Sick Industries and BIFR

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With a Separate Division on
The Securitisation & Reconstruction
of Financial Assets and Enforcement
of Security Interest Act, 2002
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Description
Central Government had amended Companies Act, 1956 through the Companies (Second Amendment) Act, 2002 inserting Part VIA, comprising of sections 424A to 424L dealing with Revival and Rehabilitation of Sick Industrial Companies. Subsequently, Sick Industrial Companies (Special Provisions) Repeal Act, 2003 was enacted to repeal Sick Industrial Companies (Special Provisions) Act, 1985. Main object of Companies (Second Amendment) Act, 2002 was the constitution of the National Company Law Tribunal and the National Company Law Appellate Tribunal. However, the constitutionality of the Tribunal was challenged in various courts and in the case of Union of India v R. Gandhi (2007) 76 SCL 350 (SC) the Supreme Court held that the issues with regard to the constitution of the Tribunal and the areas of their jurisdiction need to be given a fresh look and the matter deserves to be heard by a Constitution Bench. Recently, the Supreme Court has upheld the constitutionality of the Companies (Second Amendment) Act, 2002 but at the same time has shown reservations with regard to the provisions of Parts IB and 1C. So long as the Tribunals are not constituted, Board for Industrial and Financial Reconstruction (BIFR) as well as Appellate Authority for Industrial and Financial Reconstruction (AAIFR) continue to function and deal with the Sick Industrial Companies. Sickness in industry has been an epidemic which continues to plague the industry. This book on Sick Industries and BIFR since its first edition has been appreciated for its contents. The present edition has been thoroughly revised on the basis of the available case law. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was enacted in 2002 to facilitate speedy recovery of the dues of banks and financial institutions from defaulting borrowers. SIC A, 1985 was also amended through this Act inserting two provisos in section 15 which restrain certain companies from making reference to BIFR and in certain cases empower creditors to move against a company whose reference is already registered with BIFR. SARFAESI Act is discussed in detail in a Separate Division. We have maintained the presentation of the book as in the previous edition. Part I covers commentary on the provisions of SIC A, 1985 alongwith related rules, regulations and provisions of allied Acts; Part II
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Contents
PART I The Sick Industrial Companies (Special Provisions) Act, 1985
PART II Sick Industries & Allied Acts
Chapter 1    Effect of order passed by BIFR affecting the provisions of Income-tax Act
Chapter 2    State Financial Corporation Act vis-a-vis Sick Industrial
                        Companies (Special Provisions) Act
Chapter 3    Specimen application for obtaining stay from the Government authorities against
                        the recovery of dues — from Sales-tax authorities and Electricity Boards
Chapter 4    Sick Industries and Employees' Provident Funds and Miscellaneous
                        Provisions Act & ESI Act
Chapter 5    Scheme for Excise Relief for Weak Industrial Units
Chapter 6    Notifications, Press Notes, Circulars, Clarifications etc., Issued under the Act
PART III Reference & Appeal
Chapter 1    Reference to BIFR by Industrial Company other than a Government Company
                        and Procedure under the Act
Chapter 2    Reference by Government Companies
Chapter 3    Procedure for Appeal to Appellate Authority
PART IV Sick Industrial Units — Operating Agency & Preparation of Schemes
Chapter 1    Sick Industrial Units — Operating Agency and
                        Preparation of Schemes   
Chapter 2    Guidelines for Rehabilitation of Sick Small Scale
                        Industrial Units   
PART V Case Studies
Chapter 1     Case Studies 
PART VI The Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002
Chapter 1    Scope of the Act 
Chapter 2    Enforcement of Security Interest                                  
Chapter 3    Debt   Securitisation/Reconstruction:   A   Financial
Product
Chapter 4     Borrower and the Act 
PART VII State VAT/Sales-Tax Incentive Schemes
Chapter 1    State VAT/Sales Tax Laws and sick industries  
Appendices Text of Goswami Committee Report
Appendix 1    Report of the Committee on Industrial Sickness and
                           Corporate Restructuring   
SUBJECT INDEX   
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Author Details
H.P.S. Pahwa did Masters in Business Administration from Faculty of Management Studies, Delhi University in the year 1975. He started his carrier as Probationary Officer in Bank of India and subsequently shifted to PICUR a premier State development financial institution. He has over a decade of rich experience in banking and development banking. He is a prolific writer and has contributed articles to several professional journals like 'Chartered Secretary' and 'Chartered Accountant'. His article on 'Lease Financing' has been adjudged as one of the best thought-provoking and incisive papers on the subject and has been selected for the book 'Readings in Financial Management1 published by the University of Rajasthan. He is also the author of three very well received books, namely, 'Project Financing', 'Sick Industries & BIFR' and 'Guide to Technical Analysis'. He has worked for several years as the Senior Finance Manager, PICUP a State Financial Corporation before seeking premature voluntary retirement to venture as a consultant and advisor to the corporate sector.
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