Revival and rehabilitation of sick companies under new act 20. Section 252 of the insolvency and bankruptcy code, 2016 ibc, which came in to force w. Sick industrial companies act, 1985 how is sick industrial. The sick industrial companies act sica was a key piece of legislation dealing with the issue of rampant industrial sickness in india. An act to make, in the public interest, special provision with a view to securing the timely. Reference to bifr under the sick industrial companies. The board was set up in january 1987 and became functional as of 15 may 1987. Chapter xix of the 20 act lays down the provisions for the revival and rehabilitation of sick companies. The sica had been enacted in the public interest deal with the problems of industrial sickness was regard to the crucial sectors where public money locked up. The objectives of this act sica as incorporated in its preamble, emphasis the following points. The act provided for setting up of a quasijudicial body designated as the board for industrial and financial reconstruction bifr to deal effectively with the.
Chapter 3 rehabilitation under sick industrial companies special provisions act, 1985 3. Sick industrial companies special provisions act, 1985 repealed and bifr aifr dissolved december 1, 2016 in brief the ministry of finance mof, vide notification nos. Board for industrial and financial reconstruction wikipedia. The sick industrial companies act, 1985, indian bare acts at, a website for indian laws and bareacts, legal advice and law documents in india. Jan 31, 2019 this video is on industrial sickness in india. The board for industrial and financial reconstruction bifr was formed under the sica to determine the sickness of such industrial companies and to prescribe measures either for the revival. Board for industrial and financial reconstruction and ors. Repeal of the sick industrial companies special provisions act, 1985 notified with effect from 1st december, 2016. Although it aims to provide comprehensive provisions for the revival and rehabilitation. Sick industries, sick industrial companies special. Be it enacted by parliament in the fiftyfourth year of the republic of. Where on a demand by the secured creditors of a company representing fifty percent or more. To repeal the sick insdustrial companies special provisions act, 1985.
Industrial sickness is defined all over the world dubious discuss as an industrial company being a company registered for not less than five years which has, at the end of any financial year, accumulated losses equal to, or exceeding, its entire net worth and has also suffered cash losses in such financial year and the financial year immediately preceding such financial year. The sick industrial companies special provisions act, 1985. It applies to industrial undertakings both in the public and private sectors. Where there has been under any scheme under this act an amalgamation of a sick industrial company with another company, the provisions of section 72a of the incometax act, 1961 43 of 1961, shall, subject to the modifications that the power of the central government under that section may be exercised by the board without the central. The sick industrial companies special provisions act, 1985 sica was enacted to make special provisions for the timely detection of sick and potentially sick companies owning industrial undertakings. In view of this, industrial companies in the public sector which are sick but can be revived as well as those which are chronically sick and cannot be turned around do not fall within the purview of the said act. The repeal act provides for repeal of the sick industrial companies special provisions act, 1985 sica and related matters. Institutes act rdbfi 1985 sick industrial companies special provisions act bifr 2001 corporate debt restructuring cell cdr 2002 sarfaesi act arcs 2014 announced asset classification forbearance on restructuring ended from march 2015 jan 2014 revitalising distressed assets in the economy sma and jlf dec 2014 flexible structuring of. Chapter xix of 20 act revival and rehabilitation of sick companies omitted by ibc w. Jul 08, 2016 the most important piece of legislation dealing with industrial sickness was the sick industrial companies special provisions act, 1985 sica. Juridical status and membership chapter i company formation memorandum of association 1. Changes that have been made appear in the content and are referenced with annotations. One of the significant powers of bifr is to sanction a scheme of. The substantive portions of the act came into force from may 15, 1987.
Sick industries, sick industrial companies act, 1970 a synopsis of sick industrial companies special provisions act, 1985 sica, overriding effect of sarfaesi act, 2002 on provisions of sica, sica repeal act 2003 and revival and rehabilitation of sick industrial companies under provisions of companies act 20. The bifr was established under the sick industrial companies special provisions act, 1985 sica. Impact of sick industrial companies act on enforcement of. Where the management of the sick industrial company is taken over or changed 33 in pursuance of any scheme sanctioned under section 18, notwithstanding anything contained in the companies act, 1956 1 of 1956, or any other law or in the memorandum and articles of association of such company or any instrument having effect under the said act or other law.
D sick industrial companies special provisions act 1985 and some provisions of negotiable instruments act, 1881. This act may be called the sick industrial companies special provisions act, 1985. Industrial sickness part1 business environment bcom. The practical lawyer overriding effect of the sick. Sick industrial companies act, 1985 listed as sica. In an event that took more than a decade to fructify, the ministry of finance vide a notification dated 25 th november 2016, has repealed the sick industrial companies special provisions act, 1985 sica with effect from 1 december this year.
The sick industrial companies special provisions act, 1985 sica was. Recovery of debt due to banks and financial institutions act, 1993, sarfaesi securitisation and reconstruction of financial assets and enforcement of security interest act, 2002 and companies act, 20. Overview of industrial sickness in india your article library. Government finally repeals sica years after repeal act was. Repeal of sick industrial companies special provisions act, 1985. Abolishment of the right to property, 1978 67 chapter 32. Short title, extent, commencement and application 1 this act may be called the sick industrial companies special provisions act, 1985. Revival and rehabilitation of sick companies under new act. Oct 01, 20 industrial sickness in india prithvi rani 2nd. The board may, if it is of opinion that any direction is necessary in the interest of the sick industrial company or creditors or shareholders or in the public interest, by order in writing direct the sick industrial company not to dispose of, except with the consent of the board, any of its assets. The practical lawyer overriding effect of the sick industrial. Overriding effect of the sick industrial companies special provisions act, 1985 overriding effect of the sick industrial companies special provisions act, 1985 this page is dedicated to articles on commercial and corporate litigation as well as legal developments. Sick industrial companies special provisions act, 1985 repealed.
Full text containing the act, sick industrial companies special provisions act, 1985, with all the sections, schedules, short title, enactment date. Nov 30, 2016 on such date, as may be notified by the central government in this behalf, any appeal preferred to the appellate authority or any reference made or inquiry pending to or before the board or any proceeding of whatever nature pending before the appellate authority or the board under the sick industrial companies special provisions act,1985. Repeal of sick industrial companies special provisions act. The revival and rehabilitation of sick industrial units is governed by sick industrial companies special provisions act, 1985 sica and it constituted board for industrial and financial reconstruction bifr for this purpose. Sick industrial companies act, 1985 how is sick industrial companies act, 1985 abbreviated. The sick industrial companies special provisions act, 1985, was enacted to help and revive the sick units.
Definition of industrial sickness sick industrial companies act, 1985 a unit is defined as sick industrial company where. Home actsofparliamentfromtheyear the sick industrial companies special provisions act, 1985. An act to make, in the public interest, special provision with a view to securing the timely detection of sick and potentially sick companies owning industrial undertakings, the speedy determination by a board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies and the expeditious. Be it enacted by parliament in the fiftyfourth year of the republic of india as follows. A new industrial policy was tabled in parliament on 24 july 1991 aiming to maintain growth in productivity and gainful employment and to encourage the growth of entrepreneurship and upgrades to technology.
Sick industrial companies act sica definition investopedia. Companies act 1985 is up to date with all changes known to be in force on or before 07 april 2020. The companies amendment bill, 2001 was introduced because the government considered that the bifr had not met its objective of preventing industrial sickness. An overview sankalp jain introduction sick industrial unit is defined as a unit or a company having been in existence for not less than five years which is found at the end of any financial year to have incurred accumulated losses equal to or exceeding its entire net worth. Section 22 in the sick industrial companies special. Companies act, 1956 sections 391 to 396 the sick industrial companies special provisions act, 1985 corporate debt restructuring scheme asset reconstruction under securitisation and reconstruction of financial assets and enforcement of security interest act, 2002 sarfaesi rbi guidelines on special mention accounts. In exercise of powers conferred by subsection 2 of section 1 of the sick industrial companies special provisions repeal act, 2003 1 of 2004, the central government hereby appoints the 1 st day of december, 2016, as the date on which the provisions of the said act shall come into force. Sick industrial companies special provisions act, 1985 and bifr. This chapter may and will replace the provisions of sick industrial companies special provisions act, 1985. Indian sick industrial companies act, 1985 sica is a unique legislation introduced in india with the purpose of identifying industrial companies in financial distress and introducing timely preventive, ameliorative, and remedial measures to alleviate its condition. There are changes that may be brought into force at a future date. Companies act 1985 an act to consolidate the greater part of the companies acts 11 march 1985 part i formation and registration of companies. At present the sick industrial companies special provisions act, 1985 does not apply to government companies. The sick industrial companies special provisions repeal act, 2003 sicspra shall come in force from december 01, 2016 vide notification issued in official gazette on november 25, 2016 1 amendment of sicspra before coming into force.
Nov 30, 2016 in an event that took more than a decade to fructify, the ministry of finance vide a notification dated 25 th november 2016, has repealed the sick industrial companies special provisions act, 1985 sica with effect from 1 december this year. Overriding effect of the sick industrial companies special provisions act, 1985 overriding effect of the sick industrial companies special provisions act, 1985 this page is dedicated to articles on commercial and corporate litigation as well as legal developments in these areas by haripriya padmanabhan. The sick industrial companies special provisions repeal act, 2003 replaced sica and sought to dissolve the bifr and the appellate authority for industrial and financial reconstruction. C provincial insolvency act 1920, the securitisation and reconstruction of financial assets and enforcement of security interest act 2002 and recovery of debts due to banks and financial institutions act, 1993. Rehabilitation under sick industrial companies special provisions act, 1985 3. The board for industrial and financial reconstruction bifr was formed under the sica to determine the sickness of such industrial companies and to prescribe measures either for.
The case of shree chamundi mopeds ltd supra deals with sick industrial companies special provisions act, 1985 and not a corruption matter like the present one. The most important piece of legislation dealing with industrial sickness was the sick industrial companies special provisions act, 1985 sica. An act to repeal the sick industrial companies special provisions. The objectives of this act sica as incorporated in its preamble. An act to make, in the public interest, special provision with a view to securing the timely detection of sick and potentially sick companies owning industrial undertakings, the speedy determination by a board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies and the expeditious enforcement of the measures so. Nationalisation, then privatisation, of maruti udyog, 1980 69 chapter 33.
The chapter describes the circumstances which determine the declaration of a company as a sick company, and also includes the rehabilitation process of the same. The board for industrial and financial reconstruction bifr was formed under the sica to determine the sickness of such industrial companies and. Sick industrial companies act sica national portal of india. November 01, 2016, provide that the sicspra shall be. Companies act 1985, section 1 is up to date with all changes known to be in force on or before 03 april 2020. For the removal of doubts, it is hereby declared that an industrial company existing immediately before the commencement of the sick industrial companies special provisions amendment act, 1993, registered for not less than five years and having at the end of any financial year accumulated losses equal to or exceeding its. Other laws which deal with the issue include sica sick industrial companies act, 1985.
Section 32 in the sick industrial companies special. Sick industrial companies special provisions act, 1985 bare acts. Sick industrial companies act sica government of india. Standards of weights and measures act, 1976 63 the fourth decade chapter 31.
The sick industrial companies special provision act, 1985 defines, an industrial unit not registered for less than seven years as sick if it has incurred cash losses for the current and preceding year equal to or exceeding its net worth. Sick industrial unit is defined as a unit or a company having been in existence for not less than five. Rehabilitation under sick industrial companies special. Sick industrial companies special provisions act, 1985. Meaning of industrial sickness according to sick industrial companies act 1985. We may note this chapter has much wider impact then earlier act of 1985. Government finally repeals sica years after repeal act. Presentation on industrial sickness in india prithvi rani 2nd. Under the sick industrial companies special provisions act, 1985, the bifr has powers to declare a company having one or more industrial undertakings as a sick industrial company and consider and sanction a scheme for revival and rehabilitation of the sick industrial company. The sick industrial companies special provisions act. The sick industrial companies act of 1985 sica was a key piece of legislation dealing with the issue of rampant industrial sickness in india. Repeal of sick industrial companies special provisions.