Mumbai: Auction of Kingfisher House, once the headquarters of Vijay Mallya’s defunct airline, proved to be a flop show on Thursday with no bids coming in, presumably due to litigation fears and a high reserve price of Rs 150 crore — dealing a blow to lenders’ efforts to recover their loans. The auction of the property, with a built-up area of over 17,000 sq ft in Vile Parle area near domestic airport here ended in about an hour with no success.
After the auction did not find any takers, State Bank of India has decided to re-auction the property after consulting real estate experts. An official from SBI involved in the auction process said, “We have decided to re-auction the property after consulting real estate experts, and the date for re-auction will be officially announced by the bank. The reason for not finding any takers could be because the pricing was decided by SBI representatives associated with the Bengaluru branch and they had no idea about Mumbai’s real estate market.”
Kingfisher House was taken into custody by SBI in February 2015, for non-payment of Rs 6,963 crore, of which, liquor baron Vijay Mallya is a guarantor. The SBI had last month announced that it will auction the said property under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), 2002, at a base auction price of Rs 150 crore, to which, real estate experts were sceptical, citing the quoted price of the property as overvalued. On top of all this, Kingfisher House also comes with an outstanding property tax of Rs 67 lakh.
Vikram Mehta, a real estate broker who deals with properties in Bandra-Kurla Complex, said, “In the current slowdown of market, I have a seller who is ready to sell his 9,500 square foot office space at BKC, quoting the rate of Rs 26,000 per square foot as there are no takers. In this case, we cannot expect Kingfisher House to be sold at Rs 90,000 per square foot.” According to real estate experts, one of the major reasons for there being no takers is the height restriction, as Kingfisher House is in the vicinity of the airport.
Meanwhile, Mallya sought time till April for making personal appearance before the ED, saying he will not be able to keep Friday’s date pursuant to the summons issued against him by the agency in the IDBI bank loan default case. ED sources said the agency may accept his plea and give him time to present himself, probably in the first half of April. The FM Arun Jaitley said that government will recover every penny which Mallya owes to state- run banks. He said that investigative agencies will take strong action against Mr Mallya.
