Delhi High Court refuses to reject suits by Taj Mahal and The Connaught hotels against NDMC's ₹46 crore licence fee

The Delhi High Court recently rejected the New Delhi Municipal Council's plea to dismiss the suits filed by Indian Hotels Company Limited (IHCL) seeking exemption from licences fees exceeding ₹46 crore for the COVID-19 pandemic period.

IHCL operates the Taj Mahal and The Connaught hotels in Delhi

Both hotels are owned by the New Delhi Municipal Corporation (NDMC) but operated by the IHCL which is a part of the Tata Group.

IHCL has filed two separate commercial suits against the NDMC. The civic body filed applications in both matters, seeking their rejection.

NDMC argued that the cases were barred by limitation. The council contended that the suits were filed without giving notice in writing as per Section 385 of the New Delhi Municipal Council Act, 1994. 

NDMC also stated that the dispute fell within the jurisdictional bar under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, and that the suit was not maintainable without consequential relief.

In a judgment delivered on October 13, Justice Subramonium Prasad rejected the civic body’s arguments. 

The Court held that a notice issued by IHCL on November 14, 2025, although described as a notice under Section 80 of the Code of Civil Procedure (CPC), fulfilled the requirements of Section 385 of the New Delhi Municipal Council Act, 1994.

It observed that the substance of a notice, rather than its label, must be considered and that the notice contained the necessary particulars required under the NDMC Act.

“The question of limitation is a mixed question of law and fact and at this stage it cannot be said with certitude that the Suit is barred by limitation as it is a matter which has to be seen during trial. Resultantly, this Court is not inclined to exercise its jurisdiction under Order VII Rule 11 of the CPC,” the Court added. 

IHCL approached the High Court seeking a declaration that in terms its agreement with NDMC, the hotel operator be excused from its obligation to pay ₹38.35 crore in licence fees in relation to the Taj Mahal hotel.

According to IHCL, the COVID-19 pandemic between 2020 and 2022 led to extended closures, severe restrictions on operations and an unprecedented collapse in revenues. The hotel was also requisitioned by the State to accommodate COVID-19 patients linked to Sir Ganga Ram Hospital, further preventing commercial operations.

IHCL argued that between 2020 and 2022, its turnover declined by over 95%. Yet, it continued to pay full employee salaries and incurred over ₹75 crore on community outreach and pandemic relief initiatives as part of the Tata Group’s response. 

The second suit concerned The Connaught-IHCL SeleQtions boutique luxury hotel on Shaheed Bhagat Singh Marg. In this case, IHCL has sought exemption from paying ₹7.84 crore in licence fees. 

In both cases, IHCL argued that the pandemic and the pollution restrictions qualify as force majeure under its agreements with the NDMC and therefore, it must be excused from paying the license fee. 

Senior Advocate Saurabh Kirpal with advocates RA Iyer, Aaliya Waziri and Rajat Chaudhary appeared for IHCL in The Taj Mahal Hotel case.

Senior Advocate Gautam Narayan along with advocates RA Iyer, Asmita Singh and Aaliya Waziri appeared for IHCL in The Connaught hotel case.

NDMC was represented by its Standing Counsel Saurabh Seth as well as advocates Sumer Dev Seth, Abhiroop Rathore, Kabir Dev and Sukhvir Singh.

[Read Judgments]