Lily Products Limited

The management of M/s. Lily Biscuit Company Ltd. and the management of M/s Lily Barley Mills Ltd. were taken over by the Central Government u/s 18A of the Industries (Development and Regulation Act, 1951), on and from 27th March, 1979 which expired on the 26th day of March, 1996. The state government took over the assets and liabilities of Lily Biscuit Company (Private) Ltd. and Lily Barley Mills (Private) Ltd. under the provisions of the Acquisition and Transfer of Undertaking Act.1996 for the purpose of restructuring and rehabilitating the undertakings of Lily Biscuit Company (Private) Ltd. and Lily Barley Mills (Private) Ltd. so as to sub serve the interest of the general public by augmentation of the production and distribution of the aforesaid consumable articles. Subsequently, the undertakings of the said two companies were amalgamated as a new Government company as Lily Products Ltd. w.e.f. 1st day of June, 2004 vide Notification No. 511/PE/N/H/Lily/1M-2/2003 dated 6th August, 2004.

The land of the company is situated at two different locations

The leasehold right over the land, too, was automatically transferred in favour of the Government of West Bengal by virtue of the Lily Biscuit Company Pvt. Ltd. (Acquisition & Transfer of Undertakings) Act, 1996. At the time of acquisition of the company, the plant, machinery & buildings etc. were acquired by the Government but the status of the land remained unaltered. The Sett family was the original owners of the Lily Biscuits and Lily Barley Ltd. The same family was the owner of the factory land at Ultadanga and Barasat. The company was not the owner of the land. Two Lease Deeds were executed between the land owners i.e., the Sett Family and the Managing Director, Lily Products Ltd. on behalf of State Government,

It may be mentioned that 0.4701 acres of land at 19/1, Biplabi Barin Ghosh Sarani, Kolkata- 67, Ward No. 14 of the Kolkata Municipal Corporation was requisitioned through 1st L.A. Collector, Kolkata vide order no. 7/83/11/48 dated 27.05.1983 u/s 3(1) of the West Bengal Land (Requisition and Acquisition) Act, 1948 (West Bengal Act-II of 1948) in pursuance of the Notification No. 1975-L dated 22.11.63 published in the Calcutta Gazzette, Part-I of the 19.12.63 at page 2521 read with Notification No. 161-Estt/S.A.-4/82 dated 21.01.82 for the purpose of maintaining supplies and services essential to the life of the community and for increasing employment opportunities for the people by establishing commercial estate and industrial estate or for purposes connected therewith and incidental thereto.

With time the Government Company gradually failed to operate in the desired manner and it was decided to restructure the company along with certain other sick Public Sector Enterprises.

As a part of the 1st Phase of the Restructuring Programme which started in 2003, the Government decided to transform Lily Products Ltd., a PSE under the administrative control of Public Enterprises Department, to a Joint Venture with a Strategic Partner. But, two successive attempts to find a Strategic Partner through the standard procedure of inviting Expressions of Interest (EOI) through public advertisement and evaluation of bids received at the end did not succeed because of the non-availability of bidders.

Afterwards, an Early Retirement Scheme (ERS) was offered to the employees of Lily Products Ltd. in December, 2005 in response to which 139 employees of the Public Sector Enterprise availed of the scheme and left the company after getting their dues. But, nearly 100 employees did not opt for ERS and remained on the pay roll of the company. There was no production activity in Lily Products from 2005 onwards. At length, the matter was placed in the form of the below-mentioned proposal dated 02.04.2013 before the Standing Committee on Industries, Infrastructure and Employment of the Cabinet for its consideration:

"Operation of Lily products Ltd. a critically sick PSE may be formally closed followed by disposal of assets and redeploying the employees suitably in different departments / organization of the State Government."

The decision dt. 24.04.2013 of the Cabinet Committee was received in turn: The Lily Products Ltd. would be restructured keeping in mind the mismatch between land, plant & machineries and the workers. Restructuring of the industries should be done in such a manner that no jobs are lost, assets are used productively and at the same time the commercial interest of the government is fully protected.

In view of above, Government of West Bengal initiating proceedings for voluntary closure of the company. This process was involved
(i) completing all the legal formalities as per the relevant provisions of the Companies Act 2013,
(ii) assessing and disposing off liabilities,
(iii) disposal of assets, and
(iv) redeployment/ release of workforce.