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HC clears deck for divestment in ITDC hotels

The Madras High Court Thursday vacated its order restraining the Centre from proceeding further with a proposal to sell its stake in two India Tourism Development Corporation hotels in Tamil Nadu.

Lifting the interim stay, a division bench comprising Chief Justice B Subhashan Reddy and Justice K P Sivasubramaniam, however, said the sale of the hotels would be subject to the final outcome of separate writ petitions filed by employees of the two hotels.

The injunction was issued by the bench last month on the petitions challenging the validity of a scheme, under which the ITDC's proposed demerger of eight hotels, including the two in Tamil Nadu, in the first phase under section 391 of the Companies Act.

The hotels are Hotel Madurai Ashoka Private Ltd, Madurai and Temple Bay Ashok Beach Resort at Mamallapuram, near Chennai, proposed to be sold to Sangu Chakra Private Ltd, Tiruchirappalli and M G Thangamaligai Private Ltd, Chennai respectively.

The petitioners contended that besides the future of the employees being in peril, ITDC under the guise of divestment as handing over precious hotel properties allegedly for less than the market value.

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