Bombay HC Approves Swadeshi Mills Revival, ₹223 Crore Worker Settlement

The Bombay High Court has cleared the way for the revival of the iconic Swadeshi Mills Company Ltd, setting aside a single-judge order that had refused to halt the company’s winding-up. The court’s decision paves the way for a revival scheme backed by majority shareholders Grand View Estates Pvt Ltd and Forbes & Co Ltd, along with the Rashtriya Mill Mazdoor Sangh (RMMS).

The revival plan involves the redevelopment of the company’s 48-acre land at Chunabhatti in Mumbai. The court said the proposal was in public interest and would benefit thousands of former workers who have suffered for more than two decades. Under a settlement negotiated with the workers’ union, around 2,834 former workers are expected to receive about ₹223 crore in dues.

The amount is substantially higher than the estimated ₹74 crore they could have received through normal liquidation proceedings. The scheme also covers badli (substitute) workers, technical staff, and families of deceased workers. About 800 families living on the mill land are also expected to receive free housing, while others would benefit from subsidised housing schemes.

The court observed that the interests of workers deserved greater consideration, stating that apart from the workers, no other class of persons has endured tremendous loss and suffering for over two decades. The bench said it would be insensitive to disregard the entire settlement agreement arrived between the workers union, RMMS, and the appellants.

Grand View and Forbes together hold a 53.25% stake in the company, with Grand View holding 30.55%. Grand View had deposited ₹240 crore with the Official Liquidator, of which ₹169 crore has already been distributed to nearly 2,000 workers. Two minority shareholders, holding a combined 0.07321% stake, opposed the revival and argued that the mill land should instead be sold through a public auction.

However, the High Court was not convinced, noting that even if the land fetched ₹3,000 crore at auction, the minority shareholders' small stake would amount to no more than ₹2.19 crore. The court said their objections appeared to have more behind them than what meets the eye and observed that they were in all probability, a front to someone with an eye on the company’s land.

The court rejected the argument that the textile mill should be restarted, stating that operating a textile business in Mumbai was commercially unviable. The company’s revival plan is expected to bring relief to thousands of former workers and their families, who have been waiting for over two decades for a resolution.

The redevelopment of the 48-acre land at Chunabhatti is also expected to bring about significant changes to the area, with the potential for new housing and commercial developments. The court’s decision is a significant step forward for the revival of Swadeshi Mills and is expected to have a positive impact on the lives of thousands of people.

In conclusion, the Bombay High Court’s decision to approve the revival of Swadeshi Mills and the ₹223 crore worker settlement is a major victory for the workers and their families. The redevelopment of the mill land is expected to bring about significant benefits to the community, and the court’s decision is a testament to the importance of considering the interests of workers in such cases.

The decision is also a significant development in the context of Mumbai’s textile industry, which has been facing significant challenges in recent years. The revival of Swadeshi Mills is expected to bring about a new era of growth and development for the industry, and the court’s decision is a major step forward in this regard.

Overall, the Bombay High Court’s decision is a major victory for the workers and their families, and is expected to have a positive impact on the community and the textile industry as a whole.