Brief Introduction of BIFR and its functioning

Posted on 23-04-2016        By ADMIN

Brief Introduction of BIFR and its functioning

In the wake of sickness in the country’s industrial climateprevailing in the eighties, the Government of India set up in 1981, a Committeeof Experts under the Chairmanship of ShriT.Tiwari to examine the matter andrecommend suitable remedies therefore. Based on the recommendations of theCommittee, the Government of India enacted a special legislation namely, theSick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) commonlyknown as the SICA.

The main objective of SICA is to determine sickness andexpedite the revival of potentially viable units or closure of unviable units(unit here in refers to a Sick Industrial Company). It was expected that byrevival, idle investments in sick units will become productive and by closure,the locked up investments in unviable units would get released for productiveuse elsewhere.

The Sick Industrial Companies (Special Provisions) Act, 1985(hereinafter called the Act) was enacted with a view to securing the timelydetection of sick and potential sick companies owning industrial undertakings,the speedy determination by a body of experts of the preventive, ameliorative,remedial and other measure which need to be taken with respect to such companiesand the expeditious enforcement of the measures so determined and for mattersconnected therewith or incidental thereto.

The Board of experts named the Board for Industrial andFinancial Reconstruction (BIFR) was set up in January, 1987 and functional witheffect from 15th May 1987. The Appellate Authority for Industrial andFinancial Reconstruction (AAIRFR) was constituted in April 1987. Governmentcompanies were brought under the purview of SICA in 1991 when extensive changeswere made in the Act including, inter-alia, changes in the criteria fordetermining industrial sickness.

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