New Delhi: A major legal setback has hit The Lalit New Delhi, as the Delhi High Court upheld the New Delhi Municipal Council decision to cancel its licence and recover over Rs 1,063 crore in dues from Bharat Hotels Limited.

Located on Barakhamba Lane, The Lalit opened in 1988 with 444 rooms and emerged as a key luxury destination in the capital. The hotel is part of a chain founded by industrialist Lalit Suri, which expanded across cities like Mumbai, Goa, Bengaluru and Udaipur. After his death in 2006, the group came under the leadership of Jyotsna Suri.

Dispute over land and licence fee

The case revolves around a 6.0485-acre land parcel allotted to NDMC in 1973 and later licensed to Bharat Hotels in 1982 under a 99-year agreement. The agreement allowed revision of licence fees after 33 years.

Acting on this clause, NDMC issued a notice in February 2020 demanding Rs 1,063.74 crore based on a revised valuation. When the payment was not made, the civic body moved to terminate the licence, which Bharat Hotels challenged in court.

Division Bench overturns earlier relief

The hotel group initially secured relief from a single bench. However, NDMC appealed the decision. A Division Bench led by Chief Justice DK Upadhyay and Justice Tushar Rao Gedela reversed the earlier order and ruled in favour of NDMC. The court said land in New Delhi is a limited and valuable public resource and arrangements that lead to loss for public bodies cannot continue.

Licence interpretation and violations

The bench ruled that the 1982 arrangement was a licence and not a standard contract, which gives NDMC authority to regulate terms. It also pointed out concerns related to sub-licensing of commercial spaces within the premises, including parts linked to the World Trade Center complex.

After the ruling, NDMC may move to recover dues, take possession of the property or start a fresh allotment process. Bharat Hotels still has the option to approach the Supreme Court. The outcome of the case is likely to influence how private hospitality projects operate on government land in the future.