Noida’s Sector 18 market has witnessed impractical and failed bids for commercial kiosks in the past, prompting the Noida Authority to introduce a new requirement. Applicants who wish to bid for kiosks or shops now need to deposit three months’ advance rent as earnest money, according to sources familiar with the matter.
This earnest money will not be refunded to bidders who place “unrealistic” or “impractical” bids. The primary objective of this move is to ensure that only genuine bidders, who often get pushed out of the competition due to unrealistic bids, are allowed to participate in the bidding process.
Previously, in January, a tea and gutka (chewing tobacco) seller named Sonu Kumar Jha made headlines when he placed the highest bid of Rs 3.25 lakh per month for a 7.59 square metre kiosk in Sector 18. However, he later refused to take possession, citing a lack of funds. Kumar’s bid was exceptionally high, a whopping 1,203 percent higher than the base monthly rent of Rs 27,000.
An official from the Noida Authority explained that, until now, there was no earnest money requirement for bidding on small commercial kiosks. Applicants only had to deposit a processing fee of Rs 20,000 to participate. Unfortunately, this led to situations where participants would place impractical bids without any earnest commitment.
When the highest bidder was selected and an allotment letter was awarded, some bidders would back out at the last moment, citing financial constraints or an inability to pay the required rentals and security deposit upfront. Such practices disrupted the entire bidding process, forcing the authority to start the process anew.
To address this issue, the Noida Authority has decided to demand an earnest money deposit equivalent to three months’ rent for the kiosk, in addition to the processing fee. This deposit will be forfeited if a bidder cannot make the necessary payments. However, the earnest money will be returned to unsuccessful candidates within one month after the auction concludes.
In January of this year, the Noida Authority auctioned kiosk K-3, along with six others, as part of its “allotment of commercial kiosk” scheme in Sector 18. The base rent for these kiosks was set at Rs 27,000 per month. While Sonu Kumar Jha placed the highest bid at Rs 3.25 lakh per month, two other participants bid Rs 1.9 lakh each for the same kiosk.
As per the norms, the successful bidder is required to deposit 11 months’ rent and three months’ rent as a security deposit in advance to take possession of the kiosk within 60 days from the date of property allotment. In this case, Jha was expected to deposit Rs 45.5 lakh upfront to secure the kiosk, but he, along with the other two candidates, withdrew their bids.
Officials have indicated that these kiosks will be re-auctioned in the coming months, implementing the new earnest money requirement to ensure a more practical and efficient bidding process.