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A bench headed by Justice B N Agarwal, while disposing of the petition, allowed the state authorities to go into the management transfer of the hotel property.
The state government had moved the apex court alleging that the hotel property worth more than Rs 151 crore was transferred by ITDC under the Central government's disinvestment policy to a private party for a paltry sum of Rs 7.5 crore.
The Rajasthan High Court had earlier dismissed a case of public interest litigation filed by a union leader challenging the transfer of the Rs 151-crore property at "a throwaway price".
The Supreme Court bench said that the Rajasthan High Court's observation that there was no transfer of property will not influence the proceedings before the Court of Collector (Stamps), Udaipur, or any other court.
No observation shall prejudice the case of the state in any piece of litigation with regard to the divestment, Justice Agarwal stated.
The possession, management and control of the hotel was transferred by executing a share-purchase agreement after valuing its reserve share price far below its net worth, state counsel Madhurima Tatia said, adding that the sale would result in a heavy financial burden on the state exchequer.
The Rajasthan High Court had observed that acquiring controlling interest in the hotel happened not by transfer of the property but by taking over the business through a methodology devised by the Union government. The authorities had informed the district collector that the total valuation of just the 1,27,900 hectare hotel land (not the building) in October 2001 was more than Rs 151 crore.
The state government alleged that the High Court had arrived at the finding without making a proper inquiry into the nature of the transaction.
It stated that it had in January 2001 prescribed the market rates of the commercial land near the hotel at Rs 1,100 per square foot.
According to the state, a case under Rule 866 of the Stamp Rules 1955, read with Section 17 of the Registration Act, 1908, was registered against the Laxmi Vilas Palace hotel regarding the evasion of stamp duty in February 2002.
The union leaders had produced certain documents before the Collector of Stamps indicating that there was a transfer of the property from ITDC to Bharat Hotels, it added.
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