The Supreme Court recently refused to interfere with a Himachal Pradesh High Court order directing East India Hotels (EIH) Limited, an Oberoi Group company, to hand over its iconic Wildflower Hall hotel in Shimla’s Chharabra to the state government.
A bench comprising Justice Abhay S. Oka dismissed an East India Hotels appeal against the 6 January order. Nonetheless, the Supreme Court gave the company a year to comply with it. The High Court had given the company two months to vacate and hand over the hotel’s possession.
The January 6 order stated that the EIH had failed to comply with a July 2005 arbitration award that required the company to execute a fresh lease deed with the state government. This followed after the state government filed a petition, seeking the execution of the arbitration award. The Himachal Pradesh government had also said it was willing to run the place.
Earlier, in 17 November order, the HC said that the EIH had not completed the formalities laid down in the arbitration award to continue with its leasehold rights and asked the state government whether it was keen to take over the hotel.
Subsequently, the state sent an IAS officer and three dozen policemen to execute an order signed by the principal secretary of tourism to take over the hotel, instead of waiting for the next hearing. The High Court intervened but later decided in the state’s favour and directed EIH to vacate the premises.
Senior Advocate Shyam Divan appearing for EIH contested the High Court’s observation that the company did not comply with the terms of the arbitration award. Senior Advocate Mukul Rohatgi and Senior Advocate Dhruv Mehta, who opposed the EIH appeal on behalf of the state, argued that according to the arbitration award, the company should have executed a lease deed within three months of the declaration of the award. The counsel added that the EIH lost the right to manage the hotel when it failed to do the same.
As the state appeared on caveat before it, the Supreme Court did not issue any formal notice seeking its response, but simply rejected the EIH appeal.