Court Rejects EIH’s Review Petition, Clears the Way for Possession Transfer
Shimla – In a significant development, the Himachal Pradesh High Court has mandated East India Hotels (EIH) of the Oberoi Group to surrender possession of the renowned five-star Hotel Wildflower Hall to the Himachal Pradesh Tourism Development Corporation (HPTDC) within two months. The court’s order, issued on Friday, comes after the rejection of EIH’s review petition against the initial decision made on November 17, 2023.
The single Bench, presided over by Justice Satyen Vaidya, issued a “warrant of possession” in favour of HPTDC on December 15, 2023. Following the November order, the government sought to take over the hotel’s possession promptly. However, EIH obtained a stay from the high court, maintaining the status quo until the subsequent hearing.
The court’s decision, delivered on Friday, instructs the Oberoi Group to hand over the Hotel Wildflower Hall to the state government within two months. A comprehensive report on the case is expected on March 15, 2024. Additionally, the court has directed both parties to engage a reputable Chartered Accountant (CA) to address financial matters.
The High Court ruled that Oberoi Group failed to comply with the arbitration award within the stipulated three-month time frame. Consequently, the state government is deemed eligible to assume possession and management of the hotel. The case was heard in the court of Judge Satyen Vaidya.
The dispute revolves around the redevelopment of the Wild Flower Hall Hotel, which suffered a fire in 1993. East India Hotels Limited participated in the global tender for its redevelopment in partnership with the Himachal Pradesh government. A joint venture company, Mashobra Resort Limited, was established under the agreement, with the company obligated to build a five-star hotel within four years.
However, the company failed to meet this obligation, leading to a fine of Rs 2 crore annually imposed by the government. In 2002, the government terminated the agreement due to a “breach of terms,” a decision contested by the company before the Company Law Board. The board ruled in favor of the company, prompting the government to challenge the decision in the High Court.
The court appointed an arbitrator who, in 2005, upheld the government’s decision to cancel the contract, granting the government the right to reclaim the property. Despite subsequent legal challenges from EIH, the High Court affirmed the arbitrator’s decision in October 2022.
The Hotel Wildflower Hall, handed over to EIH after the fire, has been a subject of legal battles for years. The recent court order marks a significant turn in the case, signalling the imminent transfer of possession from Oberoi Group to the Himachal Pradesh Tourism Development Corporation.
