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IN THE HIGH COURT OF DELHI AT NEW DELHI

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CS(OS) 651/2013, IAs 9691/2015, 15819/2015 & 1530/2016

THE INDIAN HOTELS COMPANY LTD

..... Plaintiff

Through:

Mr. Rajiv Nayar, Sr. Adv.

with Mr. Rishi Agrawala, Mr.

Karan Luthra, Ms. Niyati

Kohli & Mr. Saurabh Seth,

Advs.

versus

NEW DELHI MUNICIPAL COUNCIL

..... Defendant

Through:

Mr. Sanjay Jain, ASG with

Mr. Akshay Makhija, CGSC,

Mr. Siddharth Thakur, Mr.

Vidur Mohan, Ms. Bani

Dixit, Ms. Rhea Verma &

Ms. Mahima Bahl, Advs.

CORAM:

HON'BLE MR. JUSTICE V.KAMESWAR RAO

V.KAMESWAR RAO, J.

1. This is a suit filed by the Indian Hotels Company Ltd., plaintiff

with the following prayers:-

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circumstances of the case.‖

2. The case, as set up by the plaintiff in the plaint is, that the areas in

what is popularly known as „Lutyens‟, Delhi are governed by the special

local authority which was formerly known as New Delhi Municipal

Committee constituted under the provisions of Punjab Municipal Act,

1911, these areas including various lands owned by the Government of

India. One of the plot, which is the subject-matter of the suit is plot

known as Plot No.1, Mansingh Road, New Delhi admeasuring 3.78 acres

(1,61,706 sq. feet). It is averred that vide allotment letter dated July 13,

1976 (Exh.P-1) issued by the Government of India, L&DO (Land and

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Development Office) addressed to the New Delhi Municipal Committee,

the said plot was allotted for setting up of a Hotel. It is the case of the

plaintiff that it was given to understand, no formal agreement or lease

has been executed by Government of India in favour of the defendant.

However, the defendant holds this land on the basis of the aforesaid

allotment as a perpetual lessee.

3. In 1978, a conference of Pacific Asia Travel Association

(“PATA”) was proposed to be held. It is in order to facilitate the stay of

the delegates and visitors of the PATA conference, the defendant desired

to set up a five star hotel in New Delhi. However, since the defendant

did not have the expertise of setting up or running a five star hotel, it was

agreed that collaboration should be entered into with some expert of

repute in the field. It is averred in the plaint, that the plaintiff had also

applied for allotment of land for setting up a five star hotel in New Delhi

and the Govt. of India had identified the said plot for that purpose. On

March 3, 1976, the plaintiff addressed a letter to the defendant and

offered to equip a hotel of about 300 rooms of acceptable international

standards on the said plot. It is also averred that on March 31, 1976, a

further letter (Annexure to Exh.P-40) was addressed by the plaintiff to

the defendant proposing to construct a hotel on the subject plot. It was

suggested that, at that stage the cost of the hotel building, excluding the

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cost of the land be borne by defendant, which will be around Rs.425

lakhs. The plaintiff would bear the costs of all other items such as

equipment of kitchen, furniture and furnishing in detail, landscaping,

operating, supplies etc and thereafter, there would be a revenue sharing

arrangement.

4. According to the plaintiff, it was in this background, an

Agreement called Collaboration Agreement for hotel building at 1,

Mansingh Road, New Delhi was executed by the plaintiff and the

defendant on December 18, 1976 (Exh.P-40). The Collaboration

Agreement recited the circumstances, in which the same was being

executed; viz so as to make the guests accommodation ready for PATA

conference sometime in 1978. According to the plaintiff, the

Collaboration Agreement broadly provided and recorded the following:-

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(xii) Clause VIII of Article III provided for NDMC‘s rights and powers;

5. It is averred that on the same day, on December 18, 1976, another

document titled “Licence Deed”(Exh.P-41) of a hotel building between

plaintiff and the de