More Stories

Informist, Wednesday, Sep 4, 2024

 

NEW DELHI – The Delhi High Court today stayed the Land and Development Office's demand of 1.11 bln rupees from ITC Ltd towards payment of ground rent for the period from Jun 26, 1999 to Jun 28, 2024. The case relates to six acres of land leased to the company at Sardar Patel Marg, Diplomatic Enclave, New Delhi.

 

ITC has also sought the court to direct the Land and Development Office to take appropriate action on its application for conversion of the land, in which ITC Maurya hotel is situated, from leasehold to freehold.

 

ITC has sought that the court quash the Land and Development Office's demand of 1.11 bln rupees. The high court today issued a notice to the Land and Development Office and placed the matter for hearing on Oct 22. 

 

In 1975, the president of India had executed an agreement in favour of ITC to grant it a licence for the six acres of land. Thereafter, the president executed a perpetual lease deed in favour of ITC in 1988, upon payment of annual rent of 1.3 mln rupees. 

 

In October, the petitioner filed an application with the Land and Development Office for conversion of the land's perpetual lease into freehold. It also made a payment of 296.2 mln rupees towards freehold conversion charges. However, in March, the Land and Development Office, through a letter, retrospectively demanded 1.11 bln rupees from ITC towards ground rent. The office asked ITC to deposit the amount within 30 days, failing which it would charge interest of 10% per annum on that amount.

 

After the petitioner disputed the demand and asked the office to provide the basis of revision and determination of ground rent, the latter provided it in April and called upon ITC for the payment. 

 

The petitioner said that according to a circular by the Land and Development Office, in cases where ground rent revision is undertaken after the lapse of many years, the enhanced ground rent should be limited to a specific multiple of the existing ground rent, depending on the number of years that have elapsed since revision has fallen due. In the case of the leasehold land for hotel ITC Maurya, a period of 25 years had elapsed, and according to the circular, the enhanced ground rent should have been capped at eight times the existing ground rent, which would be 10.50 mln rupees.

 

Further, the petitioner said that according to an office order by the Land and Development office, the revision of ground rent for premises where revision was due and not revised as on the date of receipt of conversion application, could be carried out to a maximum extent of five times the original ground rent, with effect from the date on which the revision has been due. The petitioner said the revised ground rent calculated by the office in terms of the order ought to have been capped at five times the existing (pre-revision) ground rent, which would be 6.5 mln rupees.

 

Today, shares of ITC Ltd ended 0.6% lower at 506.35 rupees on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.