Iconic hotels in trouble: Taj Mahal gets eviction notice too

Looks like there is no end to the legal worries for Tatas' iconic Taj hotels.

While the lease for both Indian Hotels Company-owned Taj Palace and Taj Mansingh in New Delhi are set to expire this year, a report in the Business Standardtoday said even the Taj Mahal Palace Hotel in Mumbai has received an eviction notice from the Mumbai Port Trust because the hotel committed breaches of lease terms.

The land near Gateway of India is owned by the Mumbai Port Trust. Taj Hotel pays the trust a monthly rent.

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According to the report, even though Taj Mahal's 99-year lease ended in 2001-02, Mumbai Port sent an eviction notice on March 12, 2012. While IHCL has filed a suit in the Bombay High Court seeking lease renewal, the trust has filed another affidavit become the hotel committed "breaches of lease terms, such as unauthorised construction, change of land usage agreements and rental arrears."

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"The port trust indicated "its intention to initiate proceedings for eviction and recovery of arrears under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, if IHCL failed to hand over the premises within six months of notice period".

Meanwhile, the Delhi Development Authority has still not taken a decision on whether it will auction the Taj Palace Hotel or renew its lease which expires in March 2013 even though Taj Palace has paid the principal amount that was due to DDA.

The Taj Mahal Hotel remains with the Tatas till October 2013. The New Delhi Municipal Council has already decided to conduct an open auction. The Taj Group will get the first right of refusal, but will have to match the highest bidder. NDMC will continue to get the current 17.25 percent share from revenue or around Rs 29 crore per year from the hotel.