SHIMLA: In a major setback to East India Hotels (EIH) of Oberoi group, the Himachal Pradesh High Court on Friday ordered it to handover the possession of Hotel Wildflower Hall to Himachal Pradesh Tourism Development Corporation within two months.
The order paved the way for the hotel’s possession by the HPTDC by rejecting the review petition filed by EIH group against the court order passed on November 17, 2023.
A single bench of the high court consisting of Justice Satyen Vaidya had passed the order of “warrant of possession” filed by the HPTDC on December 15, 2023.
After the November 17 order, the government hastened to take over the possession of the Hotel but EIH got a stay from the high court which asked the government to maintain status quo till the next hearing.
Hotel Wildflower Hall, once the residence of Lord Kitchener, the former Commander of the British Army, was gutted in a fire on April 5, 1993, and later handed over to the EIH for running as joint venture, ‘Mashobra Resorts Limited’.
A agreement was signed between the state government and EIH on October 30, 1995, to incorporate a joint venture company — Mashobra Resorts Limited — for constructing and operating the hotel with the condition that the state government’s share in the company would be not less than 35 per cent and the EIH’s not less than 36 per cent.
Shares of the firm were also reserved for a public issue.
With problems cropping up frequently, the state government on March 6, 2002, issued an order terminating the agreement on grounds of “breach of terms.”
The Himachal Pradesh government on December 21 last year told the high court that it wanted to resume the Wildflower Hall, presently in possession of East India Hotels of the Oberoi group.
Retired Supreme Court judge RP Sethi, who was appointed as the sole arbitrator in the dispute, found that the joint venture agreement was legally valid and binding on all parties and recorded that the relationship between the disputing parties was “damaged beyond repair and parting of ways was the only solution.”
The EIH had filed a plea against the award of the arbitrator but its plea was dismissed by the high court in October 2022, with the observation there was no merit in the appeal.
The responsibility for construction and operation of the hotel was entrusted to the EIH and the state government was entitled to terminate the JVA if commercial operation of the hotel did not start within four years of handing over possession of the land.
