The auction of commercial properties held by the Chandigarh Housing Board flopped with just two booths finding any takers on Wednesday. A total of 145 booths, bay shops and a restaurant site were to go under the hammer.
The two properties that were auctioned fetched a little over the reserve price. The CHB auction of booths held in 2009 had also flopped with no property being auctioned.
Among the booths that were auctioned was one in Sector 38 (West). This fetched Rs 61.13 lakh, just Rs 25,000 more than the reserve price. Another booth in Manimajra fetched Rs 60.25 lakh, which was Rs 27,000 more than the reserve price.
The rest of the properties did not find a single bidder. The auction was scheduled to be held from February 5 to 7. However, on the first day itself, the response was pitiable. The booths have been lying vacant for the past decade.
The CHB officials who were conducting the auction initially started the bidding announcing one site each. However, with no response being received, all the booths in each sector were taken up at once. The process ended shortly after it had started.
Several reasons were given for the flop show. According to one, traders were not keen on buying property on a leasehold basis. All the booths available were on leasehold basis. Also, service tax was to be charged this year as per directions of the Central Excise and Taxation Department.
Kamaljit Singh Panchhi, president of the Property Federation Chandigarh, said, “The auction was going to flop, it was inevitable. No one is interested in purchasing property on a leasehold basis. On leasehold property, the owner is required to pay ground rent and property tax every year. This time 12.5 per cent service tax was also to be charged. Apart from this, the collector rate is very high. We have requested the administration time and again to convert property into freehold. However, no action has been taken.”
Similar views were expressed by chairman of Chandigarh Beopar Mandal Charanjeev Singh. “There is a need for the administration to change its policies. People will not want to purchase leasehold property as 2.5 per cent ground rent has to be paid every year. People are interested in purchasing property in Chandigarh. However, in this situation, there will be no takers even in the next four to five years.”
The maximum number of booths were up for auction in Manimajra, where 71 booths were present. A restaurant site in Manimajra was also to be auctioned. The other sectors where booths were up for auction were sectors 38 (W), 40, 49, 51 and 61. The CHB auction in 2009 had also met a similar fate. There were barely any takers then as well.
The CHB auction was held in order to assess the situation in the city before auction of other properties was planned. There were proposals for auction of property to be organised by the UT Estate Office in December last year. However, these were put on hold. With the CHB auction getting a poor response, it is not likely that the administration will give the go-ahead for another auction.
For all the latest India News, download Indian Express App nowFirst Published on: February 6, 2014 5:49 am