Naik questions inclusion of pump in Centaur Hotel deal

NEW DELHI: Petroleum Minister Ram Naik has questioned the sale of Centaur Hotel, Mumbai to Batra Hospitality saying prior consent for including an IOC petrol pump in the sale agreement had not been taken.
"Neither Disinvestment Ministry nor the Ministry of Civil Aviation consulted us and took prior concurrence of IOC before including the retail outlet in the Agreement to Sell inspite of the fact that it is not the property of HCI," Naik said in a letter to Disinvestment Minister Arun Shourie.
Naik''s letter assumes significance in the wake of recent controversy over transfer of the pump by Batra Hospitality to Sahara as part of sale of the hotel earlier this month for presumably over Rs 100 crore.
Stating that the retail outlet was built by Indian Oil Corporation (IOC) on the land leased to it by the Airport Authority of India, Naik said Hotel Corporation of India (the former owner of Hotel Centaur) was appointed dealer.
Batra Hospitality, which bought Hotel Centaur for Rs 83 crore, cannot claim ownership of the petrol pump, he said adding "as per the Memorandum of Agreement between IOC and HCI, the dealership cannot be automatically assigned or transferred to a new party."
Disinvestment Ministry has sought handing over of the petrol pump located near the Domestic Airport, Mumbai to Batra Hospitality on the grounds that HCI had disclosed the Dealership Agreement with IOC in the Schedule to the Agreement to Sell and it was part of the valuation process.
Following the controversy over ownership of the pump, IOC sealed it while Batra Hospitality filed a suit against IOC in the Civil Court at Mumbai.
Stating that HCI under Centaur Hotel Mumbai had been operating the petrol pump since 1975, Naik said "this petrol pump is owned by IOC and HCI had entered into a Dealership Agreement for running it."
He suggested that IOC be allowed to operate the pump till the issue is settled.
Petroleum Minister is learnt to have taken exception to putting on sale a property which did not belong to HCI. "They (Disinvestment Ministry) never approached us to ascertain the ownership of the pump."
Meanwhile, senior Petroleum Ministry officials said the petrol pump, located across the hotel, was a Company Owned Dealer Operated (CODO) outlet and HCI was the dealer.
Batra Hospitality has claimed ownership of the petrol pump citing Disinvestment Ministry''s Information Memorandum on Centaur Hotel provided during due diligence which said "the pump operated by the hotel would be transferred to the new owner of Centaur."
Disinvestment Ministry, on the other hand, contended that hotels normally have restaurants leased to different people. When the company gets taken over by a new management these agreement/rights get transferred to it.
"HCI was only a tenant (on IOC property) and if a property owned by the tenant is taken over by someone, the landlord''s property which he occupies does not get transferred. This is illegal," Naik added.