May 12: Following poor response to bids invited for disposing off residential property owned by Big Bull Harshad Mehta, the custodian appointed by the Special Court for handling the multi-crore security scam cases will shortly float fresh tenders.

The properties comprises flats in prime areas like the NCPA building at Nariman Point and the Gopal Mansion building near Dhobi Talao.

According to sources, only two bids were made for the 19 flats both of which were rejected by Justice S N Variava of the Special Court. Only one of the three flats in NCPA building could be disposed on a leave and licence basis with a purchase option after three years. The sole bid for the entire set of 19 flats at Gopal Mansion, by one Hemvijay Holdings Pvt Ltd, amounted to just Rs 3.01 crore. According to sources, Velvet Holdings, a Harshad Mehta-owned company, had paid nearly Rs 5 crore in 1990 for all the flats.

In other words the offer price for each flat was in the region of Rs 15.84 lakh. Not only did the custodian find this quote unacceptable, the second offer by one Arvind Ghaneriwal - Rs 40 lakh for any one flat in the same building was also rejected.

While two flats at the NCPA building measuring 2,880 sq ft and 3,475 sq ft respectively remain unsold, the third - flat No. 13 has been taken.

According to sources, the special court has passed an order clearing the bid by one Tarani Investments which proposes to take the property on a leave and licence basis with an option to purchase after three years. The investment company will pay an annual rent of Rs 20 lakh for three years beginning May 1997. At the end of this period, the company has an option to buy the flat measuring 2,880 sq ft for a sum of Rs 4.6 crore. The company has also provided an interest-free deposit of Rs 60 lakh which will be forfeited if it does not exercise the purchase option, according to sources.

The custodian's inability to sell the properties comes in the wake of a slump in the real estate market and the cash crunch which is severely affecting industry. While purchasers looking for bargains still buy residential and commercial properties, not all of the purchase price is paid by cheque. Property auctions conducted by govt agencies where the entire purchase price has to be paid in `white money' has fewer takers.

In February this year, the custodian had completed auctioning all the 19 cars owned by the stock broker.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.