The sick industrial companies act of 1985 sica was a key piece of legislation dealing with the issue of rampant industrial sickness in india. The practical lawyer overriding effect of the sick industrial. Be it enacted by parliament in the fiftyfourth year of the republic of. Other laws which deal with the issue include sica sick industrial companies act, 1985. 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. D sick industrial companies special provisions act 1985 and some provisions of negotiable instruments act, 1881.
Revival and rehabilitation of sick companies under new act 20. Section 32 in the sick industrial companies special. 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 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. Revival and rehabilitation of sick companies under new act. Sick industries, sick industrial companies special. The sick industrial companies act sica was a key piece of legislation dealing with the issue of rampant industrial sickness in india. Rehabilitation under sick industrial companies special provisions act, 1985 3.
Chapter 3 rehabilitation under sick industrial companies special provisions act, 1985 3. Although it aims to provide comprehensive provisions for the revival and rehabilitation. 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. 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. 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.
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. Chapter xix of 20 act revival and rehabilitation of sick companies omitted by ibc w. Juridical status and membership chapter i company formation memorandum of association 1. Presentation on industrial sickness in india prithvi rani 2nd. 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. The sick industrial companies special provisions act. 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. Where on a demand by the secured creditors of a company representing fifty percent or more. Sick industrial companies special provisions act, 1985 bare acts. 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. Abolishment of the right to property, 1978 67 chapter 32.
The objectives of this act sica as incorporated in its preamble, emphasis the following points. Oct 01, 20 industrial sickness in india prithvi rani 2nd. Sick industrial companies special provisions act, 1985 and bifr. The substantive portions of the act came into force from may 15, 1987.
Definition of industrial sickness sick industrial companies act, 1985 a unit is defined as sick industrial company where. 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. Government finally repeals sica years after repeal act. This chapter may and will replace the provisions of sick industrial companies special provisions act, 1985. Sick industrial companies act sica government of india. Board for industrial and financial reconstruction and ors. Government finally repeals sica years after repeal act was.
There are changes that may be brought into force at a future date. Repeal of sick industrial companies special provisions. Sick industrial companies act sica definition investopedia. 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 national portal of india. The repeal act provides for repeal of the sick industrial companies special provisions act, 1985 sica and related matters.
The board was set up in january 1987 and became functional as of 15 may 1987. 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. Full text containing the act, sick industrial companies special provisions act, 1985, with all the sections, schedules, short title, enactment date. 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.
Sick industrial companies act, 1985 how is sick industrial. The sick industrial companies special provisions act, 1985 sica was. Jul 08, 2016 the most important piece of legislation dealing with industrial sickness was the sick industrial companies special provisions act, 1985 sica. Sick industrial companies act, 1985 how is sick industrial companies act, 1985 abbreviated. 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. We may note this chapter has much wider impact then earlier act of 1985. 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. The practical lawyer overriding effect of the sick. Overview of industrial sickness in india your article library. 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, was enacted to help and revive the sick units. The sick industrial companies special provisions act, 1985.
Board for industrial and financial reconstruction wikipedia. 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. 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. Repeal of sick industrial companies special provisions act, 1985. Changes that have been made appear in the content and are referenced with annotations. Industrial sickness part1 business environment bcom. Section 22 in the sick industrial companies special. The objectives of this act sica as incorporated in its preamble. Repeal of sick industrial companies special provisions act. 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 board for industrial and financial reconstruction bifr was formed under the sica to determine the sickness of such industrial companies and. 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. Sick industrial unit is defined as a unit or a company having been in existence for not less than five. 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. The sick industrial companies act, 1985, indian bare acts at, a website for indian laws and bareacts, legal advice and law documents in india. 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. An act to repeal the sick industrial companies special provisions. Be it enacted by parliament in the fiftyfourth year of the republic of india as follows. To repeal the sick insdustrial companies special provisions act, 1985. 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. 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. Home actsofparliamentfromtheyear the sick industrial companies special provisions act, 1985. Repeal of the sick industrial companies special provisions act, 1985 notified with effect from 1st december, 2016.
Short title, extent, commencement and application 1 this act may be called the sick industrial companies special provisions act, 1985. This act may be called the sick industrial companies special provisions act, 1985. Section 252 of the insolvency and bankruptcy code, 2016 ibc, which came in to force w. Jan 31, 2019 this video is on industrial sickness in india. November 01, 2016, provide that the sicspra shall be. One of the significant powers of bifr is to sanction a scheme of. At present the sick industrial companies special provisions act, 1985 does not apply to government companies. 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. The most important piece of legislation dealing with industrial sickness was the sick industrial companies special provisions act, 1985 sica.
Impact of sick industrial companies act on enforcement of. Meaning of industrial sickness according to sick industrial companies act 1985. 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. 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. 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. Companies act 1985, section 1 is up to date with all changes known to be in force on or before 03 april 2020.
Sick industrial companies special provisions act, 1985. It applies to industrial undertakings both in the public and private sectors. Companies act 1985 an act to consolidate the greater part of the companies acts 11 march 1985 part i formation and registration of companies. 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. Chapter xix of the 20 act lays down the provisions for the revival and rehabilitation of sick companies. 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. 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. 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.
Sick industrial companies special provisions act, 1985 repealed. The bifr was established under the sick industrial companies special provisions act, 1985 sica. Rehabilitation under sick industrial companies special. Sick industrial companies act, 1985 listed as sica.
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