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Shut Down Over 3 Years Ago, Bihar's Jute Mill Slowly Turning to Ruins

Over 4,000 workers and farmers from several districts were dependent on the Rameshwar Jute Mill at Muktapur in Samastipur for their livelihood.
Bihar’s Only Jute Mill Slowly Turning to Ruins

Samastipur: Ever since Bihar’s only jute mill — the Rameshwar Jute Mills at Muktapur in Samastipur district — was shut down three-and-a-half-years ago, around 4,200 workers are struggling to make ends meet. Majority of them have migrated to bigger cities to earn livelihood, while the rest are still waiting for the facility to start operations. The sudden lockdown of the mill with an annual turnover of Rs 125 crore has also given a blow to thousands of jute farmers from Purnia, Araria, Kishanganj, Saharsa, Madhepura and Katihar districts who supplied their produce to the mill.

Meanwhile, there is a deadlock between the workers and the factory management over non-payment of dues. The employees who were serving till the mill was closed on July 6, 2017 have their bonus due for financial years 2016-17, 2017-18 and 2018-19.

Those who retired have not been paid their gratuity. The workers’ contribution towards provident fund (PF) deducted from their salaries have allegedly not been deposited in their PF accounts from October 2016.

Established in 1926 on 84 acres of land by the Darbhanga Raj (Khandwala dynasty), the Rameshwar Jute Mills Limited was run by Maharaja Kameshwara Singh till 1954. It was then taken over as an amalgamation by the Birla Gwalior Limited, which managed and operated it till 1976. The company sold its jute mill in 1986 to Winsome International Limited owned by former coal minister Santosh Kumar Bagrodia under Congress, who later sold it to the West Bengal-based industrialist Binod Nath Jha — the present owner of the mill.

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The mill had a daily production capacity of 70 tonnes of gunny sacks used to store food grains. Following a massive fire in 2014 that had damaged several machines of the plant, its production capacity had gone down to 35 tonnes per day. The mill had suffered huge losses when massive fire broke out in the plant thrice in the past 10 years, with loss of around Rs 14 crore in the fire in March 2012. In the second incident of fire that occurred in April 2014, the company is estimated to have lost property worth Rs 6 crore. Again on March 17, 2019, another fire reportedly caused damage of more than Rs 5 crore.


The level of institutionalised corruption in the state has been in the headlines time and again. The mill also allegedly fell prey to this. Reportedly, the Bihar State Food & Civil Supplies Corporation Limited (BSFCSCL) owes nearly Rs 18 crore to the mill.

“The senior officers of the BSFCSCL, wanted a commission from the mill owner to clear the due, which the latter refused to pay. It resulted in a dispute, which went to the Patna High Court. The PSU, in 2019, was directed to make the payment. Following judicial intervention, a partial payment was made. The BSFCSCL still owes Rs 10.5 crore plus interest. Due to the non-payment, the financial burden on management continued to increase — especially as the state government-run company, the largest consumer, also stopped buying jute jute bags from the mill,” Amarnath Singh, general secretary of the Rameshwar Jute Mills Labourers’ Union told NewsClick.

Also read: Loot and Plunder — The Story of Closure of Darbhanga’s Ashok Paper Mill

Triloki Nath Singh, vice president of the mill’s administration, however, refused to acknowledge the allegation of demand for a bribe. He said the payment is pending because of the bureaucratic red tapism in government departments.

The mill issued a suspension of work notice on July 5, 2017, informing its workers that the financial health of the factory has deteriorated because of different unfavourable conditions in the past one year.

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“At a time when various existing problems — which also included indiscipline and failing production targets — were already causing financial loss to the company, the non-payment of the dues by the Bihar State Food & Civil Supplies Corporation Limited, Patna for the past one year has further ruptured the mill financially. As a result, the factory, which has become a victim of stubbornness of the Bihar State Food & Civil Supplies Corporation Limited and its red-tapism, is unable to continue operations. It is impossible to continue operations of the factory till the Bihar State Food & Civil Supplies Corporation Limited makes full payment and the workers/employees become disciplined and meet the production target. The above mentioned circumstances have forced the management to implement its decision of ‘Suspension of Work’ based on the principle of ‘No Work, No Pay’ from 6 PM, July 6, 2017. Except the workers/employees assigned to perform essential services, the suspension of work will remain in effect for all,” the management said in the notice.

Before the decision for closure, several rounds of talks were held between the mill management and the workers’ union, which had agreed that the workers would meet the production target if the management agrees to pay the dues at least in installments. Their demands include payment of gratuity from 2010 to those who have retired, bonus to the serving workers and the payment of the PF deducted.

“Instead of giving an assurance, the management continued to dilly dally, expecting workers to increase their productivity without their due numeration,” alleged Singh, who was also working with the mill as time keeper.


The decision of the shutdown was challenged before the concerned government authorities, which time and again directed the management to sit with union representatives and resolve the disputes. But these orders were also allegedly not complied by the management.

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The principal secretary of the Department of Labour Resources, Government of Bihar, had asked the mill management in 2017 to appear before the deputy labour commissioner’s office in Darbhanga and hold talks with union representatives on their grievances and to resume operations, but no representative of the management turned up for the same. This was brought to the notice of the principal secretary by the union through a letter dated October 9, 2017, but no action was taken against the mill management.

Also read: 17 Years After Shut Down, Motihari Sugar Mill Workers Await Justice and Salaries

Similarly, the issue of non-payment of PF to retired workers was also brought to the notice of the regional commissioner of the Employees Provident Fund Organisation (EPFO). “Responding to our complaint, the department had sent a vigilance team to the mill. But no one from the management met the investigating officers and supplied any documents to them. They met us and we provided the records we had. We reminded the department with regard to our previous complaint through a letter dated December 3, 2018, but nothing has happened so far,” complained the union’s general secretary.

Following a consistent fallout, the Bihar government had issued a notification on January 15, 2018, acknowledging the dispute between the mill management and the workers and declared the lock-out “prohibited”. “Industrial dispute exists between the management, M/S Rameshwar Jute Mills, Muktapur, Samastipur, Bihar, and Rameshwar Jute Mills Labour Union for adjudication, and continuance of lock-out from July 6, 2017 is prohibited under ID Act (Industrial Disputes Act, 1947) Section-10(3),” declared the notification issued by the Governor of Bihar, referring the dispute for adjudication to the Labour Court, Begusarai.

A period of three months from the date of receipt of the notification was also specified within which the Labour Court had to submit its award to the dispute to the state government. “Unfortunately, the matter is still pending there,” informed Singh, claiming that the union also filed several queries under RTI to find out what action was taken by the government against the mill management for violating the governor’s order.

Recently, the deputy labour commissioner of Darbhanga, has once again written to the management, asking it to appear before him and hold talks in his office with union representatives in harmonious atmosphere.

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“You are informed that it has been mentioned in a complaint received from Mr Naushad Alam, president of the Rameshwar Jute Mills Labours’ Union, Muktapur, Samastipur, that the payment of bonus of around 4,000 workers of the Rameshwar Jute Mills is pending for financial years 2016-17 and 2017-18. It has also been stated that the lockdown of the mill has been declared ‘prohibited’ by the Government of Bihar. In spite of this, you have not lifted the mill’s lockdown,” wrote the officer on August 13, 2020.

He further stated, “You had made the undersigned aware through a letter dated June 10, 2019, that you would issue a notice by August 2019 with regard to resuming the mill’s operation. But you have neither so far issued any notice for reopening the mill nor cleared the dues of the workers. Therefore, you are once again directed take part in negotiations with the union representatives either yourself or through any of your representative on September 20, 2020 at 1 pm in the office of the deputy labour commissioner at Ramnagar, Laheriasarai, Darbhanga.”


Following the latest direction, the mill management has spoken to the union, claiming that the operations will resume very soon.

“We are very serious to resume operations and therefore, are making all efforts. We are taking all stake holders into confidence to end the deadlock. We are in talks with the union, which is positive to resume the operations. The management has agreed to make full payment of the bonus, which is Rs 1 crore, for the financial year 2016-17. The payment for the next fiscal year will be made in installments. But we will be able to make the payments only after the mill starts functioning,” the newly-appointed vice president, Triloki Nath Singh, told NewsClick.

He even claimed that the plant would begin operations in the next 20-25 days.

However, the union representatives are not convinced and considering it a tactic to sell the jute bags worth Rs 2 crore lying in the godown. After the factory was closed, the management tried to transport the product from the mill premises, but it was opposed by the workers who finally did not let it happen. The situation at that time had become so tense that the police had to intervene to pacify the angry workers.

“The management’s claim that the operations would begin in the next 20-25 days is bogus. Owing to dues of around Rs 70 lakh, the electric supply to the facility has been suspended. The license of the mill has also been cancelled. So, it’s a baseless claim, which we assume has been made at the behest of the government because Assembly elections in the state are round the corner,” alleged a worker.

When asked about the pending electricity bills and alleged defaults of loan taken from Allahabad Bank and Canara Bank, Triloki Nath Singh refused to comment, stating that he is not authorised to speak on the company’s financial matters.

An executive engineer of the electricity department, when asked if the company has approached them for payment or any kind of waiver, revealed that no such move has so far been made by the mill management. “The mill has to make the first move. We will be in a position to do anything only if the factory approaches us. And no such move has been taken by them so far,” he said, requesting anonymity.

On August 29, Maheshwar Hazari, minister for Planning and Development and Industries in the state government, told journalists at Samastipur that the Rameshwar Jute Mills will be functional in one week, which has already expired.

Accompanied by the mill’s vice president, he had spoken to the mill owner in this regard. He accepted that the government owed some payment of the mill. “I also had words with the principal secretary of the state’s Food and Civil Supplies Department who informed me that the department has to pay the mill around Rs 10.26 crore and that the payment process has already been started,” he claimed.

He also said they had also discussed the non-payment of the electricity bill. “The Bihar government will talk to the Centre to bail out the industry. The Bihar government is also committed to extend all required assistance,” he said.

He had gone on to claim that the maintenance work in the plant would begin from August 30 and he would remain present when the mill’s “silenced siren” reverberates once again, following which the mill would resume functioning.

Interestingly, all the dates mentioned by him have already passed, but the mill is yet to open. Workers have called out the tall claims made by the minister an election “gimmick”.

Also read: Bihar Sugar Industry: Long Tale of Sweet Memories, Bitter Truth

“Maheshwar Hazari after being elected (from Kalyanpur Assembly constituency, which has jurisdiction over the jute mill) never bothered to visit his area. When the polls are round the corner, these leaders have started paying visits. Where was he all these 3.6 years since the mill was shut down? Prince Raj (Lok Janshakti Party MP from Samastipur district) had also assured us that he would raise the issue of the mill’s closure in Parliament and ensure that it would resume functioning. Even the siren was once blown when he had visited the mill, but the operation never started. The same is likely to happen this time as well. Only the siren’s call would be made to give out a message that the plant has become operational, but the machines will not roar,” said Harish Chandra Sahni, a worker associated with the mill’s quality control department.

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He said that he doubts the management as well as the government based on his past experience. “I already told you about Prince Raj who had also made the same claim, but that never turned into reality. Making such a big plant after 3.6 years operational is not so easy. The maintenance of the machinery will take at least a month. The electricity supply has not been resumed. At present, the company does not have a license to operate the plant. Given the scenario, the claims made by the minister and the management is nothing but to get electoral benefits,” he added.

Others, too, refuse to believe the mill’s management and the government.

“The MLA of Kalyanpur Assembly constituency (Hazari), which has the jute mill, is a Cabinet minister in the state government. Samastipur MP belongs to a party that is an ally of the ruling Bharatiya Janata Party (BJP). Still, the factory has been non-functional for the past 3.6 years. It’s nothing but a blot on the ruling dispensation, both in the state as well as the Centre, which is now making tall claims,” said Sanjay Kumar Rai, a worker of the factory.

He recalled an incident when he had gone to meet Hazari, who was then minister of planning and development, at his official residence in Patna. “He had told me, ‘Jute Mill se to hamen vote hi nahin mila, hum kyun chalu karaen (I had not got votes from the Jute Mill area. Why should I make efforts to make it functional)’,” he alleged.

The workers said they would boycott the upcoming election if the mill is not re-opened. “We had boycotted the general elections 2019 and will do the same in this polls as well,” one of the workers added.

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