The Supreme Court on Thursday gave permission to the New Delhi Municipal Council to e-auction hotel Taj Mansingh in the Capital, reported PTI. The order has come as a major blow to the Tata Group affiliate Indian Hotels Company Limited that currently runs the five-star property.

However, the bench of Justices PC Ghose and RF Nariman asked the civic body to consider the “blemish-free” record of IHCL while auctioning the hotel. Although the court allowed the civic body’s plea that the Tata Group firm cannot have the right to refusal in the auctioning, it asked NDMC to grant six months’ “breathing time” to the IHCL to vacate the hotel in case they lose out.

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Last month, the civic body had approved the auction of the iconic property while cancelling Le Meridien Hotel’s licence over uncleared dues of Rs 523 crore. “Important decisions taken at today’s NDMC meeting – open auction of Taj Mansingh, cancellation of Le Meridian Hotel licence,” Chief Minister and NDMC council member Arvind Kejriwal had said. The civic body had selected the SBI Cap as its transaction adviser.

The matter has been in the courts for months now. In October last year, the Delhi High Court had dismissed a plea by IHCL, which challenged an earlier verdict allowing the auction of the hotel. The company then moved the Supreme Court against the high court ruling in November.

After the NDMC conveyed its plan to e-auction the property, the Supreme Court had asked IHCL to file its objections. The Tata Group susbsidiary had then told the apex court that it was unclear why the civic body wanted to auction the hotel despite the fact thet it earned the “best revenue” for NDMC.

Indian Hotels had entered into an agreement with the NDMC to construct the five-star Taj Mahal Hotel in December 1976. The original agreement expired in 2011, but the Tata group subsidiary continued running the hotel on extensions. The company had told the court that the deal was later modified into a joint venture, but the court had rejected the claim.