UP agrees on JK property sale

Revival of JK cotton in the works

The dispute between the Kanpur Development Authority and JK Cotton Mills, on the sale of a property of the JK group, has ended. The UP government has agreed on its sale by the group.

The property is the land where JK Rayon, owned by JK Cotton Mills, was located (closed since 1983). It is one of the three designated properties that are to be sold to facilitate the reopening of the mills, closed following a lockout since May 15, 1989, declared illegal by the UP government.

Earlier, the issue had been referred to the BIFR, which issued a revival package in November 2002, entailing a cost of Rs 108 crore. The plan was rejected as being unworkable.

The UP government has asked the Kanpur Development Authority and the company to sort out the matter.

Apart from the land of JK Rayon, measuring 90 acres, the other two properties are Lakshman Bagh, measuring 24 acres, and JK House on Barakhamba Road, New Delhi, built on over 10,000 square metres of land. They are to be sold for Rs 86 crore, to fund the revival plan.

The BIFR plan had been rejected by the industry department because of certain glitches. Also, in the opinion of the state government, the Lakshman Bagh property is not owned by JK Cotton, and therefore cannot be allowed to be sold.

A senior official of the industry department said the government had obtained the state Advocate General's opinion, and came to the conclusion that the Lakshman Bag property was not the JK's group's.

This view is not acceptable to the JK group, according to JK Cotton Managing Director Yadupati Singhania.

"If the government feels this property does not belong to the group, they should let us know in writing. We have been paying taxes on this property for the past 50 years," he said.

The Delhi property is sub-judice at the Supreme Court.

Another controversy concerns the money these properties are likely to fetch once they are put up for auction. The JK group feels since the state government did not permit the sale of the properties earlier and two years have elapsed, another Rs 25 crore will now be required to restart the mills.

The group contests the assessment of Rs 250 crore for the properties of Lakshman Bag and JK Rayon done earlier by the Kanpur Development Authority. However, the amount has been scaled down to Rs 140 crore, of which Rs 77 crore is the circle rate for the land of JK Rayon.

Green signal

• The property is one of the three designated entities to be sold to facilitate the reopening of the mills, closed following a lockout since May 15, 1989
• Earlier, the issue of the sale had been referred to the BIFR, which issued a revival package in November 2002, entailing a cost of Rs 108 crore
• The BIFR plan had been rejected mainly because the Lakshman Bagh property was not owned by JK Cotton, and therefore cannot be allowed to be sold
• Apart from the land of JK Rayon, the other two properties are Lakshman Bagh and JK House on Barakhamba Road, New Delhi