Second Auction Notice for Defunct Assam Paper Mills Within One Month

Employees of the Nagaon and Cachar paper mills are still waiting for their dues.

Guwahati: The defunct Nagaon and Cachar paper mills of the government-owned Hindustan Paper Mill Corporation Limited (HPCL – previously declared a ‘miniratna’ public sector unit) have been put up for auction for the second time in one month. This time, the mills’ auction notice comes with a reduced auction reserve price.

The mills’ beleaguered employees, who haven’t been paid their dues ever since the suspension of the mill’s operations more than four years ago, have called this new second auction move “conspiratorial”.

The new reserve auction price has now been put at Rs 960 crore, a reduction of Rs 170 crore from the initial auction reserve price of Rs 1,139 crore.

The second auction notice was published through an advertisement in a national newspaper on June 21. The new auction date has been slotted for July 22.

On June 1, Kuldeep Verma, the liquidator of the corporate debtor, through an advertisement published in a national paper, announced the mills’ auction by June 30. The reserve price back then was put at Rs 1,139 crore, with an Earnest Money Deposit (EMD) of Rs 55 crore.

The auction was cancelled as no private bidder either deposited the EMD or submitted any documents by the stipulated date of June 15.

This time, Verma’s auction notice stated that the new reserve price has been set at Rs 969 crore with an EMD of Rs 48 crore.

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“The intending bidders should submit the evidence for deposit of EMD and request a letter for participation in the E-auction along with a self-attested copy of proof of identification, current address proof, PAN card, valid email ID and contact details to the address of the liquidator or by email at the address before six PM on July 6,” the advertisement said.

The Joint Action Committee of Recognised Unions (JACRU) of the Nagaon and Cachar paper mills said the new auction notice and the state government’s continuing lack of action in rescuing the mills’ employees have only added to their woes.

Photo: Gaurav Das

The JACRU on June 2 wrote to the new chief minister, Himanta Biswa Sarma, saying that the two mills have over 2,000 acres of land as part of their assets. It also said that since land is a state subject, it must be revealed whether the liquidator of the corporate debtor has obtained a no-objection certificate (NoC) prior to the auction notices.

“It is obligatory on the part of the liquidator to seek an NoC from the state of Assam, in our view. However, it is not known whether the said permission has been sought by the liquidator or not or allowed by the state government. If not, the state government has all the rights and jurisdiction to interfere in the matter to terminate the auction process. As per the law, the seller or the buyer of land is duty-bound to obtain an NoC from the state government through entrusted authorities,” said Manabendra Chakraborty, president of JACRU.

He added, “It is important to mention here that the mills’ land was allotted with the purpose of industrial development, socio-economic growth and employment generation. And if the purpose is to be diluted or diverted, the state has the right to take back the land at any point of time as the land is not for sale but for utilisation on special purposes.”

On June, 3 Sarma at a press conference in New Delhi sarcastically asked who will pay Rs 1,200 crore for the two paper mills. He also raised doubts about whether the mills’ machinery will be operational if the mills are revived.

He also joked that the auction notice made it seem like a house in Assam was on auction. “And who will take it in an auction? If someone took it in an auction it would good as we can work together to revive it. Auction notices keep popping up. These days I have observed that in the auction notice it is hinted that someone will take it. If it is taken, then it will be good. If a private person takes it then the employees’ issues could be solved. How the mills can be operated… I will talk about it. There are some plans, and I will discuss them later. I do not think the mills can be operated with the pieces of machinery. Basically, we are thinking about how the employees can get back their dues. And only after this we can talk about the mills’ revival. Who will pay Rs 1,200 crore? If a bidder comes forward, then I will personally welcome that bidder with a gamocha. There were many auction notices before. Previously I was not in the industry department,” he said.

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The Nagaon paper mill has been closed (without notice) since March 13, 2017, while the Cachar Paper Mill has been closed (also without notice) since October 20, 2015. Over 1,200 employees from the two paper mills are yet to be paid their remaining monetary dues which include pensions, salaries, provident funds, and others.

The total dues of the mills’ employees until December of 2019 was over Rs 620 crore.

On June 24, Satish Chandra Patowary, a 58-year employee who worked in the administration department at the Nagaon paper mill, succumbed to a heart attack. The total number of employees who have died ever since the mills’ suspension now stands at 90.

The mills’ union body states that most of the employees who have died could not afford proper medical treatment. Four employees have already died by suicide.

The two paper mills have been rendered defunct over the lack of working capital as HPCL owes an amount of Rs 98 lakhs as unpaid dues to Alloys and Metals (India), a company.

Contrary to Sarma’s comment, the mills’ machinery was modernised in 2005. The Cachar paper mill achieved full capacity production during the financial year (FY) 2005-06 and 2006-07.

HPCL was considered to be a profit-making and dividend-paying entity from 2005-06 to 2008-09, and also bagged the MoU Excellence Award from the Government of India for FY 2005-06 and 2007-08.