The Delhi High Court has allowed intra-court appeals filed by the New Delhi Municipal Council (NDMC), setting aside a Single Judge’s decision that had quashed a ₹1,063 crore demand and termination of a long-standing licence granted to Bharat Hotels Ltd.
A Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela held that the relief granted earlier could not be sustained in exercise of writ jurisdiction, particularly where larger public interest was at stake.
The dispute arose from a Licence Deed dated April 22, 1982, which granted Bharat Hotels a 99-year licence to develop and operate a five-star hotel at Barakhamba Lane. While the agreement capped enhancement of licence fee at 100% after 33 years, NDMC raised a ₹1,063 crore demand in 2020 based on market valuation and simultaneously terminated the licence.
Reversing the Single Judge’s decision, the Division Bench noted the limits of contractual enforcement in public law, observing that:
“Relief under Article 226 is discretionary and cannot be granted where it results in inequitable consequences or adversely impacts public interest.”
The Court noted a stark disparity between the licence fee payable by Bharat Hotels (?1.45 crore, or at best ₹2.90 crore post-enhancement) and the ground rent payable by NDMC to the Land & Development Office, which stands at over ₹15 crore annually. Such imbalance, the Court held, would ultimately burden public funds and cannot be sustained.
Emphasising that public land is a scarce resource held in trust, the Bench held that courts must factor in equity, fairness, and public interest while exercising writ jurisdiction, even where contractual rights are asserted.
Accordingly, the Court set aside the Single Judge’s judgment and restored both the demand notice and termination of the licence deed.
Appearances:
For Appellant: Ms. Malvika Trivedi, Sr. Adv. with Mr. Sriharsha Peechara, Standing Counsel and Mr.Ashish Tiwari, ASC, Ms.Bani Dixit, Mr.Soumit Ganguli, Mr.Shailendra Slaria, Ms.Sujal Gupta, Ms.Ravicha Sharma, Ms.Shruti Agarwal, Mr. Sahib Patel, Mr.Akash Sharma and Mr.Anurag Tiwari, Advs.
For Respondents: Mr. Sandeep Sethi, Sr. Adv., Mr.Darpan Wadhwa, Sr. Adv. & Mr.Shyel Trehan, Sr. Adv. with Mr.Amer Vaid, Mr.Manmilan Sidhu, Mr.Ankit Tyagi, Mr.Gyanendra Singh, Mr.Anubhav Yadav, Ms.Bhumika Bhatnagar, Mr.Sonali Jaitley Bakhshi, Mr.Jaiyesh Bakhshi, Mr.Ravi Tyagi, Mr.Mayank Mishra, Mr.Rohan
Poddar, Ms.Riya Kumar, Ms.Shreya Sethi, Ms.Vidhi Jain and Mr.Krishna Gambhir, Advs.
