The High Court of Himachal Pradesh has issued a directive to East India Hotels Limited (a part of the Oberoi group) and others, ordering them to vacate the Wild Flower Hall Hotel property and hand over peaceful possession to the Himachal Pradesh government. The court’s decision, which was reserved on December 15 last year, was finalized on Friday. The compliance with the judgment is expected to be accomplished within two months from the date of this order. The next hearing is scheduled for March 15.
Justice Satyen Vaidya, in his judgment, noted that the non-applicants (East India Hotels Limited and others) had failed to comply with the terms of the award within the stipulated period of three months from October 13, 2022, when the award became final. Consequently, the Board of Directors resolution and Government decision dating back to February 7, 2002, have automatically revived.
The judgment states that the State of Himachal Pradesh is now entitled to take possession and management of the entire property, including the Wild Flower Hall Hotel, which was the subject matter of the Joint Venture Agreement (JVA).
In addition, the parties involved have been requested to submit their preferences for the appointment of reputable chartered accountants to settle the disputed accounts of the Mashobra Resorts Limited (MRL) as per the award dated July 23, 2005, issued by the Arbitrator.
Justice Satyen Vaidya emphasized that the July 23, 2005 award does not suggest that the terms of the lease deed would be decided by the State of Himachal Pradesh. Instead, the award already determined the terms of the lease, and the non-applicants were expected to execute a formal lease deed to give effect to those terms.
The judge further highlighted that the lease period’s commencement date was fixed by the arbitrator, and the initial 40-year period was considered the first phase of the lease, with provisions to extend it if necessary. The rent payable by the non-applicants to the state government during different phases of the initial 40 years of the lease had already been established. Therefore, the non-applicants were obligated to execute the lease deed within the designated three-month period as per the award.
The state government had sought possession of the Wild Flower Hall property, including the land, building, structures, and other immovable assets developed through the Joint Venture Company on the Wild Flower Hall Estate. The court was requested to direct East India Hotels (EIH) Limited/MRL to cooperate fully and facilitate the peaceful possession of the property.
The government argued that since EIH Limited failed to comply with the directions and conditions of the arbitral award dated July 23, 2005, the State of Himachal Pradesh had decided to resume the Wild Flower Hall property and take possession according to the award.
The non-applicants (EIH and others), however, opposed the requests made in the application, asserting that they had already complied with the directions of the July 23, 2005 award. They referenced a communication dated October 18, 2022, sent by EIH Limited to the Principal Secretary (Tourism and Civil Aviation) of the Government of Himachal Pradesh to support their contention.
The court’s directive to vacate the Wild Flower Hall Hotel and hand over the property to the Himachal Pradesh government signifies a significant development in this ongoing legal dispute. The State of Himachal Pradesh is now expected to assume possession and management of the property, as per the judgment. The disputed accounts of Mashobra Resorts Limited are also set to be settled by a team of reputable chartered accountants. The next hearing scheduled for March 15 will assess compliance with the court’s directives.
