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Charge Arun Shourie Over Rajasthan Palace Hotel Sale, Court Tells CBI

Laxmi Vilas is a five-star hotel on the banks of the lake Fateh Sagar

New Delhi:

One of the grandest palace-hotels in Rajasthan was grossly undervalued and sold at a huge loss to the taxpayer and former Union Minister Arun Shourie should be charged for it, a special CBI court has said. In a corruption case involving the sale of Laxmi Vilas Palace Hotel in Udaipur, the court has asked for criminal cases against journalist-politician Arun Shourie, former bureaucrat Pradeep Baijal and hotelier Jyotsna Suri.

The court wants the hotel sale case to be reopened.

“I have not seen the order, advocates will examine the order and then we will decide what to do next,” Arun Shourie said on the special CBI court order.

Hotel Laxmi Vilas was valued at over Rs 252 crore but was sold for Rs 7.5 crore, said the court, on Arun Shourie’s watch as Disinvestment Minister in the Atal Bihari Vajpayee government.

The Laxmi Vilas Palace, a spectacular five-star hotel on the banks of the lake Fateh Sagar, is a massive draw for tourists.

The CBI had filed a closure report in late 2019 saying there was “no evidence” in the 2002 case. “It is concluded that evidence worth launching prosecution was not found in the entire process of disinvestment of M/s Laxmi Vilas Palace Hotel, Udaipur,” the agency said.

But the special court in Jodhpur rejected the report and ordered further investigation. The CBI has sought legal opinion.


“Advocates will examine the order and then we will decide what to do next,” Arun Shourie said

According to the investigating agency’s report, accessed by NDTV, the disinvestment of the government-run luxury hotel “resulted in wrongful loss of about Rs 143.48 crore to the government and corresponding wrongful gain to the accused persons individually/jointly”.

But the agency pinned the blame on the valuation done by a private firm, Kanti Karamsey. The CBI said the property was undervalued at Rs 7.85 crore and based on this valuation, the reserve price was fixed at Rs 6.12 crore.

“During the course of the investigation, we had reevaluated the property through the Income Tax Department and it was valued at Rs 193.28 crore. Undervaluation of the property by Kanti Karamsey and company led to the loss to the exchequer,” sources in the agency told NDTV.

The CBI registered a case on August 13, 2014 on the basis of a preliminary inquiry that alleged that Pradeep Baijal had abused his position as Secretary, Disinvestment, in the Laxmi Vilas hotel sale.

But after the CBI’s closure report last year, the court said: “The unknown officers and private persons indulged in this conspiracy from 1999 to 2002 to cause loss of money to the government. The land was valued at Rs 45 per square yard. Even a spoon in the hotel would be costlier than that.”

Laxmi Vilas palace originally belonged to the former kings of Udaipur. During the accession of princely states, the massive property was handed over to the government. After independence, the government ran it as a hotel. In 2002 it was disinvested and bought by the Lalit Suri group of hotels.

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