Dawood Ibrahim's hotel auction: Rounaq Afroz issue back to square one

Jan 08, 2016, 10:54 IST | Varun Singh

Saifee Burhani Upliftment Trust, the second highest bidder, will have to wait for a fresh auction after former journalist S Balakrishnan failed to pay the bid amount for underworld don Dawood Ibrahim's eatery

Former journalist S Balakrishnan, who was the highest bidder for Dawood Ibrahim’s property, has turned up with empty pockets, and is unable to pay Rs 3.98 crore, which was the balance amount due for the Bhendi Bazaar property — Rounaq Afroz.

The hotel owned by Dawood Ibrahim at Bhendi Bazaar. File pic
The hotel owned by Dawood Ibrahim at Bhendi Bazaar. File pic

While, this development ensures that Balakrishnan loses his deposit of R30 lakh, it spells bad news for Saifee Burhani Upliftment Trust (SBUT) that is redeveloping Bhendi Bazaar. The SBUT was keen to purchase the property, as it is located at a crucial junction of the area. With the winning bidder unable to pay up, the SBUT will have to wait for a fresh auction, as there is no clause in the auction that allows the second highest bidder to stake claim if the first bidder defaults.

Ashvin Shah, the auctioneer said, “The amount deposited will be forfeited, and there is no clause that the second highest bidder gets the right to stake claim. However, SAFEMA can decide on its own.”

The SBUT had bid Rs 2.52 crore in the e-auction and Rs 1.72 crore in the tender, and Rs 4.27 crore in the public auction.

‘Will wait for property’
A senior functionary from the SBUT said, “We wanted this property as it falls in our redevelopment zone. However, we couldn’t get it, because the other bidder bid more than us. Now, when we see all this, we have nothing much to say, we will wait for whenever the property is auctioned again.”

The government had attached Hotel Rounaq Afroz after the 1993 Mumbai serial blasts. The auction was carried out by a private firm called Ashvin & Co Auctioneers, under the instructions of the Competent Authority & Administrator, the Smugglers & Foreign Exchange Manipulators (Forfeiture of Properties) Act 1976 [SAFEM (FOP) A] and the Narcotic Drugs and Psychotropic Substances Act. Despite repeated attempts there was no response from SAFEMA.

‘Government can turn the property into a police chowky’
S Balakrishnan, as president of an NGO, had bid Rs 4.28 crore for Rounaq Afroz, a hotel belonging to Dawood, located at Pakmodia street.

S Balakrishnan had won the bid on December 9 at an auction held at the Hotel Diplomat
S Balakrishnan had won the bid on December 9 at an auction held at the Hotel Diplomat

He claims that people did not help him financially fearing the gangster, and he got few days to collect the money. He had paid a deposit of Rs 30 lakh that he stands to lose.

‘People didn’t contribute’
The highest bidder of all the three methods, Sealed Tender, Public Auction and e-Auction, was to pay the balance of the bid amount within 30 days from the date of auction. However, Balakrishnan had claimed that he got few days, because of the festive season. “I had less than 30 days with me. There were festivities and I was expecting people to contribute. But it seems even big industrialists got scared and didn’t contribute. I was even threatened by people for participating in the auction. I had a lot to tackle and hence was seeking an extension. But they have been non cooperative,” he said.

He further added, “I request the government not to hold any further auction of this property, instead, to convert it into a police chowky that will help. I will think that the forfeited amount collected by us has been put to some public use.”

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