No bid­ders as yet for King­fisher House, but e-auc­tions not easy

Buy­ers, too, need to do their due-dili­gence be­fore par­tic­i­pat­ing in e-auc­tions

HT Estates - - FRONT PAGE - Van­dana Ram­nani

The e-auc­tion by State Bank of In­dia of Vi­jay Mallya’s King­fisher House, the head­quar­ters of the de­funct King­fisher Air­lines, turned out to be a damp squib with no bid­ders. How­ever, e-auc­tions are not easy and re­quire days of plan­ning. Buy­ers too need to do their due-dili­gence be­fore par­tic­i­pat­ing in such bids and not be lured by the temp­ta­tion to strike bar­gains.

Lo­cated near the do­mes­tic air­port at Mum­bai’s Vile Parle area, King­fisher House is spread across a built- up area of over 17,000 sq ft. The base price of the mul­ti­storey prop­erty was set at ₹ 150 crore and it was be­ing auc­tioned by SBICAPS Trustee, a sub­sidiary of SBI Caps con­ducted on the e-auc­tion prop­erty plat­form by Auc­tionTiger.

Prospec­tive buy­ers will now be able to bid for the com­mer­cial prop­erty till April 4. The ac­tual auc­tion will be held on April 6, re­ports said.

But i s t he val­u­a­tion of ₹ 150 crore prop­erty cor­rect? Ac­cord­ing to San­jay Dutt, man­ag­ing di­rec­tor, In­dia, Cush­man & Wake­field, the price is fair but the first at­tempt at auc­tion­ing was not suc­cess­ful be­cause there was no suf­fi­cient in­for­ma­tion avail­able about the prop­erty. Nor was it mar­keted well. The fact is that it is a unique prop­erty and has retail and sig­nage po­ten­tial. Au­to­mo­bile com­pa­nies, banks, air­lines can con­sider it as it is a stand­alone prop­erty in the area. It also of­fers scope for fur­ther con­struc­tion.

SBI had ini­ti­ated the auc­tion to re­cover ₹ 7,000 crore owed by Mallya – de­clared wil­ful de­faulter – to a con­sor­tium of 17 banks. The auc­tion on Thrus­day, March 17, was con­ducted un­der the Se­cu­ri­ti­sa­tion and Re­con­struc­tion of Fi­nan­cial As­sets and En­force­ment of Se­cu­rity In­ter­est Act, 2002. As per the pub­lic no­tice for e- auc­tion, King­fisher House also comes with an out­stand­ing prop­erty tax of ₹ 67 lakh which is yet to be paid. While this was an e-auc­tion for a com­mer­cial prop­erty, banks also e-auc­tion res­i­den­tial prop­er­ties from time to time. Peo­ple bid­ding for such prop­er­ties should en­sure they do not get stuck with un­clear le­gal ti­tles.

When do banks e- auc­tion prop­er­ties? If the bor­rower fails to hon­our a loan, banks start the le­gal process and re­pos­sess the prop­erty and later sell it through e-auc­tions. Usu­ally if the bor­rower de­faults on his loan for six con­tin­u­ous months, he is given a 60- day no­tice pe­riod. Banks can then is­sue an­other 30-day no­tice pe­riod and in case the money’s still not re­paid the loan is de­clared part of the bank’s non- per­form­ing as­set (NPA).

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