Delhi Hyatt Valuation Under Supreme Court Review

Delhi’s Hyatt Regency hotel has come under Supreme Court scrutiny after judges questioned whether a one-time settlement between Asian Hotels North Pvt Ltd and two public sector banks reflected fair valuation and transparency, given that public money is involved. The case reopens a wider debate on accountability in managing stressed urban assets.

A bench led by Chief Justice Surya Kant, along with Justices Joymalya Bagchi and Vipul M Pancholi, said commercial decisions by state-owned banks cannot be insulated from judicial review when taxpayer funds are at stake. While recognising the principle of commercial wisdom, the court observed that such discretion must ultimately serve public interest rather than private advantage.

The court issued notices to the Union government, Punjab National Bank, Bank of Maharashtra and Asian Hotels North, seeking detailed responses on how the settlement was reached. The matter stems from a challenge to a November 2025 Delhi High Court order that dismissed a public interest petition seeking an investigation into the settlement involving the luxury hotel.

The petitioner, Infrastructure Watchdog, has argued that the banks bypassed mandatory auction procedures despite loan exposure crossing regulatory thresholds. According to the plea, Reserve Bank of India guidelines require stressed assets above ₹100 crore to be auctioned to ensure transparent price discovery, particularly for high-value properties in prime urban locations.

During the hearing, the Centre submitted that recoveries had been made and pointed to the pandemic’s severe impact on the hospitality sector. Counsel for Asian Hotels said the property had been declared a non-performing asset and that operations were crippled during Covid-19, making repayments unviable at the time.

The bench, however, questioned the timing of the settlement, noting that it was finalised in 2025, when hotel occupancies and revenues had rebounded. The judges observed that if assets appreciate after being classified as NPAs, lenders have a duty to explore mechanisms that maximise recovery. The court asked banks to place records of any failed auction attempts on file.

The petition also alleges that the hotel’s valuation declined sharply despite recovery in Delhi’s real estate and tourism markets. It further raises concerns over dilution of guarantees and potential diversion of funds linked to other hotel projects. While these claims remain contested, the court indicated that such allegations cannot be brushed aside when public funds are involved.

The Delhi High Court had earlier warned against routine judicial interference in banking decisions, citing risks to financial stability. The Supreme Court, however, signalled that restraint does not extend to overlooking possible opacity in settlements involving state-owned lenders.

Beyond the legal dispute, the case highlights broader questions about urban financial governance. Prime hospitality assets shape city economies, land use, and sustainability outcomes. How public banks resolve such exposures has implications not just for balance sheets, but for transparency, equitable growth, and public trust in urban financial systems.