- विज्ञापन -
The Himachal Pradesh High Court has passed an important decision regarding financial liabilities between Himachal Pradesh and East India Hotels Limited (EIH) in the joint venture dispute related to Shimla’s famous hotel Wild Flower Hall. The court said that due to lack of consensus between the two parties on the name of the chartered accountant, RSM International Company has been appointed for arbitration. This company will inspect and match the accounts of Mashobra Resort Limited (MRL).
The court of Justice Jyotsna Rewal Dua has ordered the state government to inform the said company about this order. The court has also asked both the parties to provide meaningful cooperation to the company to fulfill the objective. The court also clarified that the company’s fees will have to be paid to EIH and the state in equal shares. The compliance report of the court’s orders has been asked to be placed before the court on July 14. In the case, the state government says that some financial and other liabilities have been imposed on EIH under the arbitration decision of July 23. These financial obligations are its rights and it is mandatory for EIH to discharge them.
What is the case
– A joint venture agreement (JVA) was executed between East India Hotels Limited (EIH) and Himachal Pradesh on 30 October 1995 for the construction and operation of Hotel Wildflower Hall. Later a joint venture company called Mashobra Resort Limited (MRL) was formed. According to the state, EIH did not comply with the agreement and illegally reduced the state’s shareholding in MRL. As a result, the state terminated the JVA on 6 March 2002. The dispute was put to arbitration and an award was passed on 23 July 2005.
This award was challenged. On 5 January 2024, the court ruled that EIH had failed to comply with the award. As a result, the court gave the state of Himachal Pradesh the right to take possession of the Wildflower Hall Hotel and the entire property falling under the JVA. EIH was directed to vacate the property within two months and hand over peaceful possession to the state. These orders were challenged by EIH in the Supreme Court, but its special leave petitions were dismissed on February 20, 2024. However, EIH was given time till March 31, 2025 to vacate the property and hand over possession to the state.
