Delhi High Court refuses to throw out Indian Hotels’ COVID licence fee waiver suits against the NDMC, holding that a notice is judged by what it says and not what it is called; the claim of about Rs 46 crore is left to be decided at trial.
New Delhi: Two commercial suits by the Indian Hotels Company Limited (IHCL), in which the Tata Group company seeks exemption from licence fees of about Rs 46 crore for the COVID-19 period in respect of the Taj Mahal Hotel and The Connaught hotel, will go forward after the Delhi High Court turned down the New Delhi Municipal Council’s objections on notice, limitation and maintainability [The Indian Hotels Company Limited v. New Delhi Municipal Council].
On 13 October 2026, Justice Subramonium Prasad dismissed the NDMC’s application under Order VII Rule 11 of the Code of Civil Procedure. In the Taj Mahal Hotel suit, Senior Advocate Saurabh Kirpal, with Advocates R.A. Iyer, Aaliya Waziri and Rajat Chaudhary, appeared for IHCL, while Standing Counsel Saurabh Seth with Advocates Sumer Dev Seth, Abhiroop Rathore, Kabir Dev and Sukhvir Singh appeared for the NDMC.
Label versus substance on notice
The Court began with notice. The letter of 14 November 2025 was described as a notice under Section 80 of the Code of Civil Procedure, but in substance it was a notice under Section 385 of the NDMC Act, the Court held. Since the contract was entered into under Section 142 of that Act, Section 385 applied, and the Court declined to return the plaint for a fresh notice.
the substance of the notice that is to be seen and not the label.
Limitation and the rest, for trial
Limitation fared no better. Whether the NDMC’s letters of 11 March and 20 May 2025 gave a fresh cause of action, and whether IHCL can count the time spent in pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, are matters for trial, the Court held.
limitation is mixed question of law and fact.
The Public Premises Act did not apply, the Court held, because the suit seeks to enforce the terms of the contract and is not one for eviction. As for the Specific Relief Act, no demand notice had been issued and the amounts were yet to be crystallised, so the proviso to Section 34 was not attracted. The Court also stressed that courts must be very circumspect in rejecting a plaint under Order VII Rule 11.
What the two suits seek
The NDMC owns both hotels and IHCL operates them. In the Taj Mahal Hotel suit, CS(COMM) 197/2026, the agreement is dated 11 April 2019. IHCL says COVID-19 restrictions, closures, fewer guests and labour shortages hit the hotel between 2020 and 2022, and it asks for exemption from Rs 38.35 crore in licence fees, a 272-day extension of the licence period and adjustment of Rs 1.24 crore paid for 19 to 31 March 2020 against future dues. The second suit concerns the Connaught-IHCL SeleQtions hotel on Shaheed Bhagat Singh Marg, where it seeks exemption from Rs 7.84 crore.
IHCL’s case is that the pandemic and the related restrictions amount to force majeure under its agreements, that the State requisitioned the Taj Mahal Hotel to house COVID-19 patients linked to Sir Ganga Ram Hospital, that its turnover fell by over 95 per cent during 2020 to 2022, and that it still paid full salaries and spent over Rs 75 crore on outreach and relief.
These are IHCL’s pleadings and have not been tested. According to the order, the NDMC rejected the request for force majeure relief in 2022, wrote further letters on 11 March and 20 May 2025 and reiterated its refusal in May 2025. IHCL then issued a notice dated 14 November 2025 and filed the suit within six months of it.
What the NDMC argued
The NDMC contended that limitation barred the suits, that no notice had been given as Section 385 of the New Delhi Municipal Council Act, 1994 requires, that the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 shut out the civil court, and that a declaration could not be sought without consequential relief under Section 34 of the Specific Relief Act, 1963.
Why the order matters
Whether IHCL is entitled to the fee waiver or the licence extension is not decided by the order. All it holds is that the suits may proceed, and that a notice is judged by what it says and not what it is called. It also shows how limitation and mediation-period questions in commercial suits are generally left for evidence rather than settled at the threshold. The matter was listed before the Roster Bench on 2 November 2026, and the question of ad valorem court fee was not decided.
Case Title: The Indian Hotels Company Limited v. New Delhi Municipal Council [CS(COMM) 197/2026, I.A. 9246/2026]
Bench: Justice Subramonium Prasad, Delhi High Court
Date of Order: October 13, 2026
Appearances: Senior Advocate Saurabh Kirpal with Advocates R.A. Iyer, Aaliya Waziri and Rajat Chaudhary for the plaintiff; Standing Counsel Saurabh Seth with Advocates Sumer Dev Seth, Abhiroop Rathore, Kabir Dev and Sukhvir Singh for the NDMC