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Recovery of dues from sick compnay

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praveen

inspector

64 Points Joined August 2012

Respected members u have two Questions Pls clarify with relevant acts

1) I am working for Municipal corp. of greater Mumbai. Muncipal corporation has certain octroi tax liabilities against few companies. Some of them are declared SICK companies by BIFR. Some cases are of year1995 to 2005.

The compnies are declared sick in sucessive years after 1995 to till then. We have got bIFR sanction No. and dates

how can we proceed to recover our dues?

2) What exactly happens when a company is declared SICK. Is it compulsory that the company will be restructured or amalgameted to another company or simply its assets are sold and dues are paid to creditors.?

What is the way for a muncipal corporation to recover the dues which had sent the notices whaen company was active but never got a reply from a company?

Pls reply. Thankss in advance

Replies (1)

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

Provisions relating to sick companies are given in Sick Industrial Companies (Special Provisions) Act 1985 (SICA), copy of which is attached for your reference. After the company has become sick, it has to report to Board for Industrial & Financial Reconstruction (BIFR). BIFR appoints an agency and rehabilitation scheme is prepared. BIFR finally decides whether the company is viable or not. If yes, rehabilitation scheme is sanctioned with reliefs & concessions; if not, BIFR can order winding up of the company.

As per Sec.22 of SICA all legal proceedings against the company by creditors stand suspended. This has overriding effect over all other laws. You can refer following link for details:

https://bifr.nic.in/

Thanks