Harshad apartment auctions attract minimal interest

Less than half-a-dozen people have evinced interest in buying the eight apartments owned by the late Harshad Mehta and his family, partly due to a last-minute case filed by the stockbroker’s mother, Rasila S Mehta.

The bids for the apartments in sea-facing Madhuli Housing Cooperative Society in upscale Worli were opened by the custodian dealing with the 1992 stock scam. A public sector bank, a real estate agent and a diversified business group with interests in real estate, finance and power were present when the bids, submitted today, opened.

Also present at the custodian’s Nariman Point office was Sudhir S Mehta, Harshad’s brother and one of the owners of the eight flats. The bidders and the custodian refused to comment as the matter is sub-judice.

The downturn in the real estate market was cited as one reason for the muted response, but some of the potential buyers who had visited the premises last month were unable to present their credentials, a basic eligibility criterion for submitting bids.

Also, in the past those who have won the bids for scam-related properties have had to contend with long-drawn legal battles. At least 18 cases related to earlier auctions are pending, with some of them being contested in the Supreme Court.

In 2006, when the custodian had put the apartments on the block, only one bid was received and the process was called off.

The fate of the latest attempt to sell also depends on the Supreme Court, where Rasila S Mehta filed a case last week. The over 70-year-old housewife, who is now one of the 57 notified parties in the 1992 stock scam, wants to bid for the apartments using the funds that are locked up.

The plea was to come up for hearing on Monday but could not be taken up. Even today, the court could not hear the petition, which is now expected to come up tomorrow.

The bids opened by the custodian today, will be presented in the special court Friday.

The special court, which has received a valuation report on the properties which together have a super built-up area of over 12,500 square feet, may ask the bidders to raise their bids if they are below the assessed value. Rasila Mehta can only bid if she receives a Supreme Court clearance.

Legal sources, however, pointed out that that Rasila Mehta has no source of income. In the past the Mehta family has tried to argue that the property was bought before 1992 and was not financed through the scam-related funds.

Rasila Mehta is also the owner of flat number 31 in the complex which that has not been put up for sale. In fact two adjacent apartments (32A and 32B) were amalgamated with her flat. As a result, the custodian has told the bidders once the sale is confirmed by the special court, access will be provided in line with the court’s directives.

The value or appointed by the special court has directly submitted the valuation, based on prevailing market rates, the custodian can hope to garner around Rs 45 crore from the sale.

The tax department alone has claims worth around Rs 10,000 crore from the Mehta family, and claims arrears of around Rs 30,000 crore from scam-related cases.

So far, the custodian has only managed to realise a part of the dues through sale of the properties and shares of a host of companies, including some blue chips of the eighties.