BANGALORE: Two properties owned by Abdul Karim Telgi, main accused in the multi-crore stamp paper racket, are being auctioned by the Income Tax Department on October 20.

In February this year, the department, which has to recover Rs. 11. 85 crores from Telgi, for the period 1996 to 2003, put up three properties for auction after taking written consent from him to recover the dues through their sale and that of other properties in his name in Mumbai and Khanapur in Belgaum district.

The February auction had not evoked an encouraging response; and only one of them, the Green Halgh building, located on Palace Road, was picked up by Mac Charles Pvt. Ltd., a concern of Le Meridien Hotels, at a reserve price of Rs. 1.43 crore.

S. Palani, Tax Recovery Officer of the Income Tax Department's Central Range-I here said the other properties — Azad Point, with a reserve price of Rs. 2.71 crores, and Corporation building number 100, with a reserve price of Rs 2.42 crore which found no bidders then — would be put up for auction again on October 20.

Though the number of defaulters, whose immovable assets could be auctioned to recover dues, runs into hundreds in Bangalore alone, Telgi's case is perhaps the only one that has attracted public attention.

The last such auction related to a case against the Wadiyar family about a decade ago.

The IT Department had decided to auction the properties to recover tax arrears of Rs. 11.85 crores from 1996 to 2003 — tax, fine and penalty — due from Telgi who has disputed it. Telgi claims he owes only Rs. 2.36 crores in dues.

Telgi had moved the Karnataka High Court, seeking a stay order against the February auction, but the court declined to grant his plea. Telgi contended that he had last filed his tax returns on December 29, 2003, declaring an income of Rs. 38.35 lakhs.

With no bidders for the other two properties, the IT Department had postponed the auction and it had been scheduled for October 20, Mr. Palani said.

Telgi had told the court he had no objections to the department auctioning these two properties. He sought the court's intervention in preventing the Palace Road property from being auctioned, claiming that the proceeds of auction of these two would enable the department to recover the dues.

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