State, Goodlass brass meet today over unit closure

Maharashtra finance minister Jayant Patil stated that if the company is unwilling to restart operations, then the land which was leased to the company by state could be taken back.

The state move comes in the wake of the Mumbai High Court recently staying the closure of the company's Parel unit, ordered in May by labour commissioner N J Gajbiye.

The state government, at the instance of chief minister Sushilkumar Shinde (who met a workers' delgation on the issue), had sought a revival proposal from the company since it was a profit making unit and housed in Maharashtra for more than 80 years.

However, according to a government official: "The management has yet to submit any revival plant. We believe they are keen to relocate to another state."

Patil's statement assumes significance in wake of similar closures by several private mills in Parel district where one of the Nerolac units is housed since 1920.

According to the official while mill owners were permitted to sell their land in order to pay the workers' dues, this could not be applied to Nerolac's case.

"The mills were covered under a provision made to the Cotton policy of the state. Nerolac was leased the land for 'industrial use' and if the company now chooses to close down, the state may acquire the land from it," the official said.

Nerolac has around six acres of land in central Mumbai's textile region and another 22 acres of land in Thane district.

Following the closure order issued by the labour commissioner, Chaturvedi had sought to persuade the firm (Nerolac) against shifting out of the city.

During a meeting on July 21 this year, Chaturvedi asked company officials to come up with a revival proposal in two months.

"The company is making profits but unreasonable trade unionism is causing production problems in the Mumbai unit," he told Business Standard then.

According to Chaturvedi, the Nerolac unit that manufactures paints for various applications has seen it's Mumbai unit become a mill stone that is dragging down its profitability.

A labour department official said: "For instance some workers refused to shift from the segment that produces paints used for coloration of walls to he unit which produces coloration material for fast moving consumer goods such as fridges. Is this legitimate work behaviour?"