The Supreme Court of India has agreed to hear a plea alleging undervaluation of Delhi’s Hyatt Regency Hotel in one-time settlement deals between Asian Hotels and two public sector banks. Issuing notice to the Centre and the banks, the Court said it must ensure transparency as the funds involved are public money.
New Delhi: The Supreme Court on Wednesday agreed to hear a plea seeking an investigation into the alleged undervaluation of Delhi’s Hyatt Regency Hotel during one-time settlement (OTS) deals entered into between Asian Hotels (North) Pvt Ltd and two public sector banks.
A Bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi issued notice to the Centre, Asian Hotels (North) Pvt Ltd, Bank of Maharashtra and Punjab National Bank, seeking their replies on the matter.
The top court was hearing a petition filed by NGO Infrastructure Watchdog, which has challenged a November order passed by the Delhi High Court last year. The High Court had dismissed a public interest litigation filed by the NGO seeking a probe by the Central Bureau of Investigation and the Central Vigilance Commission into the OTS agreements between Asian Hotels (North) Pvt Ltd and the two banks.
The High Court had recorded in its order that Asian Hotels (North) Pvt Ltd is the owner of the Hyatt Regency Hotel in Delhi. The NGO had also sought before the High Court that the one-time settlement dated January 24, 2025, entered into between Asian Hotels (North) Pvt Ltd and Bank of Maharashtra, be quashed.
During the hearing before the Supreme Court, senior advocate Prashant Bhushan, appearing for the NGO, alleged that the transaction involved serious irregularities and termed it another kind of a “bank fraud”.
Additional Solicitor General N Venkataraman, appearing for one of the banks, strongly opposed the allegation and said that the transaction was a genuine commercial banking decision.
He stated,
“We have recovered 116 per cent of the loan amount. Now, he wants an inquiry, an absolutely roving inquiry without any basis,”
while defending the bank’s actions.
During the hearing, the Bench noted that the OTS was finalised in 2025 and questioned the steps taken earlier by the bank.
“Before that, when did you put the hotel on auction?”
the Bench asked.
Responding to the query, the law officer informed the court that the property was put up for auction in 2023, but no bids were received. The Bench then directed him to place the relevant records before the court.
Emphasising the importance of transparency in public sector banking decisions, the Chief Justice observed,
“As a matter of principle, in the commercial wisdom of the banks or the financial institutions, we will not interfere. There is no question. But when we are talking of your commercial wisdom, we also know it very well that you are not a private entity. The funds which you have are the public funds. This money belong to the people of this country,”
the CJI said.
The Chief Justice further added,
“Therefore, your commercial wisdom is for the purpose of giving undue benefit to a person or it is to protect the public interest, that will have to be seen,”
the CJI said.
The Bench observed that since the issue had been brought to its notice, the court must satisfy itself that the entire process was carried out in a transparent and fair manner. The Additional Solicitor General responded that the decision on the OTS was not taken by the bank alone and that a five-member special committee, headed by a retired judge, had examined the matter.
He also argued that the allegations made against the bank were vague and sweeping in nature. Taking note of the submissions, the Supreme Court directed that all relevant records, including bank reports and complete details of the loan amounts involved, be produced before it.
In its earlier order, the Delhi High Court had held that banks acting in good faith cannot be questioned by courts on the economic soundness of their decisions. It had also observed that allegations of financial impropriety against banks should not be entertained unless supported by strong and convincing material.
The High Court had concluded that no case was made out even for issuing notice on the petition and had dismissed the plea.
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