New Delhi: The decks were cleared for the public auction of the iconic Taj Mansingh hotel by the Delhi high court on Tuesday after it dismissed a suit by Tata group's Indian Hotels Company Ltd that challenged the tender procedure of the New Delhi Municipal Council (NDMC).

The property, owned by the NDMC, was given to Indian Hotels on lease for 33 years. The lease had ended in 2011, and nine temporary extensions were given since then on various grounds, with three granted in the last year itself.

The verdict was pronounced by a bench of Justices S. Ravindra Bhat and A.K. Chawla. The court had reserved its order on May 3 after hearing the arguments of the counsel for Indian Hotels and the NDMC, the latter claiming it had not prejudiced the Tatas in any way.

Taj Mansingh is located close to South Block and a stone's throw away from the residences of cabinet ministers Rajnath Singh, Nitin Gadkari and Suresh Prabhu as well as from Congress president Sonia Gandhi's bungalow.

The apex court had on April 20 last year allowed the civic agency to e-auction the iconic five-star hotel.

The Tatas had moved the division bench of the high court against a September 5, 2016 judgment of a single judge who had not acceded to Indian Hotel's request for the renewal of the licence.

Indian Hotels in its plea questioned the revenue-sharing model in the tender document prepared by the NDMC, arguing the civic agency stood to lose money if the auction went through.

Senior advocate Sanjay Jain, appearing for the NDMC, said they had considered the track record of Indian Hotels and that is why they have not put any condition on them, whereas several conditions were imposed in the case of the other bidders.

He had said the bid conditions contained provisions for a minimum guaranteed sum payable and making only those entities that have a turnover of at least Rs 200 crore eligible for the bidding. Jain had said it was the NDMC's prerogative to decide the tender conditions and it was not discriminating against anyone.

The Supreme Court had earlier allowed the plea of the NDMC that the Tata group company cannot have the right to refusal in the auction of the hotel.

The bench, however, had asked the civic body to grant six months' "breathing time" to the company to vacate the hotel in case they lose out in the e-auction. The court had also said that the "blemish-free" record of Indian Hotels may be taken into account by the NDMC, while auctioning the property.