Himachal Chief Minister hails Supreme Court’s decision on Hotel Wildflower Hall
Shimla – In a significant development, the Supreme Court has upheld the order of the High Court of Himachal Pradesh, directing East India Hotels Limited (EIH) of the Oberoi Group to vacate the Wildflower Hall luxury hotel in Shimla. The apex court’s decision came on Tuesday, endorsing the High Court’s order issued approximately a month ago.
In its order, the High Court had mandated EIH to surrender possession of the five-star Hotel Wildflower Hall to the Himachal Pradesh Tourism Development Corporation (HPTDC) within a stipulated two-month timeframe. The legal battle traces back to a November 17, 2023, decision by the High Court, which ruled that Oberoi Group failed to comply with an arbitration award within the mandated three-month time frame. Consequently, the state government is deemed eligible to assume possession and management of the hotel. The case was heard by Judge Satyen Vaidya.
Wildflower Hall, a heritage property that once served as the residence of Lord Kitchener, a colonial-era commander-in-chief of the British Army, has been at the center of a prolonged dispute.
The dispute revolves around the renovation of the hotel, damaged by a fire in 1993. EIH, in collaboration with the Himachal Pradesh government, joined a global tender for its renovation. 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.
The contention arose when Mashobra Resort Limited failed to meet this obligation, resulting in a government-imposed fine of Rs 2 crore annually. In 2002, the government terminated the agreement, citing a “breach of terms,” a decision contested by EIH before the Company Law Board. The board ruled in favour of EIH, prompting the government to challenge the decision in the High Court.
An arbitrator appointed by the court in 2005 upheld the government’s decision to cancel the contract, granting them the right to reclaim the property. EIH filed a plea against the arbitrator’s award, but the high court dismissed it in October 2022, citing no merit in the appeal.
In November 2023, the high court allowed the state to take immediate possession of the hotel. However, a stay order was issued as EIH filed a petition seeking a review of the November 17 order.
In response to the Supreme Court’s decision, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu welcomed the verdict, stating that it safeguarded the interests of the state. He attributed the favourable outcome to the comprehensive representation by renowned lawyer Mukul Rohatgi, emphasizing the government’s commitment to protect Himachal Pradesh’s interests.
With the Oberoi Group ordered to vacate the prestigious property within a year, the state government will deliberate on the future course of action, ensuring a decision aligned with the best interests of Himachal Pradesh.
