While traders and shopkeepers joined the shutdown, working of the educational institutes, healthcare services and government departments remained unaffected.
The bandh call against the housing project, which is coming up in Raiya Dhar area, was given by Jupadpatti Mahaparishad (SJM) and supported by the city unit of Congress.
"Traders and shop keepers kept their shops closed in old Rajkot while shome shop keepers, who had opened their shops, closed them after our request in some areas in new Rajkot," said SJM leader Karnabhai Maldhari.
A police official said the bandh passed off peacefully.
The civic body was supposed to carry out its demolition drive to remove encroachments in the area, but put it off.
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