SC asks EIH to hand over Wildflower Hall to Himachal government

Upholding the High Court of Himachal Pradesh order, the Supreme Court on Tuesday asked the East India Hotels Limited (of Oberoi group) and others to vacate Shimla's Wildflower Hall luxury hotel. About a month back, the HC mandated East India Hotels (EIH) of the Oberoi Group to surrender possession of the renowned five-star Hotel Wildflower Hall to the Himachal Pradesh Tourism Development Corporation (HPTDC) within two months. 

The apex court asked the hotel chain to hand over the possession of the property to the state government within a year

The high court’s order came after the rejection of EIH’s review petition against the initial decision made on November 17, 2023.

The High Court ruled that Oberoi Group failed to comply with the arbitration award within the stipulated three-month time frame. Consequently, the state government is deemed eligible to assume possession and management of the hotel. The case was heard in the court of Judge Satyen Vaidya.

Wildflower Hall luxury hotel is a heritage property and was the former residence of Lord Kitchener, a colonial era commander-in-chief of the British Army.

The argument is centered on the renovation of the Wild Flower Hall Hotel, which was damaged by a fire in 1993. East India Hotels Limited joined theglobal tender for its renovation in collaboration with the Himachal Pradesh government. A joint venture company, Mashobra Resort Limited, was established under the agreement, with the company obligated to build a five-star hotel within four years.

The problem started when the company failed to meet this obligation, leading to a fine of Rs 2 crore annually imposed by the government.

In 2002, the government terminated the agreement due to a “breach of terms,” a decision contested by the company before the Company Law Board. The board ruled in favour of the company, prompting the government to challenge the decision in the High Court.

The court appointed an arbitrator who, in 2005, upheld the government’s decision to cancel the contract, granting the government the right to reclaim the property.

Himachal Pradesh's Industry Minister Harsh Wardhan Chauhan told that the court: "Hotel Wildflower Hall used to be the property of Himachal Tourism. An agreement was made with the Oberoi group of hotels in partnership. But in the last 25–30 years, they have not given anything to the Himachal government in terms of revenue or equity. This case was in court for a long time. Some time ago, the Himachal government won the case. Yesterday, the high court gave permission to take over the Hotel Wildflower Hall.

The EIH had filed a plea against the award of the arbitrator but the high court had dismissed its plea in October 2022, observing there was no merit in the appeal.

In November 2023, a high court order llowed the state to take immediate possession of the hotel, but as the tourism department moved to seize the property, the court issued a stay order. This after the listed hospitality firm, EIH, filed a petition seeking to review the November 17 order.

Also read: EaseMyTrip, Jeewani Group partners with Radisson 150-room hotel in Ayodhya