Capital gain – North India’s first industrial enterprise had its roots in Chandni Chowk

Source: Business Standard Article

Pushcarts, rickshaws, two-wheelers, cars, men and animals vie for space on the road. Wires hang from poles like threads from a fakir’s neck. Commerce thrives amidst the chaos; clothes, cheap cell phones, jewellery, food, shoes – everything sells here. This is Chandni Chowk, once the pride of Delhi but now cramped and unfashionable. You may find the odd tourist trying to get a glimpse of the Delhi of old, though there isn’t much that remains.

Source: Business Standard Article

Pushcarts, rickshaws, two-wheelers, cars, men and animals vie for space on the road. Wires hang from poles like threads from a fakir’s neck. Commerce thrives amidst the chaos; clothes, cheap cell phones, jewellery, food, shoes – everything sells here. This is Chandni Chowk, once the pride of Delhi but now cramped and unfashionable. You may find the odd tourist trying to get a glimpse of the Delhi of old, though there isn’t much that remains.


One such landmark is the Chunnamal Haveli located just before the turn that takes you to Katra Neel, the Khatri quarters of the area. A huge generator almost hides the heritage building. There are over a hundred small shops on the ground floor. Two flights of stairs take you to the living quarters of the Pershad family, the current owner. The drawing room is about 50-feet long, 25-feet wide and 20-feet high. There are fireplaces at the two ends of the room. The roof is painted red and the walls are ornate. Three massive mirrors hang on the walls. A marble slab in one corner proclaims, in Urdu, that the house was built in 1848.

This room has great significance in India’s business history. On September 22, 1888, 21 guests had gathered inside this room at 4:30 in the evening: clerks, teachers, merchants, lawyers, bankers, moneylenders and jewellers. The meeting was the idea of three men – Ram Kishan Dass, Sri Krishn Das and Gopal Roy – who wanted to start north India’s first textile mill and wanted to sell their idea to potential investors (in present times, you would call it a roadshow). Ram Kishan Dass was the son of Chunnamal, the famous banker.

Chunnamal and Salig Ram were prosperous businessmen in the days of the Mughal court. They were bankers and also supplied shawls and brocades to the bankrupt royal family. Historian Mahmood Farooqui says they were not inconsequential bankers; they even had their own dak system. When the 1857 Mutiny broke out, the court demanded money from the two businessmen. They knew it was a lost cause and refused to contribute. Salig Ram probably perished in the Mutiny, but Chunnamal emerged stronger when the British took control of the city. He bought the Fatehpuri Mosque from the British for Rs 38,000; it was restored to the Muslims of the city only in 1877 after Chunnamal was granted four villages around Delhi. He started a bank (Delhi London Bank), became a commissioner of the Delhi Municipal Corporation, and started the Anglo-Sanskrit College in 1869. "He earned Rs 1 lakh in a year at that time," says Anil Pershad, a sixth descendant of Chunnamal and a wholesale distributor for ITC. In later years, the family bought the first car in Delhi and had the first telephone instrument was installed at its home. It owned Delhi’s first theatre, Rama Theatre, where the first Indian talkie, Alam Ara, was shown. The theatre now houses a museum run by gurudwara Sis Ganj Sahib.

Sri Krishn Das belonged to the gurwala family of bankers. Their firm was Bukshi Ram Mohan Lal but they were called gurwalas because they gave gur to pilgrims passing through Delhi. During the mutiny, Ramji Dass, the patriarch of the gurwala family, gave money not once but three times to the court of Bahadur Shah Zafar, the Mughal emperor and nominal leader of the mutineers. Naturally, the family found itself out of favour when the English came to power. It was a tough task for Ramji Dass to claw back to power. But that’s what he did. And when he died in 1869, his son, Sri Krishn Das, became one of the richest young men of the city.

Gopal Roy, the third man behind the venture, was a munim at Chunnamal Salig Ram, the holding company of the Chunnamal family, and belonged to the Kotwal family of Kucha Mai Das in Sitaram Bazaar. They were called the Kotwals because Budri Dass, Gopal Roy’s grandfather, was the Kotwal of the British cantonment in Delhi during the Mutiny. Budri Dass was probably home when the mutineers rode into the city. They were thirsty for the blood of not just British men and women but also their collaborators. Budri Dass fell in this category. A band of men had started for his house at Kucha Mai Das. A woman who swept the streets informed Budri Dass of the impending danger. He fled the city along with a British couple. So, when the Mutiny had been suppressed, Budri Dass was given a cash reward of Rs 50,000 by the British and some land in adjoining Ghaziabad.

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The venture the three had in mind was Delhi Cloth & General Mills Ltd, or DCM. At that time, the industrial centres of the country were Ahmedabad, Surat and Bombay in the West, Calcutta in the East and Kanpur in the Centre. The North was largely agrarian. But there was prosperity in Punjab. Goods produced in Bombay and Kanpur passed through Delhi on their way to the towns and villages of Punjab. Delhi was also a point of transit for apple grown in Kashmir on its way to the markets of East and West India. A railway line linked it to Bombay, Calcutta, Karachi and Punjab. This gave the three men confidence that a venture based out of Delhi could work well. It was estimated the venture would cost Rs 7 lakh in capital investment as well as working capital. This was a large sum, way beyond what the three partners could put together, though Gopal Roy had convinced his cousin, Banwari Lall, and his brother-in-law, Benarsi Dass (of the jewellers Ishri Dass Benarsi Dass) to invest. So they decided to float a joint-stock company. The wooing of the investors began inside the drawing room of Chunnamal Haveli.

Cloth produced by the mill, the guests were told, would have a price advantage in the markets of Punjab (Delhi included) over that brought from Bombay and Kanpur because of the low transport costs. It was easier to do business in Delhi than in Bombay. Workers, for instance, were paid eight annas/i> per day in Bombay, whereas they could be hired for four annas/i> in Delhi. Land also was cheaper in Delhi, and there were ample parcels of it available close to the railway line. The cotton farms of Punjab were close by. The farmers there sent cotton to Bombay mills in bales. But there was no need to press cotton into bales if the market was Delhi. Hence, the cotton would retain its superior qualities. And the market of Punjab was big. All the mills of Bombay and Kanpur were unable to satiate its demand for cloth. The hitch was the promise of 9 per cent return on investment for 25 years. Today, it may look attractive; then, it deterred many. Moneylenders, as most of them were, could easily get up to 25 per cent return on capital. The proposal was put to vote. The verdict was a unanimous yes.

Though the money required was Rs 7 lakh, the company could be started with Rs 5 lakh, the guests were told. The partners disclosed their investments. Sri Krishn Das and Ram Kishan Dass said they would buy 400 and 200 shares, respectively, of Rs 250 each. Banwari Lall, along with an uncle, promised to pick up 75 shares. Gopal Roy said he would buy 25 shares, and Benarsi Dass said he would purchase another 20. Ram Kishan Dass then read out the names of 15 people who had agreed to buy 230 shares. The list had people from all walks of life: judges, surgeons, a station master, engineers, and the chief minister of Alwar (Amir Singh). At the meeting, there were takers for only 105 shares. That brought the share capital to 1,055 shares and Rs 263,750 – a little over half of what was required. A prospectus was circulated in November 1888. And by February 1889, 2,000 shares had been sold. The corpus of Rs 5 lakh that the company needed to get started had been put together. On May 21, 1889, DCM was entered in the Punjab administration’s register as a joint stock company. Its mill at Kishanganj went on steam on March 2, 1891.

* * * * *

DCM was taken to dizzying heights by Gopal Roy’s nephew Lala Shri Ram (though he was knighted in the 1940s, he preferred to be called Lala, the traditional honourific used by his community, the Agarwals) and his two younger sons, Bharat Ram and Charat Ram. At its peak, the company used to make textiles (in Delhi and Lyallpur), sugar, chemicals, fertilisers, vanaspati ghee and cement. It was a blue-chip company and was one of the two targets of NRI raider Swraj Paul in the 1980s, apart from Escorts. Its management trainee programme was much sought after; those who started their careers with DCM include Shiv Nadar and Ashok Soota. The split in the Shriram family in 1989 broke DCM into smaller companies. After that, DCM went into decline. At the site of the mill there now stand three swank commercial buildings, waiting for tenants. The three families too have lost contact. Anil Pershad of the Chunnamal family says the DCM shares got distributed amongst the various claimants of the family in the two splits in 1949 and 1952. His father had inherited 10,000 shares which he sold when DCM began its southwards journey. He has no contact with the gurwalas, though he is aware what the Shriram family is doing.

Not far from where he stays, there is a narrow road that connects Chandni Chowk to Moti Bazaar. At the end of this road, a lane leads you into Maliwada. A shop that measures not more than 50 square feet stocks saris of all colour and make. This belongs to the gurwala family. It is hard to imagine that this is the family that was once among the richest in Delhi and had set up Hindu College in 1899. The owner of the shop admits he is a gurwala but agrees to talk only if he is not identified. The family stays in Gurwala Palace nearby, and each faction runs its own business. The family owns several shops here but, thanks to the Rent Control Act, gets nominal money from the tenants – some pay as little as Rs 5 a month. The DCM shares, he discloses, have been spread very thinly between the family members. But pride swells into his eyes when he says that his ancestor, Sri Krishn Das, helped set up DCM.

A long walk from Chandni Chowk, past Ballimaran, will take you to Sitaram Bazaar. The lane to Kucha Mai Das is hidden behind a temple (it’s called the temple with 84 bells). There are small workshops as soon as you enter where workers are busy binding books. Nobody has heard of the Kotwals/Shrirams. Most of the Shrirams (Arun Bharatram of SRF, Ajay Shriram of DCM Shriram Consolidated, Sidhharth Shriram of Mawana Sugars and Usha International) prefer to live in swanky homes and farmhouses in south Delhi. Many of Kucha Mai Das’s most illustrious family have never visited it.

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