Shimla, Nov 30,
The Himachal Pradesh Government, after winning the Wildflower Hall execution petition in the Supreme Court, is now entertaining consultations with the East India Hotels (EIH) group to potentially retain control over the ₹800 crore property and land.
During a hearing on the matter before Justice Jyotsana Rewel Dua on Saturday, the state government submitted that it is still deliberating on the proposals submitted by East India Hotels and Mashobra Resort Limited regarding control of the Wildflower Hall Hotel in Charabra.
Both parties informed the court about the ongoing conciliation efforts, and, on their joint request, the court scheduled the next hearing for January 4.
It is noteworthy that the High Court had previously ordered the transfer of Wildflower Hall’s possession to the Himachal Pradesh Government. EIH challenged this order in the Supreme Court but lost the legal battle twice.
It was learned that the legal dispute arose after appointing a reputed chartered accountant to resolve financial matters. However, while disposing of the government’s application, the court observed that the Oberoi Group failed to comply with the arbitration award within the stipulated three-month period. This made the state government eligible to take over the hotel’s possession and management.
The case dates back to 1993 when Wildflower Hall Hotel was destroyed in a fire. To redevelop it as a five-star property, a global tender was invited, in which East India Hotels Limited participated. The state government decided to collaborate with EIH under a joint venture, forming a company named Mashobra Resort Limited. According to the agreement, the company was required to construct the five-star hotel within four years, failing which it would incur a penalty of ₹2 crore annually payable to the state government.
Also read: Wildflower hall law suit: Major set back to Oberoi group as HP HC dismisses decades old litigation
In 1996, the government transferred the land to the company. However, even after six years, the company failed to make the hotel fully operational. Consequently, in 2002, the government terminated the agreement. The company challenged this decision before the Company Law Board, which ruled in its favor. The government then appealed to the High Court’s single bench, which referred the matter to arbitration.
In 2005, the arbitrator upheld the government’s decision to terminate the agreement, deeming the state entitled to reclaim the property. Dissatisfied, the company challenged the arbitrator’s decision before a division bench, which dismissed the appeal. The bench ruled that the arbitrator’s decision was valid and reasonable, emphasizing that the company could not selectively accept favorable terms of the agreement while ignoring unfavorable ones.
After successfully defending the case in the High Court and the Supreme Court, this marks the third instance where the two parties have returned to the High Court, now seeking repeated adjournments.
Also read:Supreme court upholds eviction of EIH ltd from Wildflower hall in Shimla: Victory for Himachal Govt
It is worthwhile to note that Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu recently stated in an interview that the government may retain control of Wildflower Hall with the Oberoi Group if they are willing to pay the property’s price value. He added that if the Oberoi Group makes a suitable offer, the government would consider handing over the property; otherwise, it would invite global tenders for its redevelopment.
The Chief Minister also mentioned that the government is considering handing over HPTDC hospitality units, including Wildflower Hall, to private players. However, before doing so, it will consult with HPTDC employees. He clarified that while the government has the authority to make such decisions, it is sometimes bound to comply with court orders.
The case is now back in the High Court, which will decide the fate of this prominent tourism property. Considering past experiences, the state government has struggled to secure good returns from such assets. Meanwhile, the hospitality industry and properties like Wildflower Hall remain lucrative ventures for private players, highlighting their enormous potential.
Empower Independent Journalism – Join Us Today!
Dear Reader,
We’re committed to unbiased, in-depth journalism that uncovers truth and gives voice to the unheard. To sustain our mission, we need your help. Your contribution, no matter the size, fuels our research, reporting, and impact.
Stand with us in preserving independent journalism’s integrity and transparency. Support free press, diverse perspectives, and informed democracy.
Click [here] to join and be part of this vital endeavour.
Thank you for valuing independent journalism.
Warmly,
Vishal Sarin, Editor
