The mill, renowned for its high quality and affordable sarees, had three plants when it closed down on April 1, 1997. While the main factory was situated at Byculla with 5,600 workers, some operations like dyeing and printing were being carried out at the Borivali plant with 700 workers. In '86, a factory had also been started at Mahad. The mills employ 7,000 workers totally.

According to sources at Rashtriya Mill Mazdoor Sangh (RMMS), the recognised union in the mill, trouble for the mill began in the late eighties when it failed to repay the loans it had taken over the years. Till date, the debt runs into Rs 67 crores. In '87, the State Bank of India took charge of the mill. After that several proposals from the BIFR and the SBI to revive the mill failed when the partiesconcerned failed to arrive at an agreement. Sources add that matters worsened with a feud within the Khatau family and the mill management's strained relationship with monetary agencies.

In the meantime, mill owner, Sunit Khatau, came up with a proposal to stop the Byculla plant and operate only from Borivali where the mill had 40 acres of land. The scheme was supported by the recognised union, and the then chief minister Sharad Pawar had also sanctioned the proposal. Sources say the government later changed its stand and on December 18, 1994, Pawar asked the mill to sell off its surplus land of 30 acres in Borivali instead.

There was another twist to the tale with the murder of Sunit Khatau by the Amar Naik gang on May 7, '94. In March '95, the Sena-BJP alliance took over the reins of the state and in the same month stayed the order passed by Pawar.

Months later, the BIFR sent a notice to the government asking it to take a quick decision on the mill or face legal action. On March 15, '97 the stay waslifted and 15 days later all the three units were closed after financial institutions refused to pump in money.

Although RMMS is the recognised union as per the Bombay Industrial Relations Act, the rival Girni Kamgar Sangharsh Samiti, claims allegiance of at least 4,500 workers in the mill. This union has demanded payment of full wages for the closure period.

The BIFR order today was supported by the mill promoter, Panna Khatau, RMMS and the state government. According to RMMS sources, the mill, which will in all probability operate only in Byculla now, will take at least two months to begin full operations. The workers will get 35 per cent of the salary for 30 months and bonus for three years. There is also a proposal to cut down on 1,500 workers with the help of a voluntary retirement scheme. of the Rs 102 crores needed for the revival, one-third will be contributed by the Khataus and Rs 37 crores obtained through the sale of the surplus land in Borivali. According to sources, film financier Bharat Shahhad filed tenders in '95 to purchase the 30-acre land, which had then cost Rs 80 crores. Today, two construction companies, Krishna Constructions and Fateh Nav Nirman, have sought to purchase the land.