'Land In Delhi Scarce': High Court Restores NDMC's ₹1063 Cr License Fee Demand From Hotel, Says Can't Burden Taxpayers

The Delhi High Court has allowed the appeals filed by the New Delhi Municipal Council (NDMC) and restored a demand of over ₹1,063 crore raised against Bharat Hotels Ltd. in a long-standing licence fee dispute, observing that any transaction involving scarce public land that results in loss of public revenue cannot be permitted to burden taxpayers.A Division Bench of Chief Justice DK Upadhyaya and Justice Tejas Karia set aside the judgment of the Single Judge which had earlier quashed the demand notice dated February 13, 2020 as well as the termination of the licence deed executed in 1982 for operation of a five-star hotel in the national capital.The dispute arose out of a 99-year licence granted by NDMC to Bharat Hotels for use of prime land in New Delhi. NDMC had revised the licence fee and raised a demand exceeding ₹1063 crore, contending that the earlier fee structure did not reflect the true value of the land. The licensee challenged the demand and termination, which were set aside by the Single Judge.Reversing that decision, the Division Bench held that land in New Delhi is an extremely scarce public resource and its management must ensure that public revenue is not compromised.“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 tax payer, who are the residents of New Delhi. Such a transaction, in our opinion, cannot be approved of, else it will be violative of the Article 14 of the Constitution of India.”The court also found the licensee in breach of license conditions regarding subletting of land..Accordingly, the Court allowed NDMC's appeals and set aside the Single Judge's order, thereby restoring the demand and related action taken by the municipal authority.Appearance: Ms. Malvika Trivedi, Sr. Adv. with Mr. Sriharsha Peechara, Standing Counsel and Mr.Ashish Tiwari, ASC, Ms.Bani Dixit, Mr.Soumit Ganguli, Mr.Shailendra Slaria, Ms.Sujal Gupta, Ms.Ravicha Sharma, Ms.Shruti Agarwal, Mr. Sahib Patel, Mr.Akash Sharma and Mr.Anurag Tiwari, Advs. for Appellant; Mr. Sandeep Sethi, Sr. Adv., Mr.Darpan Wadhwa, Sr. Adv. & Mr.Shyel Trehan, Sr. Adv. with Mr.Amer Vaid, Mr.Manmilan Sidhu, Mr.Ankit Tyagi, Mr.Gyanendra Singh, Mr.Anubhav Yadav, Ms.Bhumika Bhatnagar, Mr.Sonali Jaitley Bakhshi, Mr.Jaiyesh Bakhshi, Mr.Ravi Tyagi, Mr.Mayank Mishra, Mr.Rohan Poddar, Ms.Riya Kumar, Ms.Shreya Sethi, Ms.Vidhi Jain and Mr.Krishna Gambhir, Advs. for RespondentsCase title: NDMC v. Bharat Hotels LtdCitation: 2026 LiveLaw (Del) 413Case no.: LPA 364/2024Click here to read order

'Land In Delhi Scarce': High Court Restores NDMC's ₹1063 Cr License Fee Demand From Hotel, Says Can't Burden Taxpayers

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'Land In Delhi Scarce': High Court Restores NDMC's ₹1063 Cr License Fee Demand From Hotel, Says Can't Burden Taxpayers

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