Cuttack: With the state government depositing Rs 150 crore to obtain a permanent stay from the High Court on winding up of Orissa Textiles Mills (OTM), the liquidation process of the company is now likely to be reversed.
The Orissa High Court has fixed November 15 for deciding state government’s plea for a permanent stay of winding up of state-owned OTM at Choudwar in Cuttack district which was closed 31 years ago.
After the Official Liquidator informed the court that the state government has deposited Rs 115 crore in addition to the Rs 35 crore deposited earlier, Justice Arindam Sinha on Tuesday fixed the date.
The state government had on August 2 informed the High Court that it would no longer pursue the sale of the assets of OTM and the Handlooms, Textiles and Handicraft department is ready to put in Rs 150 crore for obtaining permanent stay on winding up of the company.
Justice Sinha allowed claimants of pending payments from OTM to submit their claims to the Office of the Liquidator before the next date of hearing. The Office of the Liquidator had earlier filed an affidavit indicating that the total dues that remain to be cleared by the state government was Rs 147.67 crore.
Of the total amount, Rs 97 crore and Rs 20.30 crore were dues of employees and Provident Fund respectively.
The liquidation process of OTM was started under the Company Judge of the High Court in March 2002 after the state government filed a petition for it after closing the unit in June 2001. The court had recalled the order for fresh auction of the company along with its assets on June 28, 2022 after several attempts to auction it off failed over the decades.
OTM was declared a sick industrial company in 1993 by the Board for Industrial and Financial Reconstruction (BIFR), which recommended a Rs 37.22 crore revival and modernisation package for the mill in 1998.
However, the government opted to declare closure of the mill when its worth went in the negative with accumulated loss of over Rs 100 crore and liabilities well over Rs 40 crore.
Set up in 1946 by Biju Patnaik and Pratap Singh, OTM had started commercial production in 1950, The company was taken over by the state government in 1981 after a lockout was declared by the private management.
