MUDA’s lease extension despite pending dues raises eyebrows

Lessee defaults on payment for Nalwadi Krishnaraja Wadiyar Convention Hall; owes MUDA Rs. 51.64 lakh

By S.T. Ravikumar

Mysore/Mysuru: In what seems to be another addition to its series of controversies, Mysuru Urban Development Authority (MUDA) has opted to extend the lease of Nalwadi Krishnaraja Wadiyar Convention Hall at Hebbal for an additional two years, despite the lessee owing MUDA a sum of Rs. 51.64 lakh.

Constructed in 2019 at a cost of Rs. 5.5 crore, the Convention Hall on Dr. Ambarish Road in Hebbal’s Second Stage was part of MUDA’s initiative to provide an affordable venue to the public to hold private events and other functions.

MUDA had invited expression of interest from the bidders, following which Bengaluru-based Sarkar Constructions owned by one S. Siddarajappa was awarded the contract on Mar. 7, 2019, letting out the hall on a three-year lease for Rs. 36 lakh annually.

But the lessee Siddarajappa, after paying the lease amount of Rs. 36 lakh for the first year, later defaulted on payment for 2020-21 and 2021-22, citing loss of business due to COVID pandemic. He wrote to MUDA seeking extension of the lease by 5 more years and also to waive off the annual lease amount for the two years (2020-21 and 2021-22).

The MUDA, which discussed the request at its meeting held on June 22, 2022, resolved to waive off the lease amount and also to extend the lease by 2 more years. But subsequently it was discovered that the contractor Siddarajappa had defaulted on the lease and owed MUDA Rs. 51,64,285 despite the lease amount waiver of Rs. 72 lakh for 2 years.

As Siddarajappa failed to respond to the MUDA’s reminders for payment, MUDA Zonal Officer Sampath Kumar on Nov. 6, wrote to Siddarajappa warning that the MUDA will take over the property for violation if he failed to remit the outstanding dues of Rs. 51.64 lakh as on date.

MUDA had initially estimated that the lessee could generate an annual income of Rs. 1.80 crore by renting the hall to the public at Rs. 1.5 lakh per day. Despite the costs associated with power, water bills, tax and maintenance, the contractor was expected to have a net income of Rs. 1.2 crore.

It is surprising to note that the MUDA has thus far failed to take any action, when Siddarajappa is letting out the hall for rent for other commercial purposes in total violation of norms.

The public are wondering why MUDA is hesitant to take action against the contractor who is due to the tune of lakhs of rupees to MUDA. They also want MUDA to take back the hall to its custody and let it out at an affordable rent.