South Mumbai's iconic Rhythm House gets a new owner under insolvency auction

Rhythm House, the iconic music store in South Mumbai’s cultural and heritage precinct Kala Ghoda, has found a new owner. Bhaane Retail, a subsidiary of Shahi Exports, India's largest apparel manufacturer, has emerged as the highest bidder for the property in an insolvency auction with a Rs 30-crore offer.

A cultural landmark since the 1940s, Rhythm House was a favourite haunt for music lovers and Bollywood icons including Kishore Kumar, Shammi Kapoor, Dharmendra, Nargis and AR Rahman before closing its doors in 2016 after nearly 70 storied years.

It was previously owned by fugitive diamond merchant Nirav Modi.

In February 2020, the National Company Law Tribunal (NCLT) ordered the liquidation of Rhythm House, which had been seized by the Enforcement Directorate (ED) in 2018 during its investigation into the Punjab National Bank scam involving Modi.

Following a court order, the ED released the property to allow banks to sell it and recover their dues from Modi who defaulted on a Rs 6,500-crore loan from PNB using fraudulent letters of undertaking (LOUs).

ED has seized assets worth an estimated Rs 2,600 crore belonging to the fugitive businessman.

Modi acquired Rhythm House building in 2017 through his company Firestar Diamond from its previous owners, the Curmally family, for Rs 32 crore. He was planning to transform the heritage property into a luxury jewellery showroom.

Following the news of the property’s attachment, Anand Mahindra, chairman of the Mahindra Group, had proposed a plan to acquire Rhythm House through crowd funding.

"We can confirm that Bhaane Retail, a subsidiary of Shahi Exports, has successfully secured the purchase of Rhythm House and an office space in a recent auction. We have completed our due diligence and plan to expand our retail presence in the city. As private companies, we are unable to comment on any financial information regarding the bid," said a Bhaane Group spokesperson.

According to property consultants, the property may fetch lease rentals of in the range of Rs 900-1,000 per square foot a month, given its marquee location and cultural status and the prime location.

Shahi Exports' promoter family was in the news recently after they purchased an eight-storey residential property in London's Notting Hill neighbourhood for $27 million.

Rhythm House spans around 16,000 sq ft and includes a ground and a mezzanine floor with both retail space and storage areas.

Global celebrities who have visited the music store include members of rock band The Police, Pandit Ravi Shankar and Zakir Hussain. The store was as famous for its Hindustani and Carnatic music collections as for the western genres.

It closed in 2016 due to the challenges posed by new technologies and piracy. The store's owners decided to shut down after efforts to adapt to the changing landscape, such as adding electronic accessories and video games, proved unsuccessful.