On May 19, Dunlop had cited an AAIFR ruling of the previous day and issued a statement claiming that it no longer was obligated to clear its statutory dues from the funds that are to go into its revival plan.

However, according to a copy of the May 18 ruling, now with The Financial Express, it is evident that Dunlop has to follow the earlier order of March 12 and there is no exception. Under the revival plan drawn up by the Dunlop management, asset sales are expected to fetch Rs 110 crore and a rights issue Rs 26 crore.

A Dunlop spokesperson said it had issued the statement on the basis of its own interpretation of the May 18 AAIFR order.

In September 1998, when Dunlop had moved the AAIFR against a decision by the Board for Industrial & Financial Reconstruction, it hadundertaken to meet its statutory liabilities from the sale of non-performing assets.

Following this, creditor United Bank of India had filed a special leave petition in the Supreme Court against the order. The apex court referred the case to the AAIFR, but stayed the sale of assets.

Dunlop had moved the AAIFR seeking a direction to the BIFR to admit it under Section 17(2) of the Sick Industrial Companies Act. The AAIFR had done so, and noted in passing that Dunlop had agreed to clear its statutory dues.

In April, Dunlop rushed back to the AAIFR, claiming that its counsel's views had been incorrectly recorded by that body in its March 12 order. The tyremaker said it had never agreed to clear its statutory dues first.

Before the AAIFR could pass a judgment on the appeal, Dunlop petitioned the Calcutta high court against the AAFIR's March 12 order. The company spokesperson told The Financial Express that it moved the court because the AAIFR hearing was getting delayed.

The bone of contention waspara 6(a) of the AAIFR's March 12 order, which had said "...and utilisation of the sale proceeds for payment of statutory dues, due of Banks and workers dues."

Dunlop was challenged by other parties like United Bank, State Bank of India, Allahabad Bank, representatives of workers and employees unions, which "forcefully argued" that the AAIFR had correctly noted Dunlop's views in para 6(a).

On May 18, the AAIFR dismissed the company's appeal. "We do not see any need for making any amendment in our order dated 12.3.99," the order says. This was before the Calcutta high court heard Dunlop's appeal.

The Dunlop release of May 19 noted that, according to the AAIFR, "...it is no longer a stipulation to provide for upfront payment of statutory dues and dues to banks and workers out of the sale proceeds and the sale proceeds can be well utilised for restarting the operations in the factory".

In recent times, while the Supreme Court stayed the proposed sale of assets, Dunlop has appealed against all the orderspassed by the AAIFR and the BIFR.

Commenting on the plethora of appeals, working president A Sengupta of All India Union of Dunlop Employee Federation said that the management has no intention of opening the units which are lying closed for over 15 months now.

He pointed out that the management has neither called any tripartite meeting with the unions nor involved any of the state governments.

Dunlop, in its first appeal against the BIFR's admission of the company under Section 17(3) and not 17(2) of SICA, had promised to "utilise the proceeds for discharging the liabilities, priority being the liabilities to secured creditors."

In its latest order, the AAIFR bench had noted: "Neither in the order dated 16.9.98 nor in the order dated 12.3.99, there is any mention about the phasing of the payents to the creditors and the workers from the sale proceeds that may be realised from the sale of surplus assets and, incidentally, also the proceeds from the proposed rights issue."