The Taj Mansingh Hotel, renamed as The Taj Mahal Hotel recently, was the second hotel to be opened by Indian Hotel Company Limited in 1978 after the iconic Taj Mahal Mumbai in 1903.
Picture courtesy: Taj Hotels
History of the Taj Mansingh
In mid-70s India’s capital city, Delhi only had two luxury five-star hotels: The Oberoi Intercontinental and the second one being The Ashoka in Chanakyapuri. The Taj Group, which then operated the Taj Mahal hotel in Bombay was looking at expanding the hotel chain. In order to be a truly national chain, it would be imperative to have a property in the national capital of India.
Back then on 1 Mansingh Road there stood a 32 room hotel called Fonseca’s. The property belonged to Nawab who had to move to Pakistan during the 1947 partition and he gave the property on lease to his friend in Delhi before he left from India. When IHCL bought the lease to this property in perpetuity to raise down Fonseca’s and build a new Taj hotel, the municipal officials tried seizing the property as an illegal structure.
Finally, peace was made between IHCL and the municipality on terms that IHCL would construct the hotel and operate it without claiming the ownership to the plot of land. In return, they would say that IHCL had leased the plot from them and get paid a certain percentage of the annual turnover. Now while Indian Hotels wanted a lease for 100 years at that time the norm on property lease was not more than 33 years. Thus IHCL signed off the papers on probably an understanding that they will be able to renew the lease after 33 years in 2010.
Picture courtesy: Taj Hotels
An auction will be held in November 2017
The Taj managed to get a number of extensions on the lease, however, two years ago it was decided to auction the property. While the Tatas said that there was no need to go for an auction and IHCL was willing to give the best revenue share possible for the prime Delhi property, the Indian Supreme Court has given a go-ahead to NDMC to proceed with the auction.
The e-auction is expected to begin sometime in November, and Tatas and its subsidiary companies can participate in the bid. Just in case the Tatas does not win this bid the group will get another six months period to vacate the premises. The new owner gets up to end of 2019 to dress up the place and has to open it in 2020.
Presidential Suite Picture Courtesy: Taj Hotels
While last year IHCL sold off the Taj Boston for 839 crores as a part of their divestment strategy, the group is in no mood to let go of the iconic Taj Mansingh. As for me, that building will always remain as Taj and I will be sad to see the brand name go off.
As a former employee, all I can say is that this whole situation reeks of the poor leadership seen at a Corporate level for years.
AB Kerkar did what he had to at a time when funding wasnt available to expand the group, leading to situations like this. However, that is no reason for this situation to continue post the early 90s when funding was widely available.