Chandigarh, June 20
The Chandigarh Administration stands to recover a whopping Rs 37 crore from members of the public who, in the past decade or so, had first bid for commercial or residential property in auctions conducted by the Estate Office and then failed to pay a major part of the money which they promised to while bidding for the site to get an allotment letter.
All the while the buildings, located in prime locations across the city, have been put to use either for residential purposes or businesses are being run by landlords or have been rented out for several thousand rupees each month.
As per a highly confidential list of the Chandigarh Administration, dug out by Chandigarh Tribune through sources, there are 196 defaulters who owe money to the Chandigarh Administration.
The list, updated till May end this year, says that 22 people owe more than Rs 15 lakh. And another 14 landlords owe between Rs 10 lakh and Rs 15 lakh. Another 64 landlords, including 11 residential plot owners, owe between Rs 2 lakh and Rs 10 lakh each. The total recovery stands close to Rs 37 crore.
Interestingly, from people who bid for commercial sites in Sector 8 and then defaulted, the Administration has to recover a whopping Rs 3.13 crore.
On the other hand, in some cases the Estate Office has no record of the pending payments. Specific instances are in the case of a commercial building in Sector 17 and another one in Sector 26.
Officials of the Estate Office were tight-lipped about the issue, which Chandigarh Tribune team had been trailing for the past four months. No official wants to go on record about anything that has to do with the pending recoveries.
Explaining the system of auction a source said at the time of the bid a bidder has to pay a fixed percentage of the bid money that is about 10 per cent. Following which the first of the four installments have to be paid within 30 days and the other installments are paid within three years.
From here starts the recovery of money. The Administrative machinery moves at a slow pace to issue several showcause notices before taking any action like resumption of site or cancellation of site.
The role of the lower level staff which deals with the files and issues notices is also under cloud as several properties have not been resumed even though the owners have not paid up.
“It is almost like a legalised loot by circumventing the legal framework,” said a source while informing that a simple thing like computerised record of the defaulters and the sum outstanding against their respective names is not available with the Estate Office. In case of the 196 pending cases some of them are as old as 15 years and hearing drags on while rents are being collected.
The entire business of not paying money also affects the tenants in these buildings. Invariably tenants spend several lakhs doing up the interiors and when the building is resumed for non-payment, the tenants are declared illegal occupants. The non payment issue is also partly linked to the falling markets during the past four years.
Rentals have dropped and income from buildings is not as expected by the landlords. The rate of interest has also been jacked up. Earlier it was just 7 per cent but is now it works out to be close to 34 per cent on defaulted payments.
Sources, said if a owner does not pay, the resumption proceedings start and take up to two years, with the owner enjoying option of appeal against the order.
The appeals at various stages take up to two years more. By this time the defaulter has not only recovered his paid up money but has also made a fair sum.
Knowing someone in the Estate Office helps as resumption notice or a notice to pay the arrears can be held back by way of red tape or in the dusty files of the Estate office. This is very evident from the list as cases as old as five years of pending recoveries are common.
The Chandigarh Administration stands to recover a whopping Rs 37 crore from members of the public who, in the past decade or so, had first bid for commercial or residential property in auctions conducted by the Estate Office and then failed to pay a major part of the money which they promised to while bidding for the site to get an allotment letter.
All the while the buildings, located in prime locations across the city, have been put to use either for residential purposes or businesses are being run by landlords or have been rented out for several thousand rupees each month.
As per a highly confidential list of the Chandigarh Administration, dug out by Chandigarh Tribune through sources, there are 196 defaulters who owe money to the Chandigarh Administration.
The list, updated till May end this year, says that 22 people owe more than Rs 15 lakh. And another 14 landlords owe between Rs 10 lakh and Rs 15 lakh. Another 64 landlords, including 11 residential plot owners, owe between Rs 2 lakh and Rs 10 lakh each. The total recovery stands close to Rs 37 crore.
Interestingly, from people who bid for commercial sites in Sector 8 and then defaulted, the Administration has to recover a whopping Rs 3.13 crore.
On the other hand, in some cases the Estate Office has no record of the pending payments. Specific instances are in the case of a commercial building in Sector 17 and another one in Sector 26.
Officials of the Estate Office were tight-lipped about the issue, which Chandigarh Tribune team had been trailing for the past four months. No official wants to go on record about anything that has to do with the pending recoveries.
Explaining the system of auction a source said at the time of the bid a bidder has to pay a fixed percentage of the bid money that is about 10 per cent. Following which the first of the four installments have to be paid within 30 days and the other installments are paid within three years.
From here starts the recovery of money. The Administrative machinery moves at a slow pace to issue several showcause notices before taking any action like resumption of site or cancellation of site.
The role of the lower level staff which deals with the files and issues notices is also under cloud as several properties have not been resumed even though the owners have not paid up.
“It is almost like a legalised loot by circumventing the legal framework,” said a source while informing that a simple thing like computerised record of the defaulters and the sum outstanding against their respective names is not available with the Estate Office. In case of the 196 pending cases some of them are as old as 15 years and hearing drags on while rents are being collected.
The entire business of not paying money also affects the tenants in these buildings. Invariably tenants spend several lakhs doing up the interiors and when the building is resumed for non-payment, the tenants are declared illegal occupants. The non payment issue is also partly linked to the falling markets during the past four years.
Rentals have dropped and income from buildings is not as expected by the landlords. The rate of interest has also been jacked up. Earlier it was just 7 per cent but is now it works out to be close to 34 per cent on defaulted payments.
Sources, said if a owner does not pay, the resumption proceedings start and take up to two years, with the owner enjoying option of appeal against the order.
The appeals at various stages take up to two years more. By this time the defaulter has not only recovered his paid up money but has also made a fair sum.
Knowing someone in the Estate Office helps as resumption notice or a notice to pay the arrears can be held back by way of red tape or in the dusty files of the Estate office. This is very evident from the list as cases as old as five years of pending recoveries are common.
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