There were no bidders for the 42.49 acre of Hukumchand Mill land before the debt recovery tribunal (DRT), Mumbai, on Wednesday. The next date for auction has been fixed for November 17, said sources familiar with the development.
The failure of any party to bid for the land is mainly due to the controversy related to ownership of land. Even though a single bench of the MP High Court had ruled that the land did not belong to the state government and it belonged to the Indore Municipal Corporation, the state government, though the industries department, has once again staked claim to the land and had gone against the auction saying that it could not be done without their consent.
According to labour union leaders, this development also means that the dream of the 6,000 odd mill workers to get their dues from the proceeds of the sale of mill land is receding. The mill workers have been fighting for their rights for the past 23 years. As of now around 6,000 employees has pending dues of Rs 229 crore.
DRT has set reserve price of Rs 400 crore for the auction, even though the market price (according to guideline rate) of mill's land is around Rs 1600 crore. As per the rule, any individual/institution had to deposit 10 per cent of reserve price (`400 crore) to take part in the auction process.
One of the reasons for the lower fixed price is that the land is classified as industrial land and the market price being quoted is the prevailing commercial rate.
Employee union of Hukumchand Mill had challenged the auction in High Court on the ground that DRT has set lower reserve price of the land for auction. The unions also feared that amount would not be sufficient to pay pending dues of Rs 387 crore of banks and Rs 229 crore of employees.
Hukumchand Mill, Indore, has taken three loans total of Rs 80 lakh in 1981 from a private bank. In 2001 loan with interest and default interest had gone up to Rs 2.17 crore.
After few years, pending amount rose to Rs 200 crore, according to a report of the bank submitted to DTR and as of date bank claims to have pending dues against that loan amounting to Rs 387 crore. To recover this amount, bank was auctioning the land through DRT.