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Informist, Wednesday, May 20, 2026

 

--SC notice to civic body against termination of Bharat Hotels' licence deed 

--CONTEXT: Bharat Hotels' licence on land where The LaLit hotel is situated 

--CONTEXT: Civic body asked Bharat Hotels to pay INR 10.64 bln licence fee 

--SC: Status quo on civic body's termination of Bharat Hotels licence deed 

 

NEW DELHI – The Supreme Court Wednesday ordered a status quo on New Delhi Municipal Council's decision to terminate the licence agreement with Bharat Hotels Ltd. and hand over the land where The LaLit hotel is situated to the civic body. The top court issued a notice to New Delhi Municipal Council on Bharat Hotels's plea against termination of licence deed and civic body's order seeking INR 10.64 billion as the licence fee for the period from March 2014. The top court said that Bharat Hotels will have to pay the licence fee according to the licence agreement among the parties.

 

The bench of Justice B.V. Nagarathna and Justice Ujjal Bhuyan said that The LaLit hotel's building is situated on the land where the termination of licence deed is sought and existing business is going on there with hundreds of workers being employed there. If the civic body is short of funds, then take it from somewhere else, the bench observed. 

 

On Apr. 22, the high court had upheld the civic body's termination of the licence deed and its order on licence fee. The high court said that Bharat Hotels has rightly been found to be in fundamental breach of the clauses of the licence deed signed between the parties in 1982 and, therefore, the licence has been terminated by the civic body. Land in New Delhi is one of the scarcest natural resources and if any transaction in respect of such land results in huge losses to the New Delhi Municipal Council, the burden is transferred to the taxpayers, who are the residents of New Delhi, the high court had said.

  

In 1982, the New Delhi Municipal Council had signed a licence deed with Bharat Hotels for the construction and commissioning of a five-star hotel and two commercial towers. The licence fee of INR 14.50 million per annum was to be paid by Bharat Hotels to the civic body. The licence period was 99 years, starting 1981.

 

The New Delhi Municipal Council later increased the licence fee to INR 980 million per annum for the remainder of the licence term from Mar. 11, 2014, based on a report by SBI Capital Markets Ltd. The New Delhi Municipal Council issued a demand notice to Bharat Hotels to pay INR 10.64 billion, which comprised arrears of licence fee at the enhanced rate, along with interest, and arrears of outstanding licence fee with interest. 

 

The New Delhi Municipal Council had said that the nominees of the sub-licensee of Bharat Hotels had executed four documents in 2016 in favour of the Indian Wind Power Association for shop and office spaces, which were agreements of sale, purchase, and transfer. This was in clear breach of the clause of the licence deed between the parties, the New Delhi Municipal Council said. Bharat Hotels was aware of this sale, purchase, and transfer agreement, it said. In terms of the licence agreement, Bharat Hotels had only been granted the right to create a sub-licence with the prior consent of the municipal council, and it could not, in any case, have sold or transferred the subject property, the New Delhi Municipal Council said.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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