The Maharashtra government proposal had suggested that since the millowners got the land at throwaway prices in the 1950s, they must compensate the government and the workers. The government wanted some land back so that the Maharashtra Housing and Area Development Authority can build some low-cost housing. The government, according to labourminister Shabbir Sheikh, had suggested that the management hand over a quarter of the land to the government, and another quarter to the workers, leaving the management itself in possession of just half the land.

But now the workers of the mill and the management appear to have come to an agreement under which the workers will forfeit their stipulated due of 25 per cent of the land in favour of the management to strengthen the mill, so that the revenue generated can be ploughed back into the unit itself.

Sheikh told The Financial Express: "I am not aware of any such agreement, but if the management and the workers have reached an agreement of this nature it will be termed illegal because the government has made its own proposal with regard to the sale of the mill land." The agreement signed between the management and the Rashtriya Mill Mazdoor Sangh says: "RMMS will cooperate for the land development proposal of Swan mills in obtaining necessary permission and no-objection certificate from variousgovernment and municipal authorities and other concerned bodies."

According to Sachin Ahir, the general secretary of the union, "The agreement, along with the current VRS proposals, were arrived at as early as 1986 but the management got the money to implement it only now. And the agreement is a positive approach on the part of the workers, subject to the condition that the money received from the sale of the land will be ploughed back into the mill itself." The agreement between union and management says: "RMMS shall give full cooperation for implementing its modernisation plans for which the necessary agreement shall be made. It is also agreed upon that Swan Mills (will) be free to dispose of the presently surplus machineries and other scrap material lying in the compounds of all its three units in Mumbai...". Further, the management will be free to dispose of any machinery which may become superfluous after the implementation of the agreement and after modernisation. The scrap generated from time to timemay also be sold by the company at its discretion. Meanwhile, a Voluntary Retirement Scheme (VRS) has been launched by the Swan Mills management at its Sewree and Kurla units in Mumbai.