Bombay HC Clears Swadeshi Mills Revival and Chunabhatti Land Redevelopment
The Bombay High Court has paved the way for the revival of Swadeshi Mills Company Ltd and the redevelopment of its 48-acre land parcel at Chunabhatti in Mumbai. A division bench comprising Justices Ajey Gadkari and Kamal Khata permanently stayed a 2005 winding-up order on September 2, setting aside an earlier single-judge ruling that had refused to halt liquidation proceedings.
The court cleared a revival proposal backed by majority shareholders Grand View Estates Pvt Ltd and Forbes & Co Ltd, in coordination with the Rashtriya Mill Mazdoor Sangh (RMMS). Together, Grand View and Forbes hold a 53.25 percent stake in the company. The bench observed that the revival scheme serves the public interest and prioritises former mill workers who have endured substantial hardship for more than two decades.
Under the negotiated settlement, approximately 2,834 former workers are set to receive around Rs 223 crore in outstanding dues. This payout covers technical staff, substitute (badli) workers, and families of deceased employees, far exceeding the estimated Rs 74 crore they would have recovered through standard liquidation. Additionally, roughly 800 families currently residing on the Chunabhatti mill grounds are slated to receive free housing, while other affected workers will have access to subsidised housing schemes.
Grand View, which holds a 30.55 percent stake in the company, had previously deposited Rs 240 crore with the Official Liquidator. From that deposit, approximately Rs 169 crore has already been disbursed to nearly 2,000 workers. Under the approved terms, Grand View committed to immediate payments of approximately Rs 252 crore, which includes about Rs 237 crore earmarked for workers and related settlement liabilities.
The bench dismissed objections filed by two minority shareholders holding a combined 0.07321 percent stake who demanded a public auction of the land. The judges observed that their stake would amount to just Rs 2.19 crore even if the property fetched Rs 3,000 crore at auction, stating that two shareholders could not dictate corporate operations. The court also rejected their plea to restart textile manufacturing, terming the business commercially unviable in Mumbai after 99.85 percent of shareholders voted to amend company objects to real estate development. The bench also refused a request to stay the ruling for three weeks.
