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Workers of Mahendra Mills may get dues after over a decade

BS Reporter  |  Mumbai/ Ahmedabad 

The plot of Kalol-based Mahendra Mills Ltd, which went into liquidation over a decade ago, will now be auctioned at base price of Rs 130 crore and the proceedings will be used to pay the outstanding due of the mill workers.

The Gujarat High Court has agreed to the sale of the total land of the mill admeasuring 1.57 lakh square metres proposed by the Official Liquidator (OL). Accepting the OL’s report, Justice R M Chhaya has asked him to issue advertisements next week and bids would be opened before the company court on March 1, the day of auction.

Besides this the court has also agreed to auction of movable property in the form of machinery with a base price of Rs 75 lakh.

Advocate for Textile Labour Association, Dhimant Vasavada said that if the amount is realised, as many as 1,650 workmen may get their pending dues. He said that till date, only 8.86 per cent of total dues have been paid to workers.

Mahendra Mills went into liquidation in 2001. The high court ordered the official liquidator to initiate the procedure to sell its land. In 2002, the mill’s property was valued at Rs 31 crore and the land was expected to fetch minimum Rs 24 crore.

The property could not be sold following which the official liquidator published advertisements for the second time in 2004. But no offer was received. The third attempt to liquidate the property was made in 2005, and the highest offer from a firm – Devganga Traders Golden Transport — was Rs 102 crore. The deal with Devganga was called off by the high court for technical reasons and the firm was even fined Rs 15 lakh.

First Published: Mon, January 28 2013. 00:25 IST