HC orders Oberois to hand over Wildflower Hall to Himachal govt

On November 17 last year, the HC transferred the ownership of the five-star resort to the state government

Shimla: The Himachal Pradesh high court on Friday directed the Oberoi Group to hand over possession of the iconic Wildflower Hall to the state government within two months.

Wildflower Hall was once the residence of Lord Kitchener, a former commander of the British Army.

Rejecting a review petition filed by the East India Hotels (EIH), a part of the Oberoi Group, a single-judge bench of justice Satyen Vaidya allowed the Himachal Pradesh Tourism Development Corporation (HPTDC) to take over the hotel built across 22 acres at Chharabra on the outskirts of Shimla.

On November 17 last year, the high court had transferred the ownership of the 86-room five-star resort to the state government but stayed its ruling the next day, when HPTDC reached Chharabra along with a heavy police force to take control of the hotel.

“Since, the award grants right to the state to resume and take possession of the property immediately on non-compliance of the obligation by claimant No. 1 [EIH] within the stipulated period... it is free to resume and take possession of the property immediately,” the court said in its order on Friday.

Advocate RK Sood, the counsel for Oberoi group, said they will challenge the high court ruling. “We will move Supreme Court against the HC order,” he said.

HT reached out to government officials for a reaction but could not get one immediately.

The hotel -- once the residence of Lord Kitchener, a 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 a joint venture.

An agreement was signed between the state government and EIH on October 30, 1995, to incorporate a joint venture company -- Mashobra Resorts Limited -- for rebuilding and operating the hotel within four years. The firm had to pay a fine of ₹2 crore per year for any delay on its part to make the hotel functional, according to the agreement.

But the state contended that EIH violated the terms of the agreement and didn’t pay the fine and dues that were accumulated. In 2002, the government cancelled the agreement with the company.

In November last year, state industry minister Harshwardhan Chauhan said the hotel owed the state government nearly ₹120 crore. “Hotel Wildflower Hall used to be the property of Himachal tourism. An agreement was made with the Oberoi group of hotels, and there was a partnership. But in the last 25-30 years, they have not given anything to the state government in terms of revenue or equity,” he said.

A clause in the agreement said that the pact would be automatically terminated if the project was not commercially opened in six years.

Retired Supreme Court judge RP Sethi, who was appointed as the sole arbitrator in the dispute, ruled 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.”

EIH had filed a plea against this ruling but it was rejected in October 2022.

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