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How The Leela Group built its palace on the lake

The group's Captain Nair often resorted to unusual means to get his way, reveals a new biography

The Leela Palace, Udaipur
The Leela Palace, Udaipur (iStock photo)

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You can’t be a major hotelier and not have a presence in Udaipur. Moreover, you can’t be in maharana-land without a royal resort. But there already existed here the Taj Group’s ‘Lake Palace’, and the ‘Fake Palace’, which is what rivals had dubbed the Oberoi’s architectural extravaganza till Udaivilas began sweeping the top travel and leisure awards. The competition was enough to daunt the most undaunted of them all, namely Captain Krishnan Nair. Would he give in, give up and shift his Rajasthani dream elsewhere? Hadn’t Maharana Uday Singh himself surrendered Chittor to Sher Shah Suri in 1544, and begun work on a less vulnerable new capital in 1559?

Udaipur’s founder had been compelled to do so because his resources were exhausted from quelling the Mewar civil war. Captain Nair’s finances too were overstretched—by his own vaulting ambitions and the drain called HUDCO. He would have to ward off his old adversaries, the CRZ (coastal regulation zone) zealots and other NGO armies which would rise to defend the fabled Pichola Lake—built by a Banjara gypsy in 1362, and reinforced by Maharana Uday Singh exactly two centuries later. He would also need to deal with neighbours protesting the demolition of their ancestral homes. …

Udaipur had been part of Captain Nair’s dream quartet very early in his hotel game. No way would he have abandoned it. It was [his older son] Vivek [Nair] who found the way and location. As a member of the exclusive Young Presidents Organization Forum Group since 1987, Vivek was in Udaipur in 1993 attending one of its two annual retreats. The high-powered group stayed at the Palace Hotel and hired the Taj’s luxury boat, Gangaur, for the evening. During the cruise on Pichola Lake, Anand Mahindra had pointed to a garish pink structure on the shore, saying that he wanted to build a simple three-star hotel there as part of his time-share network. Then, changing his mind he sold the half-constructed property to Mumbai’s real estate baron Niranjan Hiranandani around 1994. What would be anointed the World’s Best Hotel in 2019, in Vivek’s words, ‘looked little better than a slum redevelopment housing colony’. But it was a eureka moment. He could barely wait to return home and tell his father about his find.

The cover of the book
The cover of the book

Alas, finders don’t automatically become keepers. Vivek bought the lakeshore property—and fell into hot water. There hadn’t been a squeak while the Mahindras and Hiranandanis were building their modest hotel, but as soon as the Nairs stepped into the picture, they were met with a flurry of PILs filed by two NGOs. Their charge that the Leela hotel in Udaipur would pollute the lake was ironic: in the midst of this litigation, Captain Nair was a guest of the maharana, invited to receive the Uday Singh Award for his stellar efforts at enhancing the environment. Udaipur was becoming Goa redux.

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The cases dragged on for thirteen years. The NGOs lost in the civil court and appealed against the order in the division bench of the Ajmer High Court, and lost again.

Through all this, the doughty warrior refused to budge. It was just like in Bangalore, where he dug in his heels despite everyone begging him to scale down his gargantuan hotel when the HUDCO fiasco plunged the company into debt.

In Udaipur, instead of letting go, he more than doubled his stake, extending the original 2.5 acres to 6. HLVL [Hotel Leela Venture Limited] was a listed company, and mopped up additional funds with a rights issue. However, the delay of fourteen years and the problems with the New Delhi hotel, also in the pipeline, pushed up the interest costs – and pressed hard on the company’s financial jugular.

The case finally reached the Supreme Court – and was dismissed in minutes. The law was on their side; so was the brilliant lawyer, Arun Jaitley. However, it was only then that they could start construction.

Or try to. The CRZ equivalent for lakeshores is 100 metres, but the Pichola’s historic status extended this to 150. Th e Taj could be the ‘palace in the lake’ because it had been converted from a royal indulgence built on one of the lake’s seven islands. The Oberoi’s spectacular Udaivilas, which came much later, was forced to stay outside the CRZ limit, and was thus the ‘palace away from the lake’. Leela could be the ‘palace on the lake’, because the Nairs slipped through the loophole that existing structures were exempt from the CRZ stricture.

The original shabby plot on the Pichola’s banks which they had bought from the Hiranandanis housed a tumbledown haveli, a portion of which abutted into the water. The Nairs built the terrace restaurant, Sheesh Mahal, atop its sunken column.

The next problem came with the trucks carrying construction material having to negotiate narrow lanes with old bastis and bustling bazars, that too only at permitted hours. The restive locals had to be pacified with the promise that the hotel wouldn’t harm their generational way of life; instead, it would increase livelihood thanks to guests in search of local colour and crafts.

Then came another unexpected blow. The heritage lake clearly couldn’t be used as a transportation thoroughfare for building materials. It was to be the main access and grand entrance for the hotel’s guests. But when the Leela Palace Udaipur was ready to open, the Pichola Lake had dried up. It was like the punishment of Tantalus in Greek legend, the succulent bunch of grapes cruelly just out of reach….

The hotelier hadn’t come this far to be denied what developmentwallas call ‘last-mile connectivity’. In this case, it was 1.5 acres. That’s how much he required to build a motorable road to his latest palace. And he had to acquire it stealthily. It was a seller’s market – the buyer was desperate, plus he presumably had a fat purse. So the Nairs resorted to the old Indian ploy of hiding behind a third, oft-times fictitious party. It was much like the young Mohan Singh mopping up the shares of the fabled subcontinental chain, Associated Hotels of India, by proxy and then presenting the all-Brit board with a fait accompli in 1923.

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Three houses had stood in the way of access to the almost complete Leela Palace Udaipur, and the negotiations got progressively tougher. It was a replay of the kind when the last Goan landlady of Candolim had held out against the inducements of the Taj when it wanted to extend its Fort Aguada hotel. Captain Nair finally got his road. So did all of Udaipur. Anyone could use it.

Excerpted with permission from Capture the Dream: The Many Lives of Captain C.P. Krishnan Nair by Bachi Karkaria, published by Juggernaut Books.

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