In major relief to Calcutta-based ITC, which runs a luxury five-star hotel in the heart of New Delhi, the Delhi High Court on Wednesday stayed a ₹111-crore ground rent demand by the Land and Development Office (L&DO) for the past 25 years for six acres of land leased to the conglomerate in 1975.
ITC Maurya hotel is situated on this land at Sardar Patel Marg, Diplomatic Enclave, New Delhi.
Justice Sanjeev Narula, while issuing notice to the L&DO of the Urban Development Ministry, also stayed the two demand notices of March 14 and April 22 asking ITC to pay ground rent of ₹111.06 crore. The matter has been kept for further hearing on October 22.
ITC has also sought a direction to the L&DO to take appropriate action on its October application for conversion of the land from leasehold to freehold in accordance with the prevailing 2003 policy.
While ITC was granted licence for the six acre of land in 1975, a perpetual lease deed in its favour was granted in 1988 upon payment of annual rent of ₹13.13 lakh.
Aggrieved by “such brazen conduct from the L&DO officials,” senior counsel Anil Kher, appearing for ITC, told the HC that the office was “arbitrarily and unreasonably” seeking to revise the ground rent retrospectively contrary to its own circulars/office orders.
Besides, L&DO was keeping the ITC’s application for conversion of leasehold land tenure to freehold pending while the former was “purportedly reviewing and finalising its conversion policies (thereby reneging on its published policies without notifying the applicants and the general public), the petition stated, adding the hotel company had already paid freehold conversion charges of ₹29.62 crore.
However, the L&DO, through a March letter, had retrospectively demanded ₹111 crore towards ground rent and given 30 days to deposit it, failing which it would charge interest of 10% per annum on that amount.
