Bifr
Querist :
Anonymous
(Querist) 14 December 2019
This query is : Resolved
UNDER A SANCTIONED REHABILITATION SCHEME, A PARTY HAS MADE INFUSION OF CAPITAL, THEREAFTER DUE TO BREACH, THE SCHEME FAILED.
Q. WILL THAT PARTY HAVE ANY RIGHTS OVER THE ASSETS OF THE SICK COMPANY ( EVEN TO THE EXTENT OF CAPITAL INFUSED)?
Q2. WHAT WILL BE POSITION WHEREIN PARTY HAS CREATED ADDITIONAL LIABILITY ON SICK COMPANY BY PURCHASE OF ITEMS?
K Rajasekharan
(Expert) 15 December 2019
One way to solve a legal issue is to apply jurisprudence (the philosophy of law) to it.
If we analyse this issue in the eye of jurisprudence it can be seen that the person has right in the company to the extent of his added up investment, if the addition is in consonance with the company law and its procedures.
At the same time, he has liability in the company to the extent of the loss he has made to it as per its law and procedures.
Matching both the above, one can find out his substantive asset or liability in the company.
Kindly ignore this answer in case there is any specific provision or case law that would go against my answer. In such s situation, that would squarely apply to this issue.
Raj Kumar Makkad
(Expert) 15 December 2019
I do endorse the expert advice of Shr Rajshekhran ji.
Dr J C Vashista
(Expert) 26 December 2019
The partner infused capital in the sick company can not have exclusive right over its assets.
Seek opinion and guidance of a local prudent company secretary/ chartered accountant / lawyer for better appreciation of facts / records and professional advise.
T. Kalaiselvan, Advocate
(Expert) 31 December 2019
BIFR stands for Board of Industrial and Financial Reconstruction. It was an agency of Government of India and a part of the Department of Financial Services of the Ministry of Finance. It was established under the Sick Industrial Companies (Special Provisions) Act (SICA), 1985.
On 1 December 2016 Government of India dissolved BIFR through an official notification and all proceedings were to be referred to the NCLT as per Insolvency and Bankruptcy Code.
Now, the MoF, vide notification nos. S.O. 3568(E) and 3569(E), has notified 1 December, 2016, and made provisions of the Repeal Act operative from that date. The Repeal Act (as amended by the Insolvency Act) inter alia provides for Abatement of references/inquiries/ appeals and all other proceedings that were pending before the BIFR/AIFR immediately before the appointed date.
Such terminated appeals or references may be referred to the NCLT, constituted under the Companies Act, 2013, under the provisions of the Insolvency Act within 180 days from the commencement of the Insolvency Act. No fees would be charged on abated appeals/references referred to the NCLT within the prescribed time.
Therefore NCLT may be approached for getting your grievances redressed.
