Four agricultural land parcels of Dawood Ibrahim were up for auction in Mumbake village, Ratnagiri, Maharashtra.
The properties, with a reserve price of Rs 19 lakh, were seized under the Smugglers and Foreign Exchange Manipulators Act.
The smallest land parcel, which had a reserve price of ₹ 15,440, was sold for ₹ 2.01 crore to lawyer Ajay Srivastava.
Mr Srivastava intends to convert Dawood's property into a Sanatan Pathshala (school).
While two of the four properties did not receive any bids, a plot with a reserve price of ₹ 1.56 lakh was sold for ₹ 3.28 lakh.
The auction was a result of Dawood Ibrahim's designation as India's most wanted terrorist.
Former journalist S Balakrishnan criticized the auction process, calling the reserve price insignificant.
S Balakrishnan lost a bid on Dawood's restaurant in 2015 due to inability to deposit money on time.
The government refused to extend the deposit deadline for Balakrishnan under the Smugglers Act.