Once illustrious factory joins list of Mysuru’s lost industries; 2,500 workers’ legacy fades into history

Mysuru: The movable and immovable assets of Falcon Tyres on KRS Road in Metagalli have finally been sold after a prolonged legal battle that began in 2015, marking the end of a once-thriving industrial unit that employed nearly 2,500 workers.

Established over 50 years ago, Falcon Tyres now joins the long list of major industrial closures in Mysuru, including K.R. Mill, Mysore MMC, Ideal Jawa, Jai Bearings and Mysore Steel Company. More than 18 mega factories have shut down in the region over the years.

Industrial sources confirmed to Star of Mysore that the assets were purchased by a private garment company in an e-auction conducted under the Insolvency and Bankruptcy Code, 2016, for Rs. 130 crore.

The buyer acquired 18.23 acres of land, the administrative office, production units and machinery.

The liquidation was ordered by the National Company Law Appellate Tribunal (NCLAT), Bengaluru Bench and the process was facilitated by Court-appointed liquidator Shivadutt Bannanje. A pre-auction reserve fund of Rs. 117 crore was fixed.

Sources added that the new owner has already disposed of the machines, administrative office furniture and production units, leaving only the outer structure of the factory intact. The buyer now plans to set up a garment production unit at the site.

Closure in December 2015

Falcon Tyres, earlier owned by Ruia Group, headed by Pavan Kumar Ruia, was once one of Asia’s largest two-wheeler tyre & tube manufacturers. The factory slipped into decline in 2014 and eventually shut down in December 2015. Before shutting down, the workers were not paid salaries for two months, and the closure was declared in the third month.

Known for its advanced machinery capable of operating even during power outages, the company initially showed promise. However, excessive borrowing — three times the required amount — for automation and machinery upgrades led to financial instability.

Incorporated in 1973, the company came under the Ruia fold on Dec. 1, 2005. With an installed capacity of 11 million tyres, it manufactured products under the Dunlop, Donin and Falcon brands, supplying multiple vehicle manufacturers. It also exported tyres to 21 countries, including Latin America, West Asia, Africa and other parts of Asia.

Protracted legal battle

Despite its foreign-collaboration venture and high product demand, Falcon Tyres faltered as it failed to repay hefty bank loans and mounting interest. This triggered a series of recovery notices, with the supplier of advanced automated machinery attempting to reclaim equipment. Workers strongly resisted, refusing to allow the removal of machinery.

Legal proceedings ensued and eventually culminated in a Court verdict favouring the lending banks. Production was halted, and the owners expressed helplessness in reopening the factory. Workers staged prolonged protests outside the Mysuru DC’s Office for 141 days but received no meaningful intervention from the State Government.

Empty assurances

The matter later escalated to the NCLAT, which ordered the liquidation of the factory’s assets. Following this, Falcon Tyres was sold online for Rs. 130 crore.

The original workforce, left without support, received only 50% of their Provident Fund dues. Despite repeated appeals to successive Governments, workers were met with empty assurances.

Many former employees shifted to other professions such as masonry, painting, security, driving and autorickshaw operation. Today, most are over 65 years old; some have passed away, and others tragically took their own lives. Those who spent 30 to 40 years in service now survive on a meagre pension of Rs. 1,500 to 2,000 per month.

Legal battle continues…

Following the Rs. 130-crore acquisition of Falcon Tyres by a garment manufacturer, the new owner had planned to convert the premises into a garment production unit.

However, sources told SOM that after liquidation dues were settled, the previous proprietor filed a fresh petition in Court, alleging procedural lapses and terming the entire liquidation process a sham, claiming it was not conducted as per established norms. As a result, the new buyer has been unable to begin operations, with the matter still mired in legal proceedings.