Dunlop India disputes its land sale

Chennai: Even as it is finding it difficult to roll out tyres from its Chennai plant, Dunlop India Limited is getting embroiled in a land dispute with Chennai-based real estate company VGN Enterprises.

The dispute concerns a small portion of the 60.86-acre plot that was auctioned off by Dunlop India under the Board of Industrial and Financial Reconstruction (BIFR) rehabilitation scheme way back in 2004.

While the tyre manufacturer contends that the land in question could not be sold under the BIFR scheme, the buyer V N Devadoss, who is the managing director of VGN Enterprises, that is planning to develop the land into an integrated township, asserts categorically that Dunlop India has no right over any part of the plot bought by him.

He cites the title deed, court cases settled in his favour and the affidavit filed by Dunlop India in court in support of the surplus land sale to him.

Referring to the press release issued by Dunlop on Monday, 30 July, Devadoss urges the company to desist from issuing misleading and defamatory statements against him and VGN Enterprises. "I am the lawful owner of the property and not an encroacher or miscreant." He says that his company was building a boundary wall around the property when Dunlop India raised objections.

In its press statement Dunlop India had said, "Some 150-odd miscreants stormed the factory site with bulldozers, demolished a part of the boundary walls, uprooted number of trees inside the premises and forcefully claimed a part of the factory land including the raw material storage area to be their property."

Listing out the chronology of events connected to the land sale, D Pratish, director, VGN Enterprises, says, Dunlop India was declared a sick company by BIFR in 1998 and as a part of the rehabilitation package it decided to sell surplus assets.

In 2001 it decided to sell 60.86 acres on as- is- where- is basis and in 2004, it invited bids for the sale of the land, where Devadoss says, his company was the highest bidder at Rs24.34 crore.

In June 2004 Dunlop India, executed the sale deed and affirmed that it had given vacant possession and in August same year all the title documents- patta, chitta and adangal- were issued in favour of Devadoss by the revenue authorities.

The sale deed was registered on 17 June, 2004, with Dunlop India being represented by director Ram Gupta and company secretary Ashok Kumar Agarwal, who continues in that post.

Even when Dunlop Factory Employees Union filed a writ against the company and Devadoss challenging the land sale, Dunlop India filed a counter affidavit stating that the land was surplus to its needs and physical possession had been handed over to the buyer on 17June, 2004, itself. The Madras High Court dismissed the union''s petition in December 2004.

In August 2006, Devadoss had obtained an interim injunction before the district munsif court at Ambattur, Chennai, against Dunlop India''s employees union to not interfere with the peaceful possession and usage of the land rights to the plot. And, on 30 July, 2007, a resolution was passed by the union not to impede or affect the peaceful possession / development of the property.

Given this position, Pratish wondered as to how Pawan K Ruia, chairman, Dunlop India, had issued as statement saying that ''miscreants'' had demolished part of the factory compound wall and forcibly claimed part of the land on Monday.

To a query whether he would prefer a defamation case against Dunlop India, Devadoss said that such an action would serve no purpose.

Interestingly enough, Dunlop India is now disputing the sale of some portions of the land, saying that it was not surplus and nor was it unused.

Meanwhile, Dunlop India Limited has decided to file a case against a VGN Enterprises for encroachment into its Chennai factory.

The company had registered a police complaint on 30 July, 2007, and also issued a press statement saying that miscreants had demolished part of the factory compound wall and forcefully claimed a part of the factory land.

Contending VGN Enterprises'' statement that Dunlop India has no right over the 60.86 acres it had sold for Rs24.34 crore in 2004, vice president corporate communications Dhrubajyoti Nandi argues, the BIFR scheme was for the sale of the surplus and unused land whereas the buyer has demolished part Dunlop''s building where raw materials and finished goods are stored. "When a building is used as a storage house it cannot be termed as surplus and unused." However, he says that the company is not disputing the entire sale transaction but only the small portion of the land.

He says Devadoss is claiming part of land inside Dunlop India''s factory premises as his. "He should have followed due legal process to get us to vacate the disputed plot." Nandi also wondered why VGN Enterprises took such a long time in building the compound around the property that it claims to have bought in 2004.

Counters Pratish, "Let them show their ownership over the land. It was Dunlop India that termed the land including the now disputed part as surplus and unused. The land was demarcated and sold to us and it is our will and pleasure to decide as to what we would do with the property and when."

He seems to have a strong point. When the asset sales committee appointed by BIFR decided to float a tender for sale of 60.86-acre surplus land, Dunlop India''s Chennai factory was shut down. The company in its press statement stated that, "It may be recalled that after remaining closed for more than 6 years, the Ambattur plant had resumed operation from 27 August 2006…."

Trying to allay the impression that Dunlop India actually was not interested in pursuing tyre production and would ultimately sell the plant land (around 30 acres) as real estate, Nandi says, "The company is in the business of manufacturing and not into real estate business." But the industry observers feel that the happenings at the plant point otherwise.

It may be recalled the Kolkata-based Ruia group acquired Dunlop India and its plants in Kolkata and Chennai from the Jumbo group in 2005.

Attempts to restart production last August at the Chennai plant were unsuccessful as the company encountered problems with the Tamil Nadu Electricity Board for non payment of dues.

After resolving the issue, Dunlop India says it would produce 50 tonne a day from this month onwards.

However, in its press statement issued on 30 July, 2007, Dunlop India had said that the incident on Monday at the factory site has made all plans look uncertain at the moment. The company has been preparing for resumption of production of 50 tonne per day from this August.