in Barakhamba Road, New Delhi, due to breach of a 1982 licence deed.

The court's ruling revived NDMC's ₹1,063.74 crore dues demand and ordered possession of the hotel to be handed over to the civic body within 90 days, causing severe financial, operational, and structural distress to the Suri group, which owns the five-star hotel.

The dispute relates to a prime 6.45 acre land parcel in central Delhi, which was given to the Suri group in 1982 on a licence basis for a period of 99 years at an annual license fee of Rs 1.45 crores for 33 years, with a cap of 100% increase for every 33 years thereafter.

Bharat Hotels constructed The Lalit hotel and the World Trade Centre complex on this land in the 1980s. NDMC later learnt that shops in the World Trade Centre were subsequently sold clandestinely and in violation of the terms of licence deed.

The dispute over the licence has roots in a long and shifting political history. The land was first allotted to the Suri Group around 1976 by a Congress-led government, only to be cancelled in 1977 when the Janata Party came to power. In 1981, after the Congress returned, the same parcel was re-allotted to Lalit Suri on a licence basis. The agreement allowed the construction of a five-star hotel and the World Trade Centre complex, with no provision for profit sharing, and fixed licence fees for 33 years.

From 2014 onwards, the licence fee was revised only marginally to about ₹2.90 crore per year, far below what the market value of the land that NDMC was entitled to receive. NDMC estimated the land’s worth at nearly ₹98 crore annually, based on an SBI Caps valuation, which Bharat Hotels disputed. The gap raised concerns, as Bharat Hotels was insisting on paying NDMC less than Rs. 25 lakhs per month for over 6 acres of land, even while the civic body's own dues to the Land and Development Office were significantly higher.

On February 13, 2020, NDMC issued a demand notice of over ₹1,063 crore, calculating arrears at ₹98 crore per year from March 11, 2014, along with interest and other charges. The licence was also terminated the same day. Bharat Hotels challenged both actions in the Delhi High Court, where a Single Judge bench led by Justice Yashwant Verma set aside the notices in December 2023.

However, the NDMC challenged this judgment before a Division Bench of the Delhi High Court.

In a huge win for NDMC, which was represented by Senior Advocate Malvika Trivedi, the Delhi High Court today (Thursday) upheld both the demand notice and the licence termination notice issued by civic body. Bharat Hotels will be now be required to hand over the possession of The Lalit hotel and the World Trade Centre complex to NDMC.