The Nagpur Municipal Corporation (NMC) decision to conduct an online auction of N Kumar’s Poonam Mall in Wardhaman Nagar did not receive a single bid. The civic body had put up the mall for auction to recover property tax dues of Rs 37 crore.
An NMC official told TOI that last date for bids will be extended. “This was the first time we conducted an e-auction and probably the valuation of Rs 66 crore was high. Last date for receiving bids was October 1, but there were none,” he said.
The mall was developed and being operated by Indo Pacific Infrastructure Private Ltd since 2013. It was in the news in August as a part of its roof collapsed.
As per norms, the NMC auctions properties for recovery of high or old dues. In the last couple of years, the civic body had auctioned around 100 properties of which sale deeds were executed in 15 cases.
The NMC had also registered its ownership on some properties which could not be sold despite being put up for auction repeatedly.
Indo Pacific had challenged the NMC’s auction in Nagpur bench of Bombay High Court on October 1. During the hearing held on October 3, judges RK Deshpande and Vinay Joshi said, “The proceedings for auction of the property may go on. However, the auction shall not be finalized until further orders of this court. Issue notice for final disposal of the matter, returnable on December 12.”
Kumar said that the auction would have received good response had it been “genuine property”. “The NMC had levied wrong and very high tax on which we had taken an objection. We had no tenants in the mall. Agreements with all occupants was on business-sharing agreement in which occupants do not pay rent instead give share from total sale. NMC started to levy tax on tenant basis which was very wrong. We are paying tax regularly,” he said.
NMC had started to levy tax on the mall as per owner occupancy from 2006. The state’s auditor general reportedly took objection for not levying tax as per tenant occupancy in 2015. Then, the NMC revised the tax to tenant occupancy and raised demand for difference amount between 2006 and 2013.
Before going for auction, the NMC sought other properties owned by Indo Pacific to avoid auction of Poonam Mall as it was constructed on land leased out by the Nagpur Improvement Trust (NIT). But it did not find any.
Following request of the company and to recover its dues, the NIT had also planned to auction the mall. But the plan was dropped and a proposal was prepared to allow the company to convert the mall into commercial complex-cum residential flat scheme. The proposal is pending with the state government.
IN A NUTSHELL
* Indo Pacific took lease of NIT’s land at Wardhaman Nagar for developing a shopping mall
*Poonam Mall was developed and started in 2006
*NMC started to levy property tax as per owner occupancy
*Citing AG’s objection, NMC revised tax to tenant occupancy
*Tax increased to a great extent and difference amount was also huge
*Arrears increased to Rs 37 crore
*NMC put up the mall for auction sale but received no bids
