MUMBAI, Dec 23: The Appellate Authority against Industrial and Financial Reconstruction (AAIFR) has been forced to initiate contempt proceedings against state Chief Secretary S Subramanian and Textile Secretary Neela Satyanarayan for the failure of the Government to respond to its directive on the revival of the sick Shriram Textile Mills.

"Both S Subramanian and Neela Satyanarayan have been served notices under the Sick Industries Companies Act by the AAIFR. They were asked to present the views of the State Government on Shriram Mills' revival package. "However, in the absence of policy decision by the State Government, no statement could be made before the appellate authority," a senior official told The Indian Express.

This was for the second time in the recent past that top officials of the State Government were facing contempt proceedings for virtually ignoring the directives of the Board of Industrial and Financial Reconstruction (BIFR) or the AAIFR. Earlier, then Chief Secretary Dinesh Afzalpurkar was hauled up by the BIFR in connection with the case of Modern Mills.

Shriram Mills, with a total workforce of 4000, had approached the BIFR with a revival scheme, which envisaged winding up of major departments and a Voluntary Retirement Scheme (VRS). The unit had also proposed construction of industrial galas for raising funds for the revival of the mills.

After the BIFR rejected the proposal, Shriram Mills moved the Appellate Authority against Industrial and Financial Reconstruction with a fresh revival package. The management sought approval for disposal of 28,000 sq metre of additional surplus land to raise funds for payment under the VRS.

Disposing of the appeal, the AAIFR permitted use of surplus land for commercial as well as residential purposes. At the same time, the AAIFR asked the State Government to present its views on the revival package before the AAIFR before December 19, failing which it would face proceedings.

"The Government should have made its stand clear before the AAIFR since there were some basic faults in the revival package submitted by the sick unit. Under the development control rules, one can not get permission for developing surplus land for commercial as well as residential purposes. As such, the revised scheme is unacceptable to the government," the senior official said.

The official said it was unfortunate that despite several reminders, the government was unable to take a decision on the judicial orders. "If the order is not implemented, both the Chief Secretary and the Textile Secretary will be taken to task, not the Chief Minister," he said.

The official felt that serious differences between the Shiv Sena and BJP over disposal of surplus mill land has resulted in the unprecedented crisis before the textiles department.

"The order of the AAIFR has not come overnight. The first letter was received by the State some time in October. However, no serious thought was given to the warning. Even now also, no decision was taken despite the fact that a minimum of five cabinet meetings were held after the communication was received from the AAIFR," the official added.

Now, the government has taken the view that it was unable to take a decision in view of the Model Code of Conduct in force. "The department has now moved the Chief Electoral Officer as well as the Election Commission seeking its permission to clear the proposal," the official said.

"Again, this is time-buying tactics, while the elections were declared in the first week of December, the order of the AAIFR was received in October," the official said, adding, it was the responsibility of the government to implement the judicial orders irrespective of the fact that the code of conduct is in force otherwise.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.