Eyeing revenue, Himachal govt plans to lease out Hotel Wildflower Hall
Paving the way for this, the state cabinet in its meeting held under the chairmanship of chief minister Sukhvinder Singh Sukhu on Saturday had approved hiring of a consultant company to lease out the property
Nestled in the picturesque area of Himachal, Hotel Wildflower Hall, will again be up for grabs with the state government planning to lease it out again. Himachal had managed to get possession of the prestigious property back in January last year after two decades of legal battle.
Paving the way for this, the state cabinet in its meeting held under the chairmanship of chief minister Sukhvinder Singh Sukhu on Saturday had approved hiring of a consultant company to lease out the property.
“The cabinet had approved hiring a company to work out further modalities. The company will decide on the best way to lease out the property which would be soon given on lease to highest bidder,” said industries minister Harshwardhan Chauhan.
Ever since getting back possession of the prized property, the state government has been exploring options to find a suitable partner to run the luxury hotel which will help in revenue generation for the state facing fiscal constraints.
It was in June 2023, Sukhu had ordered the execution of a 2005 arbitration award under which the Wildflower Hall property spread over 100 hectares, including a pristine deodar forest, was to be taken over by the Himachal Pradesh Tourism Development Corporation (HPTDC).
Legacy and history
According to records, Wildflower Hall was originally owned by GHM Batten, the private secretary of the Earl of Lytton. The Colonial-era building was gutted in fire. Batten reconstructed the building and Lord Kitchner, the then commander-in-chief of the Indian armed forces, secured the lease from its owner. He returned to England in 1909 after which it was sold to a British couple, who razed the house in 1925 to erect a three-storeyed hotel with 37 rooms.
After Independence, the property was taken over by the Government of India that ran an agricultural school in it till 1973 when it was handed over to the HPTDC to run a hotel. The HPTDC built 11 cottages and four rooms, a multipurpose hall and a green room.
On April 5, 1993, the building was destroyed in a fire caused by a short circuit. However, the HPTDC kept running the cottages and four other rooms that had survived the blaze till the Himachal Pradesh government signed a joint venture with the Oberoi Group to rebuild Wildflower Hall as a luxury hotel.
HPTDC was running the hotel till 1993
Around 1993, a fire broke out in the hotel and it got completely burnt. The state government decided to explore various methods and possibilities of putting the hotel back in operation. The dispute over the property erupted after global tenders were invited to re-develop it as a five-star hotel. East India Hotels Limited, a flagship company of the Oberoi Group, also participated and the state government decided to work in partnership with it. Under the joint venture, a company called Mashobra Resort Limited was formed to build the five-star hotel within four years. For not doing so, the company had to pay a fine of ₹2 crore every year to the state government.
In 1996, the government transferred the land in the name of the company. But even after six years, the company could not make the hotel ready for use. Then BJP government under PK Dhumal, citing concerns about “selling Himachal’s interests” terminated the agreement on March 6, 2002, citing a breach of terms amid ongoing issues such as the non-functionality of the hotel within the mandated six years and the non-regularisation of 57 rooms by the town and country planning department.
This decision of the government was challenged before the company law board, which ruled in favour of the company. The government challenged this decision before a single bench of the high court.
Disposing of the government’s application, the HC on November 17, 2023, said the Oberoi Group had failed to comply with the arbitration award within the stipulated three months. Therefore, the state government became eligible to take over the possession and management of the luxury hotel. The HC had sent the case to the arbitrator for settlement. The arbitrator upheld the government’s decision to cancel the contract with the company in 2005 and entitled it to take back the property.
The Oberoi Group moved the HC, challenging the single bench’s decision but the company’s appeal was dismissed. The Oberoi group had even moved the Supreme Court but the Apex court in January 2024 too upheld the HC’s order.