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HC orders Oberoi group to hand over Hotel Wildflower Hall to Himachal govt
The court also ordered both the parties, Himachal government and Oberoi Hotel Group, to appoint a renowned chartered accountant to settle the financial matters in this regard
The Himachal Pradesh high court on Friday directed the Oberoi Hotel Group to hand over the possession of the iconic Wildflower Hall Hotel to the state government within two months.
The court also ordered both the parties to appoint a renowned chartered accountant to settle the financial matters in this regard. Disposing of the government’s application, it said Oberoi Group had failed to comply with the arbitration award within the stipulated time limit of three months. Therefore, the state government became eligible to take over the possession and management of the hotel. Accepting the government’s application, justice Satyen Vaidya also ordered to present the compliance report of the case on March 15.
“We will move Supreme Court against the HC order,” said RK Sood, counsel for the Oberoi Hotel Group.
The order has paved way for the Himachal Pradesh Tourism Development Corporation to take over the high-end hotel. The court rejected a review petition filed by East India Hotels, which runs the day-to-day affairs of the hotel, against the court order passed on November 17, 2023. A single bench of the high court had passed the order of “warrant of possession” filed by the HPTDC on December 15, 2023.
After the November 17 order, the government hastened to take over the possession of the Hotel but EIH got a stay from the high court which asked the government to maintain status quo till the next hearing.
Hotel Wildflower Hall, once the residence of Lord Kitchener, the former Commander of the British Army, was gutted in a fire on April 5, 1993, and later handed over to the EIH for running as joint venture, “Mashobra Resorts Limited”.
An agreement was signed between the Himachal government and EIH on October 30, 1995, to incorporate a joint venture company, Mashobra Resorts Limited, for constructing and operating the hotel with the condition that the state government’s share in the company would be not less than 35% and the EIH’s not less than 36%. Shares of the firm were also reserved for a public issue.
With problems cropping up frequently, the state government on March 6, 2002, issued an order terminating the agreement on grounds of “breach of terms.” On December 21, 2023, the Himachal government told the high court that it wanted to resume Hotel Wildflower Hall, presently in possession of EIH of the Oberoi group.
Retired Supreme Court judge RP Sethi, who was appointed as the sole arbitrator in the dispute, found that the joint venture agreement was legally valid and binding on all parties and recorded that the relationship between the disputing parties was “damaged beyond repair and parting of ways was the only solution.” The EIH had filed a plea against the award of the arbitrator but its plea was dismissed by the high court in October 2022, with the observation there was no merit in the appeal.
With PTI inputs
