The imposing Hotel Shalini Palace, a heritage structure steeped in debt, will soon go under an auctioneer's hammer, a top official said.
The palace hotel has been taken over by Mumbai-based Saraswat Cooperative Bank Ltd, and its operations shut Dec 13, bank chairman Eknath Thakur confirmed.
"We had given the hotel management time to clear dues, along with interest and penalties, but they could not do it," Thakur told IANS.
Two years ago, the hotel management was similarly threatened with auction for defaulting on dues which are currently pegged at Rs.35 crore, Thakur revealed.
Spread over 12 acres of lush greenery on the edge of the Rankala Lake, the structure is currently owned and managed by the Chougule Group, said an official who requested anonymity.
Saraswat Bank and United Bank of India are understood to have extended a loan of Rs.60 crore to the hotel management, which has defaulted on repayment.
Thakur said that the auction proceedings will be initiated within a fortnight.
Hotel Shalini Palace was built by the Chhatrapati clan, who ruled large parts of Maharashtra. Construction work lasted four years, and the palace was ready for use in 1932.
The final cost was a king's ransom in those days: Rs.8 lakh.
The palace was named after Princess Shaliniraje, daughter of then rulers of Kolhapur, Chhatrapati Shahaji II Puar Maharaj and Queen Pramilaraje.
Princess Shaliniraje was the mother of Chhatrapati (Dilipsinh) Shahu Maharaj, the present royal resident of the town, which once served as the capital of the family's erstwhile kingdom.
The four-km long picturesque Rankala Lake was used by tourists for boating.
The palace is marked with breathtaking arches and a prominent clock tower, all carved black stone.
Its massive wooden doors and windows are decorated with Italian stained glass, and floor has smooth Italian marble, and there are chandeliers big and small in the different rooms.
In the 1960s, the erstwhile rulers who owned the palace decided to hand it over to Mahatma Phule Education Society (MPES) which started a college. The MPES, with its meagre resources, could ill-afford the huge maintenance expenses.
In 1971, the Kolhapur Municipal Council (KMC) explored a bail-out package, including clearing Rs.14 lakh due to the Kolhapur District Cooperative Bank.
This would have given the KMC control over the palace premises, plus another three acres of land adjoining the building.
Unfortunately, old timers said that for over a year, there was no consensus on the proposal. While some groups wanted the palace to be taken over by the KMC and converted into a museum, others said it would be a white elephant, eating civic body resources.
In 1972, the KMC was upgraded to a municipal corporation, and the palace proposal went into cold storage.
In the late 1980s, the well-known Chougule Group of Maharashtra bought the property and started the state's first - and only - heritage luxury hotel; the college shifted to a suitably modest building.
Hotel Shalini Palace, which once offered business travellers a taste of regal life, now stands at a crossroads.
Kolhapuris wonder what might become of the building. Will it stay a luxury hotel or will it become private property?