Shops rented out by Cuttack Municipal Corporation at Choudhury Bazaar in Cuttack. Pictures by Badrika Nath Das

Cuttack, June 22: Cuttack Municipal Corporation has decided to act tough with defaulting tenants of shops rented out by it.

Officials of the corporation have told rent-evading occupants that if they didn’t clear dues, stringent action would shortly be taken against them.

Municipal commissioner Gyanaranjan Das today told The Telegraph: “There are a large number of occupants who have not been paying rent. We have issued notices in connection with rent arrears of almost Rs 91 lakh.”

“The defaulting tenants have been warned that eviction proceedings will be initiated if they don’t clear dues within a month,” he said.

The civic body has been in a quandary over collection of rent for shops across the city. Non-payment of rent by a large number of tenants has been taking a huge toll on the civic body’s earnings. Rent arrears against shops have mounted to nearly Rs 1 crore.

Notices have been issued to 350 shop occupants over the past week for non-payment of arrears. The civic body had rented out some 800 shops in 28 places across the city.

Sources in the standing committee for licence and appeal said the civic body could not collect the arrears as the original allottees had transferred the shops on mutual agreement to other persons in most cases. In many cases, arrears were mounting as the present occupants refused to pay rent till allotments are transferred in their name.

“The situation warrants not just recovering of arrears. Regularisation of tenancy position of shops is also vital,” said deputy mayor Ajay Barik.

The regularisation process is necessary for rent revision, which is very essential as the monthly rent for the shops continues to be as low as Rs 100 in many cases.

Officials in the civic body estimated that rent revision by adopting government rates based on present market value could fetch the municipal corporation at least Rs 1.5 crore a year. Rent collection from shops in the last four fiscals has been not more than Rs 20.50 lakh per year. In 2013-14, it was just Rs 20.06 lakh.

Two years ago, the civic body had started the process of promising present occupants to transfer allotment of shop in their names if they clear arrear rent dues and pay the transfer fee along with an affidavit by the original allottee in the form of a consent. But corporation officials conceded that little success was achieved in this drive for regularisation of tenancy position through transfer process as occupancy of shops had in a number of cases changed several hands. In several cases, death of original allottees posed hindrance.