Himachal Pradesh High Court orders closure of 18 State-owned hotels citing financial crunch

The Himachal Pradesh High Court recently directed the State's Tourism Development Corporation to close down 18 State-owned hotels due to their financial unviability [Jai Kishan Mehta vs The Himachal Pradesh Tourism Development Corporation Ltd. and another].

Justice Ajay Mohan Goel said the Corporation has failed to use these properties to earn profit and that their continued operation was nothing but a burden on the exchequer of the State.

The Court made the observation after analyzing the occupancy of the hotels in the past few years. It remarked that things were much more dismal than apprehended by it.

“The continuation of the functioning of these properties ... is nothing but a burden on the exchequer of the State and the Court can take judicial notice of the fact that there is a financial crunch which is daily being propagated by the State in the matters being listed before the Court involving finances,” the Court said in its November 19 order.

The closure of following hotels has been ordered:

(i) The Palace Hotel, Chail, 

(ii) Hotel Geetanjali, Dalhousie, 

(iii) Hotel Baghal, Darlaghat, 

(iv) Hotel Dhauladhar, Dharamshala, 

(v) Hotel Kunal Dharamshala, 

(vi) Hotel Kashmir House, Dharamshala, 

(vii) Hotel Apple Blossom, Fagu, 

(viii) Hotel Chanderbhaga, Keylong, 

(ix) Hotel Devdar, Khajiar, 

(x) Hotel Giriganga, Kharapatthar, 

(xi) Hotel Meghdoot, Kiarighat, 

(xii) Hotel Sarvari, Kullu, 

(xiii) Hotel Log Huts Manali, 

(xiv) Hotel Hadimba Cottage, Manali, 

(xv) Hotel Kunzum, Manali, 

(xvi) Hotel Bhagsu Mcleodganj, 

(xvii) Hotel the Castle, Naggar, 

(xviii) Hotel Shivalik Parwanoo.

The Court said the Corporation’s Managing Director (MD) would personally be responsible for ensuring the closure of these hotels.

It further directed that while skeletal staff necessary for the upkeep of the property can be retained in the premises of the properties, the Corporation can transfer the remaining employees to other places.

The matter is now listed for further orders on December 3. The Court has directed the MD to file a compliance affidavit. 

The directions were passed in a case related to non-payment of dues to a former employee of the Corporation.

On September 17, the Court had taken note of the larger issue of delay in the payment of post-retrial benefits to the retired employees by the Corporation.

It had commented on the tourism body’s dismal situation.

“Though, State of Himachal Pradesh is referred to as ‘Dev Bhumi’ and is also recognized as a tourist destination but the Tourism Development Corporation of the State apparently is in shambles,” the Court had observed.

It had also taken note of the fact while tourists were coming to the State, they were not staying in the Corporation’s properties.

“It appears that they are residing in Hotels other than the ones owned by Tourism Development Corporation and also having their meals in Restaurants other than run by the Tourism Development Corporation, despite the fact that the Corporation is having properties at the prime locations of the State,” the Court had said.

Advocate Om Prakash Goel represented the petitioner.

Advocate Shilpa Sood represented the Himachal Pradesh Tourism Development Corporation.

Additional Advocate General Pushpender Jaswal represented the State of Himachal Pradesh.

[Read Judgment]