Hotel's licence deed was terminated in 1995

New Delhi: For two decades, Prominent Hotels Ltd rode a gravy train, using litigation to avoid paying New Delhi Municipal Council the licence fee for the hotel it ran even as the dues climbed up to around Rs 150 crore. The murder of NDMC estate officer MM Khan, who was to pass the eviction order shortly, has brought the company's joyride to a halt.
It all began in 1995, when the licence deed of The Connaught, owned by Prominent Hotels, was terminated. "NDMC had given Prominent land in 1981 to run a hostel, but it converted the hostel into a tourist lodge and then a luxury hotel. That is why we cancelled their licence deed," said an NDMC official.
When an interim court order went in its favour in 1995, Prominent hit upon the idea of filing a series of litigations to delay the eviction.
Finally, in September last year - by which time the accumulated licence fee dues had reached Rs 142 crore - Delhi high court termed Prominent's legal pleas "frivolous" and fined it Rs 5 lakh for misleading the courts. The court also authorised NDMC to start the process for eviction and recovery of pending dues.
"In 1995 itself, we had sent Prominent show-cause notices on why its health licence should not be withdrawn and water and electricity connections disconnected, but we could carry out the action only in February last year after which we sealed the premises," said an advocate working on NDMC's case. It was desealed when the hotel filed a writ petition for an opportunity to retrieve its belongings from the premises. "Now we have to seek permission to seal it again," said the advocate.
In 1981, NDMC signed a contract allotting a plot at 37 Shaheed Bhagat Singh Marg in central Delhi to Prominent to construct a youth hostel in the run-up to the 1982 Asian Games. To be a leased property for 99 years, the civic body was to get the higher of Rs 21,08,040 or 23 per cent of the gross turnover every year as licence fee. By 1987, however, the owners had succeeded in erecting a four-star luxury hotel on the site.
After last September's court judgment, Khan was installed as the estate officer, a quasi-judicial, LG-appointed post. "Under the Public Premises (Eviction of Unauthorised Occupants) Act, the estate officer initiates the eviction process," explained NDMC sources. "But there are allegations that Khan was being pressured to stall the eviction by the licensee." Perhaps due to these hurdles Khan did not decide on the case in the normal six-month period and the licence had been extended for three months.
The officer had reserved his final order for May 17, too close for comfort for Prominent's owner, who had him bumped off.