The Board for Industrial and Financial Reconstruction was an organization of the Govt. It incorporated some portion of the Department of Financial Services of the Ministry of Finance. BIFR was set up in January 1987 by the Rajiv Gandhi government, under the Sick Industrial Companies (Special Provisions) Act, 1985. It aimed to rejuvenate and recover wiped out associations and closing down or liquidation of the ability to create or occurring of confinement later on or not beneficial organizations. It offered proper renewal bundles relying upon the idea of the emergency or inconvenience. The BIFR came to an end on 1st od December 2016 by the government of India and all the proceeding were then referred to the NLCT and NLCAT under the feeds of the Insolvency and Bankruptcy Code.
The BIFR was set up under The Sick Industrial Companies (Special Provisions) Act, 1985. The cabinet was established in January 1987 and got practical starting on 15 May 1987. Another industrial guideline was proposed in Parliament on 24 July 1991 expecting to keep up development in yield and productive employment and to energize the development of enterprise and moves up to innovation. That year the SICA was corrected to incorporate public sector ventures in the board's domain.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act of 2002 set corporate obligation outside the domain of the BIFR. By forbidding reference to the BIFR, which had become a safe house for the advertisers of confined organizations, the Act gives banks and financial foundations a superior apparatus for collecting write-off. It was supplemented by the corporate credit restructuring batch under which granters and borrowers would meet to comply on a method of reworking on stressed loans.
National Company Law Tribunal and National Company Law Appellate Tribunal would have assumed control over the elements of BIFR and various bodies and have accelerated the way towards abolishing of sick organizations. The Companies Bill, 2001 was presented because the govt thought that the BIFR had not met its goal of forbidding industrial ailment. The Sick Industrial Companies Repeal Act, 2003 expelled SICA and tried to broke BIFR and Appellate Authority for Industrial and Financial Reconstruction substituting them by NCLT and NCLAT. Although, legitimate obstacles kept the NCLT from being established.
On 1 December 2016, the Government suspended BIFR through an official declaration and according to Insolvency and Bankruptcy Code, all the activities and measures were to have presented to the NCLT.
The Board has a Chairman and from two to fourteen various individuals, all to be qualified as High Court judges or, more than likely to have fifteen years of appropriate competent experience.
Under the SICA, the Board of a sick industrial organization was constitutionally compelled to report it to the BIFR, and the BIFR could make whatever petitions were expected to decide, whether the organization was sick or not.
Among various targets, the policy was to give an approach, to bring back to life sick industrial organizations and discharge public assets. If an organization was seen as to be confined, the BIFR could give the organization justifiable time to recover wellbeing, or it could suggest various other measures. The board could take different activities to perform, including changes to the authorities, the amalgamation of the confined unit with a sound one, market or financial remaking. The board could suggest the organization to shut down.
The BIFR was proposed to connect the constitutional break among sickness and restoration. It would force-time plans for recovery related exercises to be finished, administer their usage and lead occasional audits of sick records. The BIFR would call a conference for sharing perspectives, planning work and building up a consolidated resolution for dealing with sick organizations, accelerating the beginning of reconstructing activities. The BIFR was intended to turn sick organizations into profitable organisations in a half year or to request winding-up of the organisations.
1. What Was the Role of BIFR?
Ans: The job of BIFR as anticipated in the Sick Industrial Companies Act was:
a) Securing the convenient recognition of sick and conceivably wiped out organizations.
b) Speedy assurance by a gathering of specialists for choosing different proper
schemes concerning the wiped out organizations.
c) Expeditious authorization of such measures.
2. What is a Sick Company?
Ans: Sick Industrial unit is characterized as a unit or an organization (having been in presence for at least five years) which is found at the end of any financial year to have caused aggregated misfortunes equivalent to or surpassing its whole total assets.
3. What is Meant by SICA?
Ans: Sick Industrial Companies Act, 1985 is the act that had been developed to address the continuing problem of Indian Economy that is the Industrial Sickness.
4. What is the Major Consequence of Industrial Sickness?
Ans: One of the genuine outcomes of Industrial Sickness has been the misfortune to employment and, consequently, provoking the most risky financial issue of unemployment in a human resource surplus economy.
5. What are the Factors that Cause Industrial Sickness?
Ans: The interior variables which add to ailment are wrong preparation concerning area, innovation, capital cost, technological discontinuance, the authority inadequacies and modern turmoil.