3 decades after Ponzi scheme bust, attached Vile Parle hotel on the block

Mumbai's VIP Palace Hotel, tied to a 1990s deposit scam, is set for auction with a ₹55.58 crore reserve price, nearly 30 years after being seized.

Mumbai: A crumbling hotel linked to an alleged high-profile deposit scam of the 1990s is finally headed for auction, nearly three decades after it was attached by authorities. The former VIP Palace Hotel in Vile Parle, once owned by late businessman Uday M Acharya, has been put up for sale with a reserve price of ₹55.58 crore.

3 decades after Ponzi scheme bust, attached Vile Parle hotel on the block

The auction is being conducted by the Competent Authority and Sub-Divisional Officer, Mumbai Western Suburb, under the Maharashtra Protection of Interest of Depositors (MPID) Act.

The property was attached following the collapse of C.U. Marketing’s investment scheme in 1999 after the Economic Offences Wing (EOW) arrested Acharya, the company’s director. Authorities alleged that the scheme cheated around 26,000 investors of more than ₹400 crore by promising unusually high returns.

Interested bidders have been asked to submit an earnest money deposit of ₹5.55 crore, equivalent to 10% of the reserve price by June 9.

The hotel, once known as VIP Palace Hotel, has long vanished from the site. Even the road on which it stands has changed names over the years - from Azad Road to Veer Makarand Ghanekar Road.

Officials said the property will be sold on an “as is where is” basis, meaning the successful bidder will also have to bear the burden of pending taxes, government dues and any related liabilities.

“The auction sale report will be submitted before the Special MPID Court, Mumbai for confirmation prior to completion of the final transaction,” an official told Hindustan Times.

This is not the first attempt to sell the asset. In 2016, the Income Tax Department tried to sell the hotel as part of recovery proceedings against Acharya, who reportedly owed around ₹779 crore in tax arrears. Though a bidder offered ₹28 crore against the reserve price of ₹27.43 crore, the transaction never materialised.

The latest auction is expected to revive efforts to monetise one of the most prominent assets seized in the long-running case and recover money linked to the alleged fraud.