HC orders wind-up, end of the road for Dunlop

KOLKATA/HOOGHLY: Tyre-maker Dunlop India's tenuous existence after years of battling debts and litigations ended on Thursday with a wind-up order from the Calcutta high court.
A liquidator appointed by the high court will now take control of the assets and account books of the 87-year-old company, which set up its first factory at Sahaganj in the Hooghly district in 1926.A single-judge bench of Justice Sanjib Banerjee held the Pawan Kumar Ruia-promoted company's management responsible for its present fate—DIL owes over Rs 1,000 crore to creditors, who have been filing wind-up petitions since 2008 to realize their dues.
Sources in the management said the company may appeal against the order before a division bench. But a bulk of the 750-odd employees of the Sahaganj unit welcomed the verdict because it paves the way for their statutory dues to be cleared. Most of them are due to retire by 2015 and didn't anyway expect a future with the ailing DIL. DIL led the tyre-manufacturing industry for decades—the memorable catchline, ‘Dunlop is Dunlop: Always Ahead' mirroring its phenomenal success—but its graph started declining since the '90s. In 2005, the Ruia Group took control of DIL from Manu Chhabria.
State labour minister Purnendu Bose said the government will now have to take a policy decision on whether it will bid for the company's assets when they are put on the block. The Sahaganj plant stands on a 200-acre lease-hold plot owned by the state. The company also owes the state government about Rs 50 crore. Bose said the government will play a "proactive role" in ensuring that the DIL employees' dues are cleared. "I am yet to receive a copy of the order," he said. "I can only say the government will play a proactive role in the liquidation process. We have to take a policy decision on DIL. The WBIDC (West Bengal Industrial Development Corporation) may make a bid during auction."
Bose endorsed the claim by workers that the company had moved out assets after it stopped production since October 2011 but stopped short of validating their estimate that the assets were worth Rs 2,300 crore. The minister has already sought papers of the 200-acre plot. "The industrial reconstruction department is yet to furnish the land deeds. I have asked for the records from the land collectorate," Bose said.
During the hearing, state advocate-general Anindya Mitra told the court the government hadn't claimed its dues from DIL in the interest of the employees. He also argued that the state wasn't in favour of the company's closure. DIL lawyer Utpal Bose said the company was making positive efforts to pay off dues to creditors and it needed some more time for the final settlement. The judge, however, wasn't convinced and passed a wind-up order.
The relief among DIL workers was palpable in the reaction of Adhesh Singh, who was among the hundreds that flocked to the factory gate after the court order. He said, "I've been working in this factory for the last 23 years. I don't think we can produce tyres with the kind of machinery and assets we are left with. I am ready to leave if the company clears our statutory dues as the court has directed."
Bidyut Routh, general secretary of the DIL worker's union affiliated to Trinamool's Inttuc, went so far as to call it a "historic judgment". "Workers were upset with the way Pavan Ruia was running the factory since October 2011. There was no production and salaries of workers had become irregular. The promoter, in the meantime, started moving out company assets. The DIL management was not keen on running the company despite all help from the state government," Routh said.
The Inttuc leader will call on Hooghly SP Tanmoy Roy Chowdhury on Friday with an appeal to deploy cops at the factory gates to stop more assets from being moved out.
Santoshree Chatterjee, leader of rival trade union Citu, urged the government and the Centre to help revive the company. "We tried to meet the CM and apprise her about the ground reality but she didn't give us appointment. Later, we met industries minister Partha Chatterjee. I would appeal to the state government and the Centre to help resume production of aero tyres," Chatterjee said.