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Bombay High Court Clears Swadeshi Mills Revival, Worker Settlement
The Bombay High Court approved a plan to revive Swadeshi Mills Company.
The plan involves redeveloping the mill’s land in Chunabhatti, Mumbai.
The court said the plan would help thousands of former workers.
About 2,834 workers are expected to receive around ₹223 crore.
This is more than the estimated ₹74 crore they might have received if the company had been liquidated.
Around 800 families living on the land may receive free homes.
Minority shareholders wanted the land sold at a public auction instead.
The court rejected that request and said the mill should not necessarily restart as a textile business.
The court also said the redevelopment plan was in the public interest.
The Bombay High Court permanently stayed Swadeshi Mills’ 2005 winding-up order on September 2, 2026.
The approved plan allows redevelopment of the company’s 48-acre Chunabhatti land in Mumbai.
About 2,834 former workers are expected to receive approximately ₹223 crore under the settlement.
Around 800 families living on the mill land are expected to receive free housing.
The court rejected minority shareholders’ demand for a public auction and opposition to the revival plan.
- Who
- The Bombay High Court division bench of Justices Ajey Gadkari and Kamal Khata, Swadeshi Mills’ majority shareholders Grand View Estates Pvt Ltd and Forbes & Co Ltd, and the Rashtriya Mill Mazdoor Sangh were involved.
- What
- The court overturned a single-judge rejection, permanently stayed the 2005 winding-up order, and approved a revival and redevelopment scheme.
- Where
- The case concerns Swadeshi Mills’ 48-acre property at Chunabhatti in Mumbai and was decided by the Bombay High Court.
- When
- The division bench issued its decision on September 2, 2026; the company was incorporated on September 13, 1886.
- Why
- The court found the proposal to be in the public interest and more beneficial to workers than liquidation, while considering textile operations in Mumbai commercially unviable.
Revival and redevelopment proponents
Minority shareholders seeking auction
Disposition of mill land
Revival and redevelopment proponents
The majority shareholders and workers’ union supported redevelopment through the revival scheme, which the court considered in the public interest.
Minority shareholders seeking auction
Two minority shareholders argued that the mill land should be sold through a public auction.
Benefits to workers
Revival and redevelopment proponents
Supporters said the negotiated settlement would provide about ₹223 crore to former workers, substantially more than liquidation, along with housing benefits for affected families.
Minority shareholders seeking auction
The minority shareholders opposed the revival proposal and challenged the basis for proceeding with it, though the court found their combined stake was only 0.07321%.
Future of the company
Revival and redevelopment proponents
The court accepted that real estate development was appropriate after shareholders amended the company’s objects with 99.85% approval, and said textile operations in Mumbai were commercially unviable.
Minority shareholders seeking auction
The minority shareholders had opposed the revival and sought to prevent the scheme from proceeding, including requesting a stay to approach the Supreme Court.
Key facts
- Worker settlement
- About ₹223 crore for approximately 2,834 former workers and related worker groups.
- Liquidation comparison
- Workers were estimated to receive a maximum of about ₹74 crore through normal liquidation.
- Mill land
- The revival plan covers 48 acres at Chunabhatti in Mumbai.
- Housing provision
- Around 800 families on the mill land are expected to receive free housing; others may receive subsidised housing.
- Majority stake
- Grand View Estates and Forbes & Co together hold 53.25% of the company.
- Existing deposit
- Grand View deposited ₹240 crore with the Official Liquidator, with about ₹169 crore distributed to nearly 2,000 workers.
- Earlier proceedings
- The High Court ordered winding-up in 2005, while a single judge rejected the revival proposal on February 23, 2026.
Quotes
Bombay High Court division bench
The division bench of Justices Ajey Gadkari and Kamal Khata hearing the Swadeshi Mills revival case
“It would be insensitive to disregard the entire settlement agreement arrived between the workers union, RMMS and the Appellants.”
freepressjournal.in
“At present, apart from the workmen, no other class of persons has endured tremendous loss and suffering for over two decades.”
freepressjournal.in
Sources
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