The state government is set to pursue a claim of Rs. 400 crore on the five-star property, Wild Flower Hall, located in Mashobra. This claim arises from compound interest on an initial amount of Rs. 12 crores, dating back 18 years. However, there are concerns that this move could reignite a legal battle surrounding the property. In a recent cabinet meeting held on June 19, Sukhwinder Singh Sukhu’s cabinet made the decision to implement a 2005 arbitration award, raising the stakes for the company operating Wild Flower Hall, East India Hotels.
East India Hotels had previously contested the arbitration award through legal channels, but after losing the case in the High Court, they appealed to the state government last year to honour the arbitration award. The previous Jairam government was unable to make a decision on the matter due to the intervening elections. The current government has now chosen to invoke the arbitration clause, which favours the state government.
The arbitration ruling called for the cancellation of the sale deed between the Government of Himachal Pradesh and East India Hotels. Additionally, the order stipulated a 40-year lease of the land, spanning over 100 hectares, to the company. As per the 2005 arbitration award, the state government was entitled to receive Rs. 12 crores. Furthermore, the award mandated the regularization of 57 unauthorized rooms at Wild Flower Hall, with a compounding fee of five lakh rupees specified. However, these rooms have yet to be regularized or registered, rendering them operating illegally.
The historic Wild Flower Hall was established in 1902 during the British rule and was later entrusted to tourism authorities for management. A fire incident in 1993 prompted the state government to lease the property to East India Hotels through a global tender process. A joint venture was formed with Mashobra Resorts Limited and the Himachal Government, although the state government alleges that Mashobra Resorts Limited diluted the equity of the Himachal government in the venture. Currently, the board consists of the Chief Secretary as the chairman, along with members from the tourism and finance departments. The presence of a four-member company on the board has led to concerns regarding the decision-making process.
As the state government seeks to assert its claim on Wild Flower Hall, potential legal hurdles loom large. The implementation of the arbitration award and the pursuit of substantial compensation could ignite a fresh legal battle between the government and East India Hotels. The fate of this iconic property hangs in the balance as both parties brace for the possibility of protracted legal proceedings.
