The sick industrial companies special provisions repeal act, 2003 repealed sica. Doc evolution of sick industrial provisions in india madhubanti. Sick industrial companies special provisions repeal act, 2003. This chapter may and will replace the provisions of sick industrial companies special provisions act, 1985.
As the year of sica repeal act suggests, the repeal of sica has been on the cards for a very long time. On the dissolution of the appellate authority and the board. Section 252 of the insolvency and bankruptcy code, 2016 ibc, which came in to force w. The sick industrial companies special provisions act, 1985 sica was enacted. The sick industrial companies special provisions repeal act, 2003 sicspra shall come in force from december 01, 2016 vide notification.
Sica was repealed and replaced in 2003 by the sick industrial companies special provisions repeal act of 2003, which watered down some. 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. Eighth schedule amendment to the sick industrial companies special provisions repeal act, 2003. Sica was to be repealed through sick industrial companies special provisions repeal act 2003 not made. Board for industrial and financial reconstruction wikipedia. Delhi high court under the newly enacted section 4b there are only two classes of. Statewise number of sick industries in india growth. Section 4 in the sick industrial companies special provisions repeal act, 2003. The sick industrial companies special provisions repeal.
The sick industrial companies act, 1985, indian bare acts at, a website for indian laws and bareacts, legal advice and law documents in india. The repeal act provides for repeal of the sick industrial companies special provisions act, 1985 sica and related matters. The sick industrial companies special provisions repeal act, 2003. Eleventh schedule amendment to the companies act, 7272017 20. 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 aaifr, replacing them by the nclt and nclat. Government finally repeals sica years after repeal act. Transition from sica to ibc historical analysis ipleaders.
Therefore, the sica is repealed with effect from 1 december, 2016. Presentation on industrial sickness in india prithvi rani 2nd. Where on a demand by the secured creditors of a company representing fifty percent or more. An act to repeal the sick industrial companies special provisions act, 1985. Although it aims to provide comprehensive provisions for the revival and rehabilitation. The companies amendment bill, 2001 was introduced because the government considered that the bifr had not met its objective of preventing industrial sickness. Act 651 7 the six hundred and fiftyfirst act of the parliament of the republic of ghana entitled labour act, 2003 an act to amend and consolidate the laws relating to labour, employers, trade unions and industrial relations. We may note this chapter has much wider impact then earlier act of 1985. To repeal the sick insdustrial companies special provisions act, 1985. The reserve bank of india has issued guidelines to banks to strengthen the monitoring system and to arrest industrial sickness at the incipient stage. 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. In 2003, the sick industrial companies special provisions repeal act was enacted which gave the central government the power to repeal sica, and dissolve the bifr.
The sick industrial companies special provisions act, 1985. Ninth schedule amendment to the payment and settlement systems act, 2007 10. Therefore, the sica is repealed with effect from 1 december 2016. Sick industrial companies special provisions repeal act, 2003 1 of 2003 section 4b board has registered the reference before the repeal of the act i. Status of sick industrial central public sector enterprises registered with board for industrial and financial reconstruction in india 2003 to 2005.
The provisions of sick industrial companies special provisions act, 1985 after having assented by the president of india on 8th january, 1986, the same was provided to objective to check sickness and expedite the process of revival of efficient and viable sick industrial companies and closure of those unviable. It aimed to repeal the presidency towns insolvency act, 1909 and sick industrial companies special provisions repeal act, 2003, among others. Nclt and nclat were to replace bifr and aaifr through the second amendment act. Rules regulations notifications orders circulars statutory ordinance statutes. Full text containing the act, sick industrial companies special provisions repeal act, 2003, with all the sections, schedules, short title, enactment date, and footnotes.
The sick industrial companies special provisions act. And, whereas, clause b of section 4 of the sick industrial companies special provisions repeal act, 2003 has been substituted by the eighth schedule to the code, which provides that 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. When the sick industrial companies special provisions repeal act was passed in 2003, the idea was to do away with the bifr and let the companies act subsume powers of restructuring. Be it enacted by parliament in the fiftyfourth year of the republic of india as follows. Sick industrial companies act sica government of india. Board for industrial and financial reconstruction, for winding up of a company to a high court and where no appeal is pending, the proceedings for winding up initiated under the act, pursuant to section 20 of the sick industrial companies special provisions act, 1985 shall continue to be. And, whereas, the unamended second proviso to clause b of section 4 of the sick industrial companies special provisions repeal act, 2003 provides that any scheme sanctioned under subsection 4 or any scheme under implementation under subsection 12. It applies to industrial undertakings both in the public and private sectors. Sick industrial companies special provisions act, 1985 sica applicable to scheduled industries1 only and the securitisation and reconstruction of financial assets and enforcement of security interest act, 2002.
Reference to bifr of sickness will halt proceedings before. Mahatma gandhi national rural employment guarantee act, 2005 123 the seventh decade. Sick industrial companies special provisions repeal act. Introduction sick industrial companies special provisions act, 1985, as indicated by its title and preamble, was a special legislation enacted in public interest with the twin objects of securing the timely detection of sick and potentially sick companies speedy determination and enforcement of remedial measures i. Sick industrial companies special provisions act, 1985. Repeal of sick industrial companies special provisions act, 1985. Sick industrial companies special provisions repeal act, 2003 to avoid any further litigation in insolvency proceedings, the code will have an overriding effect over all other laws.
Companies act were never enforced, and thus, the sica repeal law too. Corporate i nsolvency resolution process under the. The most important piece of legislation dealing with industrial sickness was the sick industrial companies special provisions act,1985 sica. Sica was repealed and replaced by the sick industrial companies special provisions repeal act of 2003, which diluted some sica provisions and plugged certain loopholes. The sick industrial companies special provisions act, 1985 sica, which presently deals with the revival and rehabilitation of companies, was repealed by passage of the sick industrial companies special provisions repeal bill, 2001 by the parliament. The repeal act provides for the repeal of the sick industrial companies special provisions act, 1985 sica and related matters. The sick industrial companies act sica was a key piece of legislation dealing with the issue of rampant industrial sickness in india. Selected statewise number of companies declared sick in india 2007 to 2010 selected statewise number of sick sugar mills in india as on 31. 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. Repeal of sick industrial companies special provisions. Revival and rehabilitation of sick companies under new act. 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. Definition of industrial sickness sick industrial companies act, 1985 a unit is defined as sick industrial company where.
Originally, separate provisions were inserted in companies act, 1956 sections 424a to 424l through the companies second amendment act, 2002 to deal with the revival and rehabilitation of sick industrial companies. The board for industrial and financial reconstruction bifr was formed under the sica to determine the sickness of such industrial companies and to. Section 4 in the sick industrial companies special. But some companies perceived sica as an official exit route, thereby resulting into losses to creditors and increased npas in the banking sector sica, 1985, was repealed by sick industrial companies special provisions repeal act, 2003. 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. 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. Sick industrial companies act sica definition investopedia. Chapter xix of the 20 act lays down the provisions for the revival and rehabilitation of sick companies. 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.
In accordance with the policy decision of the government of india, the sick industrial companies special provisions act, 1985 was passed by the parliament which received the assent of the president of india on january 8, 1986. Preface companies second amendment act, 2002 second amendment act partvi a section 424a to 424l were introduced in the companies act, 1956 but not made effective. Act, 2003 1 of 2004 in the manner specified in the eighth schedule to the said code. Home actsofparliamentfromtheyear the sick industrial companies special provisions act, 1985. Industrial companies special provisions repeal act, 2003 repeal act. Impact of sick industrial companies act on enforcement of. But ever since, there have been several rounds of changes and counter changes, which finally led to the enactment of the companies act of 20. 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 problem of sick industrial companies.
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