For decades this company kept our memories alive through its photo films. Then the iconic Hindustan Photo Films Manufacturing Company met its death in the midst of digital technology, high costs and poor management, got liquidated and now its land is being parceled out as part of a debt resolution plan.

In a recent order passed by the Chennai NCLT, the court allowed MK Rajagopalan, a Chennai-based real estate developer, to take over part of the company’s land for Rs 100.80 crore.

This is the first case after the Insolvency and Bankruptcy Board of India (IBBI) had brought in an amendment allowing for part resolution and part liquidation.

Rajagopalan will take over the company’s two freehold land parcels, including 12.19 acres at Ooty and 4.49 acres at Ambattur in Chennai.  The 291.17 acres of leased land will go back to the state government. 

According to the petition in the National Company Law Tribunal (NCLT), Rajagopalan is the promoter of a real estate company called SGS Land Holdings Private Ltd. He also runs Kim Ram Export Private Ltd, a trading company. 

The 12.19 acres of land will be merged with SGS Land Holdings and the land in Chennai of 4.49 acres will be merged with Kim Ram Exports.

Hindustan Photo Films Manufacturing Company was incorporated as a public sector enterprise in 1960 and stopped its business activities in 2013. It was set up in Ooty to drive the economy of the Nilgiris centred around tea, tourism and the film manufacturing unit.

For decades it ran as a successful enterprise but things started slipping since 1992. Known for its ‘black and white films’, its products were unable to withstand competition after the digital photography revolution. The company ran up huge losses and borrowings from banks and other institutions rose to Rs 987.47 crore. Along with interest added, the company has outstanding dues of Rs 44,001 crore, according to the petition filed by Canara Bank in NCLT, Chennai.

 Located in the scenic hill station of Udhagamandalam, Hindustan Photo Films was declared bankrupt by the Board of Industrial and Financial Reconstruction (BIRF) in 1996. In 2003, BIFR passed an order to wind up the company due to the rising tide of losses. Observing that there is no feasibility for the plant to continue, it referred the case to the Madras High court. In May 2020, the Madras HC allowed Canara Bank, one of the debtors who had appealed for taking the case to the Insolvency and Bankruptcy Code (IBC), to recover a corporate bond of Rs 705 crore which the company had borrowed.

About 77.94% of the creditors voted in favour of the resolution plan submitted by Rajagopalan. Earlier, the government of Tamil Nadu said it had plans to set up a medical college in the land. Canara Bank objected, saying the land is mortgaged against an Rs 18,500-crore loan. 

After pulling up the bank for accepting the land as security, the Madras HC transferred the case to the NCLT. The tribunal has now allowed for the sale of the company’s freehold land.