‘Produce or surrender lands’ | SIDCO asks 74 ‘defunct’ industrial units

Deadline 1 month; Inclusion of sick, mortgaged units draws ire

JAMMU: The J&K Small Industrial Development Corporation (SIDCO) has issued notices to ‘defunct’ industrial units across Jammu and Kashmir divisions, to start production in a month or be ready to surrender their lands, while not considering the sick and mortgaged units, and a proper exit route for them.
“We have issued one-month notices to at least 74 industrial ‘defunct’ units in Jammu and Kashmir divisions, asking them to start production or surrender to us. The notice was issued by estate officers on different dates on the directions of the administration,” says Ravinder Kumar, IAS, Managing Director, SIDCO.
He adds, “Unit holders will have to give an Undertaking that they are going to start production within so and so time. If they fail to do as stated in the Undertaking, they will have to surrender the land to us.”
However, it has been reliably learnt that these 74 units, which have issued notices, also include sick and mortgaged units, besides the units which have failed to take effective steps to start working.
“Although it is justified to retrieve the land from units which haven’t placed order for plant and machinery or constructed the building, but continue to occupy the land, it is unsound on the part of authorities to ask a unit lying sick, mortgaged or closed, to start production in such short time or else surrender the land, which pushes them deeper into the hole of liabilities,” an industrialists told The News Now on the condition of anonymity.
Pertinently, the units get a provisional registration, valid till three years. Within two – two and a half year, owner should have placed the order for plant and machinery, has a structure for his industry, and gets permanent registration.
Otherwise, the unit is said to have not taken any effective steps, and SIDCO can rightly take back the land from them and allot it to another industrialist.
On the other hand, the sick, mortgaged or closed units were once working and having permanent registration, but failed to keep up with the production process due to multiple factors, one of them is a decline in government sales – the factor which helps most of the industries survive in J&K.
“Instead of rehabilitating sick units, authorities are harassing them with such notices. These units should have been provided financial support, after analyzing their cause of becoming sick,” says Lalit Mahajan, President, Bari Brahmana Industries Association (BBIA).
Ideally, if the industrialist is unable to run the unit, he should be given an exit route, such as disposing it off or auctioning it to another industrialist. One, it will clear the liabilities of the original owner; Two, a new unit can be started in the same land with existing structure and machinery.
“How is it legally possible to retrieve land from a mortgaged unit?” questions Lalit Mahajan.
Annil Suri, Former President, BBIA, Former Chairman, Federation of Industries, Jammu, calls it a vague order which will have implications.
Suri remarks, “If SIDCO takes back the land, plant and machinery, from a sick unit, how will the owner pay back the liabilities. If they want to take sick units back, they should take the liabilities too. It will free the entrepreneur of the liabilities and he will happily hand over his unit.”
According to MD SIDCO, there’s no point in keeping the land locked, when there’s no production going on. It is neither helping the unit holder nor SIDCO, besides preventing the interested investors.
“The whole process takes time. It is a month’s notice, but unit holders will reply to it, which will then be analysed for correctness,” says Kumar.