Dunlop India to Retain Factory Land – For Now

Dunlop India’s battle to retain a legitimate claim to a piece of land at its factory in Ambattur, Chennai has been given a boost by a decision made by a district court in Chennai. The court has ordered that, for the time being, the land seized by real estate company VGN Enterprises should remain in the hands of the tyremaker.

The court official, Ponneri executive magistrate and revenue district officer, M.S. Sangeeta, said in an interim order that “the impugned land should be placed in as-is-where-is condition without any change, construction, removal of machinery or apparatus and [the] status quo should be maintained.”

This interim order lends weight to the Ruia group’s argument that the sale of 60.86 acres of factory land to VGN Enterprises in 2004, a transaction made by Dunlop India’s previous owners, was illegal.

Initially, Dunlop argued that India’s Board for Industrial and Financial Reconstruction – a government committee set up to revive “sick” companies – only approved the sale of unused land and thus the sale of the contentious eight acres within the existing factory premises was legally questionable. The company later hardened its stance and said the entire sale was illegal as a prior permission was not taken from the government in the factory’s home state of Tamil Nadu.