4 min readNew DelhiApr 23, 2026 10:12 PM IST
In a setback for Bharat Hotels, which goes by the brand name of ‘The Lalit’, the Delhi High Court on Wednesday cleared the path for New Delhi Municipal Council (NDMC) to revive a demand of over Rs 1,000 crore as arrears from the hospitality group for its luxury hotel located on Barakhamba Road in Central Delhi.
With this, a division bench of Chief Justice DK Upadhyaya and Justice Tushar Rao Gedela, on April 22, overturned a single-judge’s decision from December 2023.
On February 13, 2020, the NDMC had issued a demand notice to Bharat Hotels for Rs 1063.74 crore as arrears of licence fee at the rate of Rs 98 crore per annum, with retrospective effect from March 2014. The same day, the NDMC also communicated that a licence deed in favour of Bharat Hotels – dated April 22, 1982 – for a plot measuring 6.058 acre on Barakhamba Lane has been terminated with immediate effect.
In December 2023, a single judge had quashed both of NDMC’s action – termination of license deed as well as the demand notice. The NDMC had then appealed against the verdict before a division bench of the HC.
The demand notice was issued by the NDMC following a string of alleged violations of licence conditions by the hotel, which was granted the licence of the land to develop a five-star hotel in preparation for the Asian Games.
Initially, the licence granted for 99 years had fixed the fee at Rs 1.45 crore per year. The conditions included that the licence fee will be enhanced after every 33 years, with the increase in the fee each time not exceeding 100%. This would mean the licence fee as on 2014 would be revised maximum to Rs 2.9 crore.
The licensee could also issue sub-licence for specific purposes like setting up parking, banks and shopping arcade, among others, but it is the licensee who shall be responsible in case of any infraction.
In 2016, one of the sub-licensee attempted to sell the office space in the premises to one Indian Wind Power Association. However, the agreements to sale were withdrawn in 2018 after it came to the government’s notice.
Story continues below this ad
Eventually, by 2020, the demand notice and the termination of the licence deed was set aside by the single judge.
Following this, the Ministry of Housing and Urban Affairs, through its Land and Development Office (L&DO), issued a demand notice to the NDMC, requiring it to pay Rs 98 crore per year as ground rent. The L&DO reasoned that the Union government had allotted the land to NDMC in 1983.
The NDMC, in turn, justified the 2020 demand notice on the ground that the licence revenue earned is “exceedingly meagre” if licensee fee is not enhanced in terms of market value, which is against public interest.
The division bench, in its ruling, has factored in the public interest. “There cannot be any doubt that land in New Delhi is one of the scarcest natural resource, which has been put to management by the owner of the land, namely, L&DO, to the NDMC and accordingly, if any transaction in respect of such a land is resulting in such a huge loss to NDMC, the burden gets transferred to the taxpayer, who are the residents of New Delhi. Such a transaction, in our opinion, cannot be approved of, else it will be violative of Article 14 (equality) of the Constitution of India,” the court held.
This was after factoring in the “huge difference” – the amount of annual license fee to be paid by Bharat Hotels, which is Rs 2.9 crore annually, and the Rs 98 crore the Centre is demanding from NDMC.
© The Indian Express Pvt Ltd
