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23 Years On, MP Govt to Clear Salaries, Other Dues of Over 4,000 Ujjain Mills Workers

The top court also allowed simple interest at the rate of 4 per cent per annum for the period of non-payment of wages and other benefits, and 2 per cent per annum thereafter until the state government clears the payment.

Utkarsh Anand | CNN-News18

Updated:March 12, 2019, 8:16 AM IST
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23 Years On, MP Govt to Clear Salaries, Other Dues of Over 4,000 Ujjain Mills Workers
Illustration of Supreme Court. (Network18 Creatives)
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New Delhi: There is light at the end of the tunnel for more than 4,000 workers left to fend for themselves after their mills closed more than two decades ago. Twenty-three years on, the Supreme Court has directed the Madhya Pradesh government to pay their salaries and other outstanding dues to the tune of Rs 58 crore. The management of Ujjain’s Binod Mills owed the dues to the workers for the period between 1991 and 1996.

The top court also allowed simple interest at the rate of 4 per cent per annum for the period of non-payment of wages and other benefits, and 2 per cent per annum thereafter until the state government clears the payment. "The State Government is given a period of two years from the date of this judgment within which to pay-off the aforesaid sum to the workers," ordered a bench headed by Justice Rohinton F Nariman.

The court made payments to workers a pre-condition for taking over and putting to use nine hectares of land in Ujjain upon which the Binod Mills now stands closed. The state government's submission in the court has been that it wants to develop a 'Smart City' thereon after taking over the possession of the land.

The dispute pertained to whether the government had the right to re-enter the land by virtue of a lease entered into by the erstwhile Raja of Gwalior in 1912 which had stipulated that Binod Mills can remain in possession of the land till it paid rent to the government or it continued its operations. When the Mills stopped its operation in 1991, its management moved for winding up and official liquidator was appointed to receive all its assets, including the land.

This was objected to by the state government, which contended that the land had to come back to the state in terms of the causes in the lease. The High Court rejected the state government's plea, holding that the lease was in fact an irrevocable grant made in favour of Binod Mills and thus, the land now belonged to the Mills.

The state filed an appeal in the Supreme Court, which has now ruled that the original lease as well as MP Land Revenue Code made it clear that the state government had the right to take possession of the land even in case of failure of rent as well as upon closure of the Mills.

"This would show that this is a case of a Government lease and not an irrevocable Grant, as has wrongly been held by both the Single Judge and the Division Bench," according to the top court. It then permitted the MP government to take possession of the land within a week and utilise it for specific purposes on the condition of making payments to the workers.
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