Nagpur, Dec 20: The Maharashtra government has decided to go slow on the politically sensitive issue of sale of land by textile mills in Mumbai. The government has sought additional time from the Board for Industrial and Financial Reconstruction (BIFR) and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) to lift the ban imposed on Shriram Mill for carrying out land development activities under its rehabilitation package.

Top sources told The Financial Express that the state cabinet which discussed this issue decided to defer its decision to avoid the Election Commission's wrath. "The lifting of ban may be seen as an offering of gift especially at the time of general elections," the sources added.

The government had rushed a request letter to the BIFR and AAIFR on December 18 an the next hearing was slated for December 22.

Had the government not sent this letter seeking more time, it would have led to a contempt and it would have had to face action under section 33 of the Sick Industries Companies Act.With this, the Kamala Mill, Raghuvanshi Mill and Swan Mill will have to further wait for lifting of the ban. The government has imposed a ban on February 29, 1996 on land development by these mills as it formed a high-level committee to prepare a report on integrated development of textile mill land area. The previous Congress government had cleared the proposals by these mills to sell land under rehabilitation package approved by the BIFR.

The Rs 57.48-crore rehabilitation package of Shriram Mills was cleared by the AAIFR on October 11, 1994. The then state government had approved the Shriram Mills plan under the Development Control Rule 58(1)(a) for the development of 1,20,000 sq ft floor-space-index (FSI).

According to sources, Shriram Mill has allegedly rented its building premises to a company for office and other use without seeking proper permission from the government. The textile department is believed to have called for action against the mill for violation of rules.

The urban development department has probed the alleged violation and is likely to take action soon.

Moreover, the sources said that though the BIFR has cleared the rehabilitation package under 58(1)(a)(iii) for the development of an additional 28,000 sq mt area, the mill should have sought the government's approval under 58(1)(b). Under the Development Control Rule 58(1)(b), the mill will have to surrender one-third each land to the municipal corporation, Maharashtra Housing and Area Development Authority and use the remaining for sale.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.