The police, however, claimed that the rally had been called off after the Jagrut Orissa Kamdar Manch expressed satisfaction with the action taken against the unit-owners who lynched an Oriya youth caught with stolen weights.

Meanwhile, police bandobast, including mobile vans, has been increased in Pandesara, where angry workers had tried to set fire to a couple of powerloom units on Saturday evening after damaging nearly a dozen vehicles parked in the Jalaram Industrial Society.

All the units in the society and nearby Hari Iccha, Saikrupa, Mahalaxmi, S K Nagar, Hari Om, Ganesh, Vishal, Satyanarayan societies, among others, were closed on Monday. Reports said the units would remain closed for more time.

``We don't want the issue to become a major labour and law and order problem,'' said Assistant Police Commissioner M B Pethani. Additional Police Commissioner H P Singh said some people had gathered on the Udhna-Magdalla road in the morning but were chased away by the police.

Earlier, heavy police presence marked the spot where the proposed rally was supposed to begin. Though the rallyists were not expected to assemble there in the first place, the police did not want to take any chances.

In another development, two more workers were arrested in connection with the rioting on Monday, while more than 500 wanted in this connection were absconding. All the 15 powerloom owners and supervisors, who were arrested for offence under section 302, were remanded to two days' police custody.Meanwhile, the labour department has decided to survey the powerloom units from Tuesday following complaints of largescale exploitation and irregularities.

Deputy Labour Commissioner D K Patel said most powerloom units were registered under the Shops and Establishment Act instead of Factories Act, which made the commissionerate's job difficult.