SC orders EIH to hand over Wildflower Hall to Himachal govt

Last year, following the high court’s order of 17 November, the state government immediately took control of the hotel. The high court, however, later stayed its order after EIH, a part of the Oberoi Group, filed a review petition before the court. In January, the high court, while admitting a petition filed by the state government, directed an EIH subsidiary to vacate the hotel.

Wildflower Hall is run by Mashobra Resort Ltd (MRL), in which EIH holds a 78.79% stake, according to the latter’s most recent annual report.

An email sent to the representatives of EIH remained unanswered till press time.

Mashobra Resort reported a revenue of ₹80.23 crore in FY23, rising from ₹73.85 crore a year earlier. It reported a loss of ₹30.55 crore in FY23, from a net profit of ₹28.46 crore in FY22.

The legal battle between EIH and the Himachal Pradesh government over the heritage property in Shimla began 20 years ago.

The high court blocked the state’s takeover attempt, ordering them to stay clear of the property until 15 December. This decision came after EIH challenged the government’s claim of ownership, arguing that the land was originally a freehold estate.

The 20-year-old dispute hinges on land classification and past agreements. While the state insisted the resort sits on government land, Oberoi claimed it was freehold and leased with a share transfer. Further complicating matters, the state alleged unpaid dues of ₹120 crore by the hotel. According to the company, the building of Mashobra Resort Limited (MRL) is situated on a land that has been classified as freehold, based on the conveyance deed dated 6 February, 1997. EIH and Himachal Pradesh Tourism Development Corporation had signed a joint-venture agreement in October 1995 to form MRL that runs the Wildflower Hall hotel.

EIH, in its December-quarter earnings report, expressed uncertainty about the outcome of the special leave petition filed by it and its subsidiary MRL before the apex court.

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Published: 20 Feb 2024, 11:40 PM IST