The Samiti has also questioned the states move on March 10, 1998 to regularise the "illegal" structure carried out by the mill and called for its demolition. The petitioner said that the mill was granted permission for use of land for industrial purposes. It has, however, illegally converted the land for residential purposes.

"The state and cabinet have no powers to grant exemption to the mill nor does it have the power to legalise the illegal construction. If the construction is illegal, demolition has to be carried out," the Samiti said.

The body has alleged in a writ petition that the said regularisation was contrary to the Development Control rules and the Maharashtra Regional Town Planning Act. Thepetitioner has challenged the Appellate Authority for Industrial Finance and Reconstruction of November 7, 1996, for permitting the mill to sell/develop additional FSI/land and its closure.

The petitioner has also challenged the mills move to lease a large portion of the land to Reliance and other parties "with full knowledge of the state government." The petitioner said that appellate authority has "wrongly permitted the company to lease additional built-up area of about 8,000 sq ft to various parties at a monthly rate of Rs 100 per sq ft. The Rs 2.40 crore which was to be received every year was extremely low.

The petitioner said that the mill, with an installed capacity of 1,22,576 spindles, 1,449 looms and processing of 80,000 meters of fabrics per day, used to employ 4,000 employees before 1982. It became sick in 1987 and was referred to the Board for Industrial Finance and Reconstruction which sanctioned a revival package involving the sale of 1,20,000 sq ft on October 31, 1991. As per the scheme,the mill was allowed to operate with all its 4,000 employees.

The second scheme sanctioned by the appellate authority on October 11, 1994, permitted the sale of 1,20,000 sq ft., had a provision of closure of the weaving department, running of 40,000 spindles and processing of 50,000 meters of cloth per day. Only 1,400 employees were retained. Though the mill sold/developed excess of 1,20,000 sq ft. of land/FSI, the amount received was not used for revival/modernisation of the mill.

"The said amount was misappropriated by the promoters. Instead of prosecuting them, the authority allowed them to sell additional 28,000 sq mt of surplus land," the petitioner alleged and demanded that the authority be asked to initiate mispleasance proceedings.

A sum of Rs 86 crore was to be received from this sale which was to be used towards the repayment of the dues of banks and financial institutions. "The liabilities of various parties were either partly paid or not paid at all though large sums were received from saleof surplus land," the petitioner argued.

Under this scheme, only 25,000 spindles were to be in operation and the entire processing department had to be closed down. Additional land was proposed to be sold allegedly for raising funds for modernisation with only 85 permanent employees to be employed. Only 10 permanent workers were, however, working with no production being carried out.

The petitioner has demanded that the promoters be asked to restart the mill and employ at least 200 employees.