Wildflowers halls law suit: Major set back to Oberoi group Himachal HC dismisses decades old litigation  

Hotel Wild Flower Hall, which in British days was the house of the commander in chief of the armed forces, passed onto the state government and was run as a tourism hotel. After the old property burnt down the state government, over looking a higher bid by a rival company, decided to enter into a joint venture for operating a high end hotel. The initial agreement with Oberoi’s had spelt out 35 percent equity for the state which was paid in kind and the site was valued at Rs 7.5 crore. Over a period of time the government equity was reduced to 21 percent as the capital cost of the 85 room hotel was shown at Rs 99 crore. The hotel that was to come into operation within four year after signing of the agreement, but was made operational in March 2001.The government then disputed the hotel construction cost and attempted to forcibly occupy the property in March 2002. The dispute went to court and was referred for arbitration. The arbitrators considered that the differences among the partners as irreconcilable and decided that the government would continue to remain owners of the property. The arbitrator asked the government to enter into a 40 year lease agreement with Mashobra Resorts for a total amount of Rs 95 crore. The Oberoi group was also required to pay Rs 12 crore against the state transferring its equity in Mashobra Resorts. The arbitration award was challenged by the Oberoi group.

Himachal Pradesh High court today dismiss a appeal filed by Oberi groups and others in Wildflowers halls law suits in a 66 paged verdict pronounced here today. Division bench of justice Tarlok Singh Chauhan and justice Chander Bhushan Barowalia dismissed the appeal filed by the Hospitality major group. Bench upholding single bench order today passed order dismissing the appeal. Bench said that after discussion we find no merit in this appeal and the same is accordingly dismissed, leaving the parties to bear their own costs. The law suit was pending before the bench after an Arbitration and high court order was passed in favor state of Himachal Pradesh government and department of Tourism which was pending as appeal for almost many decades. Wildflowers halls is prime property of State which have around 85 room being run by Oberoi group. Dispute began after fire broke out in the hotel about twenty years ago and it was renovated again. Sources revealed the property which was handed out to Oberoi’s under a joint venture agreement in October 1995, has been incurring losses. The government has disputed the loss accounts of Wild Flower Hall. Wild Flower Hall happens to be a premier property of the Oberoi’s that is frequented celebrities.