Raising sharp questions over the valuation of Delhi’s iconic Hyatt Regency hotel, the Supreme Court on Wednesday asked why the five-star property was not auctioned at a time when real estate prices were clearly on the rise, and agreed to examine a plea seeking a probe by the Central Bureau of Investigation (CBI) and the Central Vigilance Commission (CVC) into its alleged undervaluation under a One Time Settlement (OTS).
A Bench comprising Chief Justice of India Justice Surya Kant, Justice Joymalya Bagchi and Justice Vipul Pancholi was hearing a petition concerning the OTS entered into between Asian Hotels (North) Pvt Ltd, Punjab National Bank (PNB) and Bank of Maharashtra (BoM).
Questioning the timing and manner of the settlement, the CJI remarked that “even a layman in Delhi can take notice of the fact that from 2023 to 2025, the value of real estate properties has been rising.”
He added that when a settlement is entered into in January 2025, “the value of a five-star hotel in Delhi is bound to be high.”
The plea, filed by NGO Infrastructure Watchdog, alleges that the OTS was contrary to banking norms and resulted in a massive undervaluation of the Hyatt Regency property, causing potential loss to public sector banks.
Appearing for the petitioner, Advocate Prashant Bhushan contended that the OTS violated the Reserve Bank of India (RBI) mandate, which requires stressed loans exceeding Rs 100 crore to be resolved through auction.
He pointed out that as of September 1, 2020, Asian Hotels’ outstanding dues stood at Rs 705 crore, while the market value of the Hyatt Regency was assessed at Rs 2,600 crore and Rs 2,651 crore by two independent valuers.
However, when the OTS was finalised in 2024, the same valuer allegedly pegged the hotel’s value at Rs 970 crore, despite a significant post-COVID surge in Delhi-NCR real estate prices.
The petitioner argued that this drastic reduction raises serious red flags and warrants an independent investigation.
Taking note that the settlement was concluded in 2025, the Bench questioned why the property was not auctioned at that stage.
Recalling a recent auction of a hotel property in Kerala that attracted multiple bidders, the CJI observed that a prime hotel property in Delhi would likely draw even greater interest.
Opposing the plea, Senior Advocates N. Venkataraman and Mukul Rohatgi, appearing for the respondent banks, submitted that Asian Hotels had attempted to auction the hotel and its assets on two occasions, but no buyers came forward.
It was further argued that the banks had recovered 116 per cent of the loan amount, and that the petition amounted to seeking a “roving inquiry” into a concluded commercial transaction.
The Supreme Court nonetheless issued notice to the Union of India, Punjab National Bank, Bank of Maharashtra and Asian Hotels (North) Pvt Ltd, and listed the matter for further hearing on March 18.
The Delhi High Court had earlier dismissed the petition, holding that the plea was based on insufficient material and that OTS decisions fall within the realm of commercial wisdom, generally immune from judicial review. It had also relied on precedents including Dr Subramanian Swamy v. Union of India, Kunga Nima Lepcha v. State of Sikkim and State of Jharkhand v. Shiv Shankar Sharma.
The Supreme Court will now examine whether the circumstances of the case justify judicial interference and an independent probe into the settlement.