After one failed bid to auction the iconic 'Palais Royale' building in Worli, Indiabulls Housing Finance Ltd (IHFL) has announced fresh plans to auction it at a substantially slashed price, hoping to recover a whopping Rs 995 crore from the owners, the S. Kumar's fame industrialist Vikas Kasliwal.
On May 4, IANS had first reported IHFL's plans to auction the building in the upmarket Worli area, billed as India's tallest and most luxurious residential tower, on May 6.
However, there were no bidders for the reserve price of total Rs 783 crore fixed for the previous auction held on May 6, company sources told IANS on Saturday, requesting anonymity.
Now, the IHFL is making a second determined bid to auction the debt-ridden and litigation-hit property by slashing the reserve price to Rs 701 crore - down by nearly Rs 82 crore or around 11 per cent - in a bid to attract buyers.
Incidentally, this slashed reserve price would barely cover the principal loan amounts on six counts amounting to a staggering Rs 715 crore.
The total outstandings remain at Rs 994,61,64,531, plus pending TDS of Rs 1,66,17,445, due to IHFL from SRUIL and Kasliwal.
Going for re-auction are three specific assets of SRUIL, situated in the posh Worli area, which includes the property No.1, on which 'Palais Royale' - India's upcoming tallest and most luxurious residential building is also situated.
The new combined reserve price for these three properties is fixed at Rs 701 crore to be auctioned on June 24, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
The saga of Rs 3,500-crore 'Palais Royale', in which some of India's high net worth individuals, comprising big names from the business and glamour world, besides top professionals and NRIs, have booked super-deluxe flats, starting a decade ago, in 2009.
The country's tallest residential skyscraper, standing at almost 295-metres, on a 28,400-square metres plot, is expected to have more than 160 high-end apartments of which nearly 80 per cent have been sold out.
Later, there were problems with finances, a deal soured with another prominent realtor, serious lapses and illegal constructions detected by the BrihanMumbai Municipal Corporation (BMC), that put brakes on the progress of the project that was to be fully completed by 2012.
The IHFL had sanctioned total loans of Rs 915 crore to SRUIL, but in August 2015, a petition was filed in the court seeking to wind up the company.
In October 2016, an official liquidator was appointed and IHFL initiated proceedings to recover its dues from SRUIL.
A year later in November 2017, IHFL filed an application against SRUIL invoking the Insolvency and Bankruptcy Code before the National Company Law Tribunal, to initiate the corporate insolvency resolution process.
Irked by the huge delays, series of litigation in different courts, the flat buyers formed a 'Palais Royale Members Association' to recover their collective investments of around Rs 1,200 crore, sunk in the controversial project for so long.
The majestic 'Palais Royale' with a grand view of the Rajiv Gandhi Bandra Worli Sea Link and other prominent landmarks, has come up on the erstwhile five-acres Shree Ram Mills compound.
It followed the footsteps of many other defunct textile mills that have blossomed into mega-housing complexes, malls, entertainment zones, commercial plazas, thriving in the past couple of decades.
The 'Palais Royale' episode becomes the second major embarrassment for the reputed Kasliwal family after the recent collapse of the Reid & Taylor luxury brand - headed by Nitin Kasliwal (brother of Vikas Kasliwal) - which is now facing liquidation as a going concern, as per a February 5, 2019 order of National Company Law Tribunal, Mumbai.
Industry sources have predict that given the current dismal scenario in the Mumbai realty markets and elsewhere in the country, even the success of the re-auction attempt at reduced prices may be doubtful, given the messy nature of the project.
(Quaid Najmi can be contacted at email@example.com)
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