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The Sick Industrial Companies special Provisions Act, 1985

THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT
ACT NO. 1 OF
8th January
An Act to make in the public interest special provisions with a view
to securing the timely detection of sick and potentially sick
companies owning industrial undertakings the speedy determination by
a Board of experts of the preventive ameliorative remedial and other
measures which need to be taken with respect to such companies and the
expeditious enforcement of the measures so determined and for matters
connected therewith or incidental thereto.

BE it enacted by Parliament in the Thirty – sixth Year of the
Republic of India as follows:–

CHAP

PRELIMINARY

CHAPTER I

PRELIMINARY

1. Short title extent commencement and application.

1. Short title extent commencement and application. (1) This
Act may be called the Sick Industrial Companies (Special Provisions)
Act 1985.

(2) It extends to the whole of India.

(3) It shall come into force on such date as the Central
Government may by notification in the Official Gazette appoint and
different dates may be appointed for different provisions of this
Act and any reference in any provision of this Act to the commencement
of this Act shall be construed as a reference to the commencement of
that provision.

(4) It shall apply in the first instance to all the scheduled
industries other than the scheduled industry relating to ships and
other vessels drawn by power.

(5) The Central Government may in consultation with the Reserve
Bank of India by notification apply the provisions of this Act on
and from such date as may be specified in the notification to the
scheduled industry relating to ships and other vessels drawn by power.

2. Declaration.

2. Declaration. It is hereby declared that this Act is for giving
effect to the policy of the State towards securing the principles
specified in clauses (b) and (c) of article 39 of the Constitution.

3. Definitions.

3. Definitions. (1) In this Act unless the context otherwise
requires–

(a) Appellate Authority means the Appellate Authority for
Industrial and Financial Reconstruction constituted under section
5;

(b) Board means the Board for Industrial and Financial
Reconstruction established under section 4;

12th January 1987 vide Notification No. G.S.R. 24 (E) dated
12-1-1987 (except sections 15 to 34) Gazette of India
Extraordinary Part – II section 3(i).

15th May 1987 vide Notification No. S.O. 444 (E) dated 28-4-
1987 (in respect of sections 15 to 34) Gazette of India
Extraordinary Part – II section 3(ii).

(c) Chairman means the Chairman of the Board or as the
case may be the Appellate Authority;

(d) company means a company as defined in section 3 of the
Companies Act 1956 (1 of 1956) ;

(da) date of finalisation of the duly audited accounts
means the date on which the audited accounts of the company are
adopted at the annual general meeting of the company;

(e) industrial company means a company which owns one or
more industrial undertakings;

(f) industrial undertaking means any undertaking
pertaining to a scheduled industry carried on in one or more
factories by any company but does not include–

(i) an ancillary industrial undertaking as defined in
clause (aa) of section 3 of the Industries (Development and
Regulation) Act 1951 (65 of 1951); and

(ii) a small scale industrial undertaking as defined in
clause (j) of the aforesaid section 3;

(g) Member means a Member of the Board or as the case may
be the Appellate Authority and includes the Chairman thereof;

(ga) net worth means the sum total of the paid – up
capital and free reserves.

Explanation: — For the purposes of this clause free rese-
rves means all reserves credited out of the profits and share premium
account but does not include reserves credited out of re – evaluation of
assests write back of depreciation provisions and amalgamation;

(h) notification means a notification published in the
Official Gazette;

(i) operating agency means any public financial
institution State level institution scheduled bank or any other
person as may be specified by general or special order as its
agency by the Board;

(j) prescribed means prescribed by rules made under this
Act;

Omitted by Act 57 of 1991 s. 2.

Ins. by Act 12 of 1994 s. 2.

Subs. by s. 12 ibid.

Omitted by s. 12 ibid.

(l) Reserve Bank means the Reserve Bank of India
constituted under section 3 of the Reserve Bank of India Act
1934 (2 of 1934);

(m) scheduled bank means a bank for the time being
included in the Second Schedule to the Reserve Bank of India Act
1934 (2 of 1934);

(n) scheduled industry means any of the industries
specified for the time being in the First Schedule to the
Industries (Development and Regulation) Act 1951 (65 of 1951);

(o) sick industrial company means an industrial company
(being a company registered for not less than five years) which
has at the end of any financial year accumulated losses equal to
or exceeding its entire net worth.

Explanation: — For the removal of doubts it is hereby
declared that an industrial company existing immediately before
the commencement of the Sick Industrial Companies (Special Provi-
sion) Amendment Act 1993 (12 of 1994) registered for not less
than five years and having at the end of any financial year
accumulated losses equal to or exceeding its entire net worth
shall be deemed to be a sick industrial company

(p) State level institution means any of the following
institutions namely:–

(i) State Financial Corporations established under
section 3 or section 3A and institutions notified under
section 46 of the State Financial Corporations Act 1951 (63
of 1951);

(ii) State industrial development corporations
registered under the Companies Act 1956 (1 of 1956);

(iii) such other institutions being companies and not
being public financial institutions engaged in the
development or financing of industrial undertakings as the
Central Government may by notification specify:

Provided that no institution shall be so specified unless not
less than fifty – one per cent. of the paid – up share capital thereof is
held by any State Government or Governments or by any institution or
institutions mentioned in sub – clauses (i) and (ii) or partly by one or
more public financial institutions or institutions mentioned in sub-
clauses (i) and (ii) and partly by one or more State Governments.

(2) (a) Words and expressions used and not defined in this Act
shall have the meanings if any respectively assigned to them in the
Companies Act 1956 (1 of 1956).

(b) Words and expressions used but not defined either in this Act
or in the Companies Act 1956 (1 of 1956) shall have the meanings if
any respectively assigned to them in the Industries (Development and
Regulation) Act 1951 (65 of 1951).

Subs. by Act 12 of 1994 s. 2.

(3) Any reference in this Act to any other enactment or any
provision thereof shall in relation to an area in which such
enactment or such provision is not in force be construed as a
reference to the corresponding law or the relevant provision of the
corresponding law if any in force in that area.

CHAP

BOARD AND APPELLATE AUTHORITY FOR INDUSTRIAL AND
FINANCIALRECONSTRUCTION

CHAPTER II

BOARD AND APPELLATE AUTHORITY FOR INDUSTRIAL AND FINANCIAL
RECONSTRUCTION

4. Establishment of Board.

4. Establishment of Board. (1) With effect from such date as the
Central Government may by notification appoint there shall be
established a Board to be known as the Board for Industrial and
Financial Reconstruction to exercise the jurisdiction and powers and
discharge the functions and duties conferred or imposed on the Board
by or under this Act.

(2) The Board shall consist of a Chairman and not less than two
and not more than fourteen other Members to be appointed by the
Central Government.

(3) The Chairman and other Members of the Board shall be persons
who are or have been or are qualified to be High Court Judges or
persons of ability integrity and standing who have special knowledge
of and professional experience of not less than fifteen years in
science technology economics banking industry law labour matters
industrial finance industrial management industrial reconstruction
administration investment accountancy marketing or any other
matter the special knowledge of or professional experience in which
would in the opinion of the Central Government be useful to the Board.

5. Constitution of Appellate Authority.

5. Constitution of Appellate Authority. (1) The Central
Government may by notification constitute with effect from such
date as may be specified therein an appellate authority to be called
the Appellate Authority for Industrial and Financial Reconstruction
consisting of a Chairman and not more than three other Members to be
appointed by that Government for hearing appeals against the orders
of the Board under this Act.

(2) The Chairman shall be a person who is or has been a Judge of
the Supreme Court or who is or has been a Judge of a High Court for
not less than five years.

(3) A Member of the Appellate Authority shall be a person who is
or has been a Judge of a High Court or who is or has been an officer
not below the rank of a Secretary to the Government of India or who is
or has been a Member of the Board for not less than three years.

6. Term of office conditions of service etc.

of Chairman and otherMembers.

6. Term of office conditions of service etc. of Chairman and
other Members. (1) Before appointing any person as the Chairman or
other Member the Central Government shall satisfy itself that the
person does not and will not have any such financial or other
interest as is likely to affect prejudicially his functions as such
Member.

(2) The Chairman and every other Member shall hold office for
such period not exceeding five years as may be specified by the
Central Government in the order of his appointment but shall be
eligible for reappointment:

Provided that no person shall hold office as the Chairman or
other Member after he has attained the age of sixty – five years.

(3) Notwithstanding anything contained in sub – section (1) a
Member may–

(a) by writing under his hand and addressed to the Central
Government resign his office at any time;

(b) be removed from his office in accordance with the
provisions of section 7.

(4) A vacancy caused by the resignation or removal of the
Chairman or any other Member under sub – section (3) or otherwise shall
be filled by fresh appointment.

(5) In the event of the occurrence of a vacancy in the office of
the Chairman by reason of his death resignation or otherwise such
one of the Members as the Central Government may by notification
authorise in this behalf shall act as the Chairman till the date on
which a new Chairman appointed in accordance with the provisions of
this Act to fill such vacancy enters upon his office.

(6) When the Chairman is unable to discharge his functions owing
to absence illness or any other cause such one of the Members as the
Chairman may authorise in writing in this behalf shall discharge the
functions of the Chairman till the date on which the Chairman resumes
his duties.

(7) The salaries and allowances payable to and the other terms
and conditions of service of the Chairman and other Members shall be
such as may be prescribed:

Provided that neither the salary and allowances nor the other
terms and conditions of service of the Chairman or any other Member
shall be varied to his disadvantage after his appointment.

(8) The Chairman and every other Member shall before entering
upon his office make a declaration of fidelity and secrecy in the
form set out in the Schedule.

(9) The Chairman or any other Member ceasing to hold office as
such shall not hold any appointment or be connected with the
management or administration in any company in relation to which any
matter has been the subject matter of consideration before the Board
or as the case may be the Appellate Authority for a period of five
years from the date on which he ceases to hold such office.

7. Removal of Members from office in certain circumstances.

7. Removal of Members from office in certain circumstances. (1)
The Central Government may remove from office any Member who–

(a) has been adjudged as insolvent or

(b) has been convicted of an offence which in the opinion
of the Central Government involves moral turpitude or

(c) has become physically or mentally incapable of acting as
a Member or

(d) has acquired such financial or other interest as is
likely to affect prejudicially his functions as a Member or

(e) has so abused his position as to render his continuance
in office prejudicial to the public interest.

(2) Notwithstanding anything contained in sub – section (1) no
Member shall be removed from his office on the ground specified in
clause (d) or clause (e) of that sub – section unless the Supreme Court
on a reference being made to it in this behalf by the Central
Government has on an inquiry held by it in accordance with such
procedure as it may specify in this behalf reported that the Member
ought on such grounds to be removed.

8. Secretary officers and other employees of Board or AppellateAuthority.

8. Secretary officers and other employees of Board or Appellate
Authority. (1) The Central Government shall appoint a Secretary to the
Board and a Secretary (by whatever name called) to the Appellate
Authority to exercise and perform under the control of the Chairman
such powers and duties as may be prescribed or as may be specified by
the Chairman.

(2) The Central Government may provide the Board and the Appe-
llate Authority with such other officers and employees as may be
necessary for the efficient performance of the functions of the Board
and the Appellate Authority

(3) The salaries and allowances payable to and the conditions of
service of the Secretary and other officers and employees of the Board
and the Appellate Authority shall be such as may prescribed:

Provided that such Secretary officer or other employee shall
before entering upon his duties make a declaration of fidelity and
secrecy in the form set out in the Schedule.

9. Salaries etc.

be defrayed out of the Consolidated Fund of India.

9. Salaries etc. be defrayed out of the Consolidated Fund of
India. The salaries and allowances payable to the Members and the
administrative expenses including salaries allowances and pension
payable to or in respect of the officers and other employees of the
Board and the Appellate Authority shall be defrayed out of the
Consolidated Fund of India.

10. Vacancies etc.

not to invalidate proceedings of Board and AppellateAuthority.

10. Vacancies etc. not to invalidate proceedings of Board and
Appellate Authority. No act or proceeding of the Board or as the case
may be the Appellate Authority shall be questioned on the ground
merely of the existence of any vacancy or defect in the constitution
of the Board or the Appellate Authority or any defect in the
appointment of a person acting as a Member of the Board or the
Appellate Authority.

11. Members and staff of Board and Appellate Authority to be publicservants.

11. Members and staff of Board and Appellate Authority to be
public servants. The Chairman and other Members and the officers and
other employees of the Board and the Appellate Authority shall be
deemed to be public servants within the meaning of section 21 of the
Indian Penal Code (45 of 1860).

12. Constitution of Benches of Board or Appellate Authority.

12. Constitution of Benches of Board or Appellate Authority. (1)
The jurisdiction powers and authority of the Board or the Appellate
Authority may be exercised by Benches thereof.

(2) The Benches shall be constituted by the Chairman and each
Bench shall consist of not less than two Members.

(3) If the members of a Bench differ in opinion on any point
the point shall be decided according to the opinion of the majority
if there is a majority but if the Members are equally divided they
shall state the point or points on whcih they differ and make a
reference to the Chairman of the Board or as the case may be the
Appellate Authority who shall either hear the point or points himself
or refer the case for hearing on such point or points by one or more
of the other Members and such point or points shall be decided accor-
ding to the opinion of the majority of the Members who have heard the
case including those who first heard it

Subs. by Act 12 of 1994 s. 3.

Subs. by s. 4 ibid.

13. Procedure of Board and Appellate Authority.

13. Procedure of Board and Appellate Authority. (1) Subject to
the provisions of this Act the Board or as the case may be the
Appellate Authority shall have powers to regulate–

(a) the procedure and conduct of the business;

(b) the procedure of the Benches including the places at
which the sittings of the Benches shall be held;

(c) the delegation to one or more Members of such powers or
functions as the Board or as the case may be the Appellate
Authority may specify.

(2) In particular and without prejudice to the generality of the
foregoing provisions the powers of the Board or as the case may be
the Appellate Authority shall include the power to determine the
extent to which persons interested or claiming to be interested in the
subject matter of any proceeding before it may be allowed to be
present or to be heard either by themselves or by their
representatives or to cross – examine witnesses or otherwise to take
part in the proceedings.

(3) The Board or the Appellate Authority shall for the purposes
of any inquiry or for any other purpose under this Act have the same
powers as are vested in a civil court under the Code of Civil
Procedure 1908 (5 of 1908) while trying suits in respect of the
following matters namely:–

(a) the summoning and enforcing the attendance of any
witness and examining him on oath;

(b) the discovery and production of document or other
material object producible as evidence;

(c) the reception of evidence on affidavit;

(d) the requisitioning of any public record from any court
or office;

(e) the issuing of any commission for the examination of
witnesses;

(f) any other matter which may be prescribed.

14. Proceedings before Board or Appellate Authority to be
judicialproceedings.

14. Proceedings before Board or Appellate Authority to be
judicial proceedings. The Board or the Appellate Authority shall be
deemed to be a civil court for the purposes of section 195 and Chapter
XXVI of the Code of Criminal Procedure 1973 (2 of 1974) and every
proceeding before the Board or the Appellate Authority shall be deemed
to be a judicial proceeding within the meaning of sections 193 and
and for the purposes of section 196 of the Indian Penal Code (45 of
1860).

CHAP

REFERENCES INQUIRIES AND SCHEMES

CHAPTER III

REFERENCES INQUIRIES AND SCHEMES

15. Reference to Board.

15. Reference to Board. (1) Where an industrial company has
become a sick industrial company the Board of Directors of the
company shall within sixty days from the date of finalisation of the
duly audited accounts of the company for the financial year as at the
end of which the company has become a

sick industrial company make a reference to the Board for
determination of the measures which shall be adopted with respect to
the company:

Provided that if the Board of Directors had sufficient reasons
even before such finalisation to form the opinion that the company had
become a sick industrial company the Board of Directors shall within
sixty days after it has formed such opinion make a reference to the
Board for the determination of the measures which shall be adopted
with respect to the company.

(2) Without prejudice to the provisions of sub – section (1) the
Central Government or the Reserve Bank or a State Government or a
public financial institution or a State level institution or a
scheduled bank may if it has sufficient reasons to believe that any
industrial company has become for the purposes of this Act a sick
industrial company make a reference in respect of such company to the
Board for determination of the measures which may be adopted with
respect to such company:

Provided that a reference shall not be made under this sub-
section in respect of any industrial company by–

(a) the Government of any State unless all or any of the
industrial undertakings belonging to such company are situated in
such State;

(b) a public financial institution or a State level
institution or a schduled bank unless it has by reason of any
financial assistance or obligation rendered by it or undertaken
by it with respect to such company an interest in such
company.

16. Inquiry into working of sick industrial companies.

16. Inquiry into working of sick industrial companies. (1) The
Board may make such inquiry as it may deem fit for determining whether
any industrial company has become a sick industrial company–

(a) upon receipt of a reference with respect to such company
under section 15; or

(b) upon information received with respect to such company
or upon its own knowledge as to the financial condition of the
company.

(2) The Board may if it deems necessary or expedient so to do
for the expeditious disposal of an inquiry under sub – section (1)
require by order any operating agency to enquire into and make a
report with respect to such matters as may be specified in the order.

(3) The Board or as the case may be the operating agency shall
complete its inquiry as expeditiously as possible and endeavour shall
be made to complete the inquiry within sixty days from the
commencement of the inquiry.

Explanation: — For the purposes of this sub – section an
inquiry shall be deemed to have commenced upon the receipt by the
Board of any reference or information or upon its own knowledge
reduced to writing by the Board

(4) Where the Board deems it fit to make an inquiry or to cause
an inquiry to be made into any industrial company under sub – section
(1) or as the case may be under sub – section (2) it may appoint
one or more persons to be a special director or special directors of
the company for safeguarding the financial and other interests of the
company or in the public interest

(4A) The Board may issue such directions to a special
direcctor appointed under sub – section (4) as it may deem necessary or
expedient for proper discharge of his duties

(5) The appointment of a special director referred to in sub-
section (4) shall be valid and effective notwithstanding anything to
the contrary contained in the Companies Act 1956 (1 of 1956) or in
any other law for the time

Ins. by Act 12 of 1994 s. 5.

Subs. by s. 5 ibid.

being in force or in the memorandum and articles of association or any
other instrument relating to the industrial company and any provision
regarding share qualification age limit number of directorships
removal from office of directors and such like conditions contained in
any such law or instrument aforesaid shall not apply to any director
appointed by the Board.

(6) Any special director appointed under sub – section (4) shall–

(a) hold office during the pleasure of the Board and may be
removed or substituted by any person by order in writing by the
Board;

(b) not incur any obligation or liability by reason only of
his being a director or for anything done or omitted to be done
in good faith in the discharge of his duties as a director or
anything in relation thereto;

(c) not be liable to retirement by rotation and shall not be
taken into account for computing the number of directors liable
to such retirement;

(d) not be liable to be prosecuted under any law for any-
thing done or omitted to be done in good faith in the discharge
of his duties in relation to the sick industrial company

17. Powers of Board to make suitable order on the completion of inquiry.

17. Powers of Board to make suitable order on the completion of
inquiry. (1) If after making an inquiry under section 16 the Board is
satisfied that a company has become a sick industrial company the
Board shall after considering all the relevant facts and
circumstances of the case decide as soon as may be by order in
writing whether it is practicable for the company to make its
net worth exceed the accumulated losses within a reasonable time.

(2) If the Board decides under sub – section (1) that it is
practicable for a sick industrial company to make its net worth
positive within a reasonable time the Board shall by order in
writing and subject to such restrictions or conditions as may be
specified in the order give such time to the company as it may deem
fit to make its net worth exceed the accumulated losses

(3) If the Board decides under sub – section (1) that it is not
practicable for a sick industrial company to make its net worth
exceed the accumulated losses within a reasonable time and that it is
necessary or expedient in the public interest to adopt all or any of
the measures specified in section 18 in relation to the said company
it may as soon as may be by order in writing direct any operating
agency specified in the order to prepare having regard to such
guidelines as may be specified in the order a scheme providing for
such measures in relation to such company.

(4) The Board may–

(a) if any of the restrictions or conditions specified in an
order made under sub – section (2) are not complied with by the
compay concerned or if the company fails to revive in
pursuance of the said order review such order on a referenc in
that behalf from any agency referred to in sub – section (2) of
section 15 or on its own motion and pass a fresh order in
respect of such company under sub – section (3);

(b) if the operating agency specified in an order made under
sub – section (3) makes a submission in that behalf review such
order and modify the order in such manner as it may deem
appropriate.

Ins. by Act 12 of 1994 s. 5.

Subs. by s. 6 ibid.

Ins. by s. 6 ibid.

18. Preparation and sanction of Schemes.

18. Preparation and sanction of Schemes. (1) Where an order is
made under sub – section (3) of section 17 in relation to any sick
industrial company the operating agency specified in the order shall
prepare as expeditiously as possible and ordinarily within a period
of ninety days from the date of such order a scheme with respect to
such company providing providing for any one or more of the following
measures namely:–

(a) the financial reconstruction of the sick industrial
company;

(b) the proper management of the sick industrial company by
change in or take over of management of the sick industrial
company;

(c) the amalgamation of —

(i) the sicck industrial company with any other company
or

(ii) any other company with the sick industrial company;

(hereafter in this section in the case of sub – clause (i) the other
company and in the case of sub – clause (ii) the sick industrial
company referred to as transferee company);

(d) the sale or lease of a part or whole of any industrial
undertaking of the sick industrial company;

(da) the rationalisation of managerial personnel
supervisory staff and workmen in accordance with law;

(e) such other preventive ameliorative and remedial
measures as may be appropriate;

(f) such incidental consequential or supplemental measures
as may be necessary or expedient in connection with or for the
purposes of the measures specified in clauses (a) to (e).

(2) The scheme referred to in sub – section (1) may provide for any
one or more of the following namely:–

(a) the constitution name and registered office the
capital assets powers rights interests authorities and
privileges duties and obligations of the sick industrial company
or as the case may be of the transferee company;

(b) the transfer to the transferee company of the
business properties assets and liabilities of the sick
industrial company on such terms and conditions as may be
specified in the scheme;

(c) any change in the Board of Directors or the appointment
of a new Board of Directors of the sick industrial company and
the authority by whom the manner in which and the other terms
and conditions on which such change or appointment shall be made
and in the case of appointment of a new Board of Directors or of
any director the period for which such appointment shall be
made;

(d) the alteration of the memorandum or articles of
association of the sick industrial company or as the case may
be of the transferee company for the purpose of altering
the capital structure thereof or for such other purposes as may
be necessary to give effect to the reconstruction or
amalgamation;

(e) the continuation by or against the sick industrial
company or as the case may be the transferee company of
any action or other legal proceeding pending against the sick
industrial company immediately before the date of the order made
under sub – section (3) of section 17;

(f) the reduction of the interest or rights which the
shareholders have in the sick industrial company to such extent
as the Board

Subs. by Act 12 of 1994 s. 7.

Ins. by s. 7 ibid.

considers necessary in the interests of the reconstruction
revival or rehabilitation of the sick industrial company or for
the maintenance of the business of the sick industrial company;

(g) the allotment to the shareholders of the sick industrial
company of shares in the sick industrial company or as the case
may be in the transferee company and where any shareholder
claims payment in cash and not allotment of shares or where it
is not possible to allot shares to any shareholder the payment
of cash to those shareholders in full satisfaction of their
their claims–

(i) in respect of their interest in shares in the sick
industrial company before its reconstruction or
amalgamation; or

(ii) where such interest has been reduced under clause
(f) in respect of their interest in shares as so reduced;

(h) any other terms and conditions for the reconstruction or
amalgamation of the sick industrial company;

(i) sale of the industrial undertaking of the sick
industrial company free from all encumbrances and all liabilities
of the company or other such encumbrances and liabilities as may
be specified to any person including a co – operative society
formed by the employees of such undertaking and fixing of reserve
price for such sale;

(j) lease of the industrial undertaking of the sick
industrial company to any person including a co – operative
society formed by the employees of such undertaking;

(k) method of sale of the assets of the industrial
undertaking of the sick industrial company such as by public
auction or by inviting tenders or in any other manner as may be
specified and for the manner of publicity therefor;

(l) transfer or issue of the shares in the sick industrial
company at the face value or at the intrinsic value which may be
at discount value or such other value as may be specified to any
industrial company or any person including the executives and
employees of the sick industrial company;

(m) such incidental consequential and supplemental matters
as may be necessary to secure that the reconstruction or
amalgamation or other measures mentioned in the scheme are fully
and effectively carried out.

(3) (a) The scheme prepared by the operating agency shall be
examined by the Board and a copy of the scheme with modification if
any made by the Board shall be sent in draft to the sick industrial
company and the operating agency and in the case of amalgamation also
to any other company concerned and the Board shall publish or cause
to be published the draft scheme in brief in such daily newspapers as
the Board may consider necessary for suggestions and objections if
any within such period as the Board may specify;

(b) The Board may make such modifications if any in the draft
scheme as it may consider necessary in the light of the suggestions
and objections received from the sick industrial company and the
operating agency and also from the transferee industrial company and
any other

Subs. by Act 12 of 1994 s. 7.

company concerned in the amalgamation and from any shareholder
or any creditors or employees of such companies:

Provided that where the scheme relates to amalgamation
the said scheme shall be laid before the company other than the
sick industrial company in the general meeting for the approval of
the scheme by its shareholders and no such scheme shall be proceeded
with unless it has been approved with or without modification by a
special resolution passed by the shareholders of the company other
than the sick industrial company

(4) The scheme shall thereafter be sanctioned as soon as may be
by the Board (hereinafter referred to as the ‘sanctioned scheme’) and
shall come into force on such date as the Board may specify in this
behalf:

Provided that different dates may be specified for different
provisions of the scheme.

(5) The Board may on the recommendations of the operating agency
or otherwise review any sanctioned scheme and make such modifications
as it may deem fit or may by order in writing direct any operating
agency specified in the order having regard to such guidelines as may
be specified in the order to prepare a fresh scheme providing for
such measures as the operating agency may consider necessary.

(6) When a fresh scheme is prepared under sub – section (5) the
provisions of sub – sections (3) and (4) shall apply in relation thereto
as they apply to in relation to a scheme prepared under sub – section
(1).

(6A) Where a sanctioned scheme provides for the transfer of
any property or liability of the sick industrial company in favour of
any other company or person or where such scheme provides for the
transfer of any property or liability of any other company or person
in favour of the sick industrial company then by virtue of and to
the extent provided in the scheme on and from the date of coming
into operation of the sanctioned scheme or any provision thereof the
property shall be transferred to and vest in and the liability shall
become the liability of such other company or person or as the case
may be the sick industrial company

(7) The sanction accorded by the Board under sub – section (4)
shall be conclusive evidence that all the requirements of this scheme
relating to the reconstruction or amalgamation or any other measure
specified therein have been complied with and a copy of the sanctioned
scheme certified in writing by an officer of the Board to be a true
copy thereof shall in all legal proceedings (whether in appeal or
otherwise) be admitted as evidence.

(8) On and from the date of the coming into operation of the
sanctioned scheme or any provision thereof the scheme or such
provision shall be binding on the sick industrial company and the
transferee company or as the case may be the other company and also
on the shareholders creditors and guarantors and employees of the
said companies

(9) If any difficulty arises in giving effect to the provisions
of the sanctioned scheme the Board may on the recommendation of the
operating agency or otherwise by order to anything not
inconsistent with such provisions which appears to it to be necessary
or expedient for the purpose of removing the difficulty.

(10) The Board may if it deems necessary or expedient so to do
by order in writing direct any operating agency specified in the
order to implement a sanctioned scheme with such terms and conditions
and in relation to such sick industrial company as may be specified in
the order.

(11) Where the whole of the undertaking of the sick industrial
company is sold under a sanctioned scheme the Board may distribute
the sale

Subs. by Act 12 of 1994 s. 7.

Omitted by s. 7 ibid.

Ins. by s. 7 ibid.

proceeds to the parties entitled thereto in accordance with the provi-
visions of section 529A amd other provisions of the Companies Act
1956 (1 of 1956).

(12) The Board may monitor periodically the implementation of
the sanctioned scheme

19. Rehabilitation by giving financial assistance.

19. Rehabilitation by giving financial assistance. (1) Where the
scheme relates to preventive ameliorative remedial and other
measures with respect to any sick industrial company the scheme may
provide for financial assistance by way of loans advances or
guarantees or reliefs or concessions or sacrifices from the Central
Government a State Government any scheduled bank or other bank a
public financial institution or State level institution or any
institution or other authority (any Government bank institution or
other authority required by a scheme to provide for such financial
assistance being hereafter in this section referred to as the person
required by the scheme to provide financial assistance) to the sick
industrial company.

(2) Every scheme referred to in sub – section (1) shall be
circulated to every person required by the scheme to provide financial
assistance for his consent within a period of sixty days from the date
of such circulation or within such further period not exceeding
sixty days as may be allowed by the Board and if no consent is
received within such period or further period it shall be deemed that
consent has been given

(3) Where in respect of any scheme the consent referred to in
sub – section (2) is given by every person required by the scheme to
provide financial assistance the Board may as soon as may be
sanction the scheme and on and from the date of such sanction the
scheme shall be binding on all concerned.

(3A) One the sanction of the scheme under sub – section (3) the
financial institutions and the banks required to provide financial
assistance shall designate by mutual agreement a financial institution
and a bank from amongst themselves which shall be responsible to
desburse financial assistance by way of loans or advances or guaran-
tees or reliefs or concessions or sacrifices agreed to be provided or
granted under the scheme on behalf of all financial institutions and
banks concerned.

(3B) The financial institution and the bank designated under
sub – section (3A) shall forthwith proceed to release the financial
assistance to the sick industrial company in fulfilment of the requir-
ment in this regard

(4) Where in respect of any scheme consent under sub – section (2)
is not given by any person required by the scheme to provide financial
assistance the Board may adopt such other measures including the
winding up of the sick industrial company as it may deem fit.

19A. Arrangement for continuing operations etc.

during inquiry. 19A.
Arrangement for continuing operations etc. duringinquiry. (1) At any
time before completion of the inquiry under

20. Winding up of sick industrial company.

20. Winding up of sick industrial company. (1) Where the
Board after making inquiry under section 16 and after consideration
of all the relevant facts and circumstances and after giving an
apportunity of being heard to all concerned parties is of opinion
that the sick industrial company is not likely to make its networth
exceed the accumulated losses within a reasonable time while meeting
all its financial obligations and that the company as a result thereof
is not likely to become viable in future and that it is just and
equitable that the company should be wound up it may record and
forward its opinion to the concerned High Court

(2) The High Court shall on the basis of the opinion of the
Board order winding up of the sick industrial company and may proceed
and cause to proceed with the winding up of the sick industrial
company in accordance with the provisions of the Companies Act
(1 of 1956).

(3) For the purpose of winding up of the sick industrial company
the High Court may appoint any officer of the operating agency if the
operating agency gives its consent as the liquidator of the sick
industrial company and the officer so appointed shall for the purposes
of the winding up of the sick industrial company be deemed to be and
have all the powers of the official liquidator under the Companies
Act 1956 (1 of 1956).

(4) Notwithstanding anything contained in sub – section (2) or sub-
section (3) the Board may cause to be sold the assets of the sick
industrial company in such manner as it may deem fit and forward the
sale proceeds to the High Court for orders for distribution in
accordance with the provisions of section 529A and other provisions
of the Companies Act 1956 (1 of 1956).

Ins. by Act 12 of 1994 s. 7.

Ins. by s. 8 ibid.

Ins. by s. 9 ibid.

Subs. by s. 10 ibid.

21. Operating agency to prepare complete inventory etc.

21. Operating agency to prepare complete inventory etc. Where
for the proper discharge of the functions of the Board under this
Act the circumstances so require the Board may through any
operating agency cause to be prepared–

(a) with respect to a company a complete inventory of–

(i) all assets and liabilities of whatever nature;

(ii) all books of account registers maps plans
records documents of title or ownership of property and all
other documents of whatever nature relating thereto;

(b) a list of shareholders and a list of creditors showing
separately in the list of creditors the secured creditors and
the unsecured creditors;

(c) a valuation report in respect of the shares and assets
in order to arrive at the reserve price for the sale of a part or
whole of the industrial undertaking of the company or for
fixation of the lease rent or share exchange ratio;

(d) an estimate of reserve price lease rent or share
exchange ratio; and

(e) proforma accounts where no up – to-date audited accounts
are available.

22. Suspension of legal proceedings contracts etc.

22. Suspension of legal proceedings contracts etc. (1) Where in
respect of an industrial company an inquiry under section 16 is
pending or any scheme referred to under section 17 is under
preparation or consideration or a sanctioned scheme is under
implementation or where an appeal under section 25 relating to an
industrial company is pending then notwithstanding anything
contained in the Companies Act 1956 (1 of 1956) or any other law or
the memorandum and articles of association of the industrial company
or any other instrument having effect under the said Act or other law
no proceedings for the winding up of the industrial company or for
execution distress or the like against any of the properties of the
industrial company or for the appointment of a receiver in respect
thereof and no suit for the recovery of money or for the
enforcement of any security against the industrial company or of any
guarantee in respect of any loans or advance granted to the industrial
company shall lie or be proceeded with further except with the
consent of the Board or as the case may be the Appellate Authority.

(2) Where the management of the sick industrial company is taken
over or changed in pursuance of any scheme sanctioned under
section 18 notwithstanding anything contained in the Companies Act
1956 (1 of 1956) or any other law or in the memorandum and articles of
association of such company or any instrument having effect under the
said Act or other law–

(a) it shall not be lawful for the shareholders of such
company or any other person to nominate or appoint any person to
be a director of the company;

(b) no resolution passed at any meeting of the shareholders
of such company shall be given effect to unless approved by the
Board.

(3) Where an inquiry under section 16 is pending or any scheme
referred to in section 17 is under preparation or during the period
of consideration of any scheme under section 18 or where any such
such scheme is sanctioned thereunder for due implementation of the
scheme the Board may by order declare with respect to the sick
industrial company concerned that the operation of all or any

Subs. by Act 12 of 1994 s. 11.

Subs. by s. 12 ibid.

Ins. by s. 12 ibid.

of the contracts assurances of property agreements settlements
awards standing orders or other instruments in force to which such
sick industrial company is a party or which may be applicable to such
sick industrial company immediately before the date of such order
shall remain suspended or that all or any of the rights privileges
obligations and liabilities accruing or arising thereunder before the
said date shall remain suspended or shall be enforceable with such
adaptations and in such manner as may be specified by the Board:

Provided that such declaration shall not be made for a period
exceeding two years which may be extended by one year at a time so
however that the total period shall not exceed seven years in the
aggregate.

(4) Any declaration made under sub – section (3) with respect to a
sick industrial company shall have effect notwithstanding anything
contained in the Companies Act 1956 (1 of 1956) or any other law
the memorandum and articles of association of the company or any
instrument having effect under the said Act or other law or any
agreement or any decree or order of a court tribunal officer or
other authority or of any submission settlement or standing order and
accordingly–

(a) any remedy for the enforcement of any right privilege
obligation and liability suspended or modified by such
declaration and all proceedings relating thereto pending before
any court tribunal officer or other authority shall remain
stayed or be continued subject to such declaration; and

(b) on the declaration ceasing to have effect–

(i) any right privilege obligation or liability so
remaining suspended or modified shall become revived and
enforceable as if the declaration had never been made; and

(ii) any proceeding so remaining stayed shall be
proceeded with subject to the provisions of any law which
may then be in force from the stage which had been reached
when the proceedings became stayed.

(5) In computing the period of limitation for the enforcement of
any right privilege obligation or liability the period during which
it or the remedy for the enforcement thereof remains suspended under
this section shall be excluded.

22A. Direction not to dispose of assets.

22A. Direction not to dispose of assets. The Board may if it
is of opinion that any direction is necessary in the interest of the
interest of the sick industrial company or creditors or shareholders
or in the public interest by order in writing direct the sick
industrial company not to dispose of except with the consent of the
Board any of its assets–

(a) during the period of preparation or consideration of the
scheme under section 18; and

(b) during the period beginning with the recording of opinion
by the Board for winding up of the company under sub – section (1)
of section 20 and upto commencement of the proceedings relating
to the winding up before the concerned High Court

CHAP

PROCEEDINGS IN CASE OF POTENTIALLY SICK INDUSTRIAL
COMPANIESMISFEASANCE PROCEEDINGS APPEALS AND MISCELLANEOUS

CHAPTER IV

PROCEEDINGS IN CASE OF POTENTIALLY SICK INDUSTRIAL COMPANIES
MISFEASANCE PROCEEDINGS APPEALS AND MISCELLANEOUS

23. Loss of fifty per cent.

net worth by industrial companies.

23. Loss of fifty per cent. net worth by industrial companies.
(1) If the accumulated losses of an industrial company as at the end
of any financial year (hereinafter referred to as the relevant
financial year) have resulted in erosion of fifty per cent. or more
of its peak net worth during the immediately preceding four
financial years–

(a) the company shall within a period of sixty days from
the date (hereinafter referred to as the relevant date) of
finalisation of

Ins. by Act 12 of 1994 s. 13.

Subs. by s. 14 ibid.

the duly audited accounts of the company for the relevant
financial year–

(i) report the fact of such erosion to the Board; and

(ii) hold a general meeting of the shareholders of the
company for considering such erosion;

(b) the Board of directors shall at least twenty – one days
before the date on which the meeting under sub – clause (ii) of
clause (a) is held forward to every member of the company a
report as to such erosion and the causes for such erosion;

(c) the company may by ordinary resolution passed at the
meeting held under clause (a) remove a director (being a director
appointed by the members of the company) and fill the vacancy
created by such removal so far as may be in accordance with the
procedure provided in sub – sections (2) to (6) of section 284 of
the Companies Act 1956 (1 of 1956).

(2) A director removed under sub – section (1) shall not be
entitled to any compensation or damages for termination of his
appointment as director or of any appointment terminating with that as
director.

(3) If default is made in complying with the provisions of this
section every director or other officer of the company who is in
default shall be punishable with imprisonment which shall not be less
than six months but which may extend to two years and with fine.

23A

Proceedings on report etc. of loss of fifty per cent. net worth.

23A. Proceedings on report etc. of loss of fifty per cent.
net worth. (1) Without prejudice to the provisions of clause (a) of
sub- section (1) of section 23 the Central Government or the Reserve
Bank or a State Government or a public financial institution or a
State level institution or a scheduled bank may if it has sufficient
reasons to believe that the accumulated losses of any industrial
company have resulted in erosion of fifty per cent. or more of its
peak net worth during the immediately preceding four financial years
report the fact of such erosion to the Board.

(2) If the Board has upon information received or upon its own
knowledge reason to believe that the accumulated losses of any indu-
strial company have resulted in erosion of fifty per cent. or more of
its peak net worth during the immediately preceding four financial
years it may call for such information from that company as it may
deem fit.

(3) Where the Board is of the opinion that an industrial company
referred to in sub – section (1) is not likely to make its net worth
exceed its accumulated losses within a reasonable time while meeting
all its financial obligations and that the company as a result thereof
is not likely to become viable in future it may require by order an
operating agency to inquire into and make a report with respect to
such matters as may by specified in the order.

(4) After consideration of the report of the operating agency the
Board may publish or cause to be published a notice in such daily
newspapers as the Board may consider neccessary for suggestions and
objections if any within such period as the Board may specify as to
why the company should not be wound up.

(5) Where the Board after consideration of the relevant facts
and circumstances and after giving an opportunity of being heard to
all concerned parties is of the opinion that the industrial company
is not likely to make its net worth exceed the accumulated losses
within a reasonable time while meeting all its financial obligations
and that the company as a result thereof is not likely to become
viable in future and that it is just and equitable that the company
should be wound up the Board may record and forward its opinion to
the concerned High Court in relation to the company as if it were a
sick industrial company and the provisions of sub – sections (2) (3)
and (4) of section 20 shall apply accordingly.

23B

Power of Board to call for periodic information.

23B. Power of Board to call for periodic information. On receipt
of a report under sub – clause (i) of clause (a) of sub – section (1) of
section 23 or under sub – section (1) of section 23A or upon information
or its own knowledge under sub – section (2) of section 23A the Board
may call for any periodic information from the company as to the steps
taken by the company to make its net worth exceed the accumulated
losses and the company shall furnish such information

24. Misfeasance proceedings.

24. Misfeasance proceedings. (1) If in the course of scrutiny or
implementation of any scheme or proposal it appears to the Board that
any person who has taken part in the promotion formation or
management of the sick industrial company or its undertaking
including any past or present director manager or officer or employee
of the sick industrial company–

(a) has misapplied or retained or become liable or
accountable for any money or property of the sick industrial
company; or

(b) has been guilty of any misfeasance malfeasance or non-
feasance or breach of trust in relation to the sick industrial
company

the Board may by order direct him to repay or restore the money
or property or any part thereof with or without interest as it
thinks just or to contribute such sum to the assets of the sick
industrial company or the other person entitled thereto by way of
compensation in respect of the misapplication retainer misfeasance or
breach of trust as the Board thinks just and also report the matter
to the Central Government for any other action which that Government
may deem fit.

(2) If the Board is satisfied on the basis of the information and
evidence in its possession with respect to any person who is or was a
director or an officer or other employee of the sick industrial
company that such person by himself or along with other had diverted
the funds or other property of such company for any purpose other than
a bona fide purpose of the company or had managed the affairs of the
company in a manner highly detrimental to the interests of the
company the Board shall by order direct the public financial
institutions scheduled banks and State level institutions not to
provide during a

Ins. by Act 12 of 1994 s. 15.

period of ten years from the date of the order any financial
assistance to such person or any firm of which such person is a
partner or any company or other body corporate of which such person is
a director (by whatever name called).

(3) No order shall be made by the Board under this section
against any person unless such person has been given an opportunity
for making his submissions.

(4) This section shall apply notwithstanding that the matter is
one for which the person may be criminally liable.

25. Appeal.

25. Appeal. (1) Any person aggrieved by an order of the Board
made under this Act may within forty – five days from the date on which
a copy of the order is issued to him prefer an appeal to the
Appellate Authority:

Provided that the Appellate Authority may entertain any appeal
after the said period of forty – five days but not after sixty days from
the date aforesaid if it is satisfied that the appellant was prevented
by sufficient cause from filing the appeal in time.

(2) On receipt of an appeal under sub – section (1) the Appellate
Authority may after giving an opportunity to the appellant to be
heard if he so desires and after making such further inquiry as it
deems fit confirm modify or set aside the order appealed against
or remand the matter to the Board for fresh consideration

26. Bar of jurisdiction.

26. Bar of jurisdiction. No order passed or proposal made under
this Act shall be appealable except as provided therein and no civil
court shall have jurisdiction in respect of any matter which the
Appellate Authority or the Board is empowered by or under this Act
to determine and no injunction shall be granted by any court or other
authority in respect of any action taken or to be taken in pursuance
of any power conferred by or under this Act.

27. Delegation of powers.

27. Delegation of powers. The Board may by general or special
order delegate subject to such conditions and limitations if any
as may be specified in the order to any Member or Secretary or other
officer or employee of the Board or other person authorised by the
Board to manage any industrial company or industrial undertaking or
any operating agency such powers and duties except the powers and
duties under sub – section (2) and (4) of section 16 section 17 sub-
sections (3) and (4) of section 19 sub – section (1) and (4) of section
20 sub – section (3) of section 22 and section 24 under this Act as it
may deem necessary.

28. Returns and information.

28. Returns and information. (1) The Board shall furnish from
time to time to the Central Government such returns as the Central
Government may require.

(2) The Board may for the purpose of efficient discharge of its
functions under this Act collect from or furnish to–

(a) the Central Government

(b) the Reserve Bank

(c) the scheduled bank or any other bank

(d) the public financial institution

(e) the State – level institution or

(f) the sick industrial company and in case of amalgamation
the other company

Added by Act 12 of 1994 s. 16.

Omitted by s. 17 ibid.

Ins. by s. 17 ibid.

such information as it may consider useful for the purpose in such
manner and within such time as it may think fit.

29. Power to seek the assistance of Chief Metropolitan Magistrate andDistrict
Magistrate.

29. Power to seek the assistance of Chief Metropolitan Magistrate
and District Magistrate. (1) The Board or any operating agency on
being directed by the Board may in order to take into custody or
under its control all property effects and actionable claims to which
a sick industrial company is or appears to be entitled request in
writing the Chief Metropolitan Magistrate or the District Magistrate
within whose jurisdiction any property books of account or any other
documents of such sick industrial company be situate or be found to
take possession thereof and the Chief Metropolitan Magistrate or the
District Magistrate as the case may be shall on such request being
made to him–

(i) take possession of such property books of account or
other documents; and

(ii) cause the same to be entrusted to the Board or the
operating agency.

(2) For the purpose of securing compliance with the provisions of
sub – section (1) the Chief Metropolitan Magistrate or the District
Magistrate may take or cause to be taken such steps and use or cause
to be used such force as may in his opinion be necessary.

(3) No act of the Chief Metropolitan Magistrate or the District
Magistrate done in pursuance of this section shall be called in
question in any court or before any authority on any ground
whatsoever.

30. Protection of action taken in good faith.

30. Protection of action taken in good faith. No suit or other
legal proceeding shall lie against the Board or the Appellate
Authority or the Chairman or any other Member officer or other
employee of the Board or the Appellate Authority or operating agency
or any other person authorised by the Board or the Appellate Authority
to discharge any function under this Act for any loss or damage caused
or likely to be caused by any action which is in good faith done or
intended to be done in pursuance of this Act.

31. Saving of pending proceedings.

31. Saving of pending proceedings. Where a receiver or an
official liquidator has been appointed in any proceeding pending
immediately before the commencement of this Act in any High Court for
winding up of an industrial company such proceeding shall not abate
but continue in that High Court and no proceeding in respect of
such industrial company shall lie or be proceeded with further before
the Board

32. Effect of the Act on other laws.

32. Effect of the Act on other laws. (1) The provisions of this
Act and of any rules or schemes made thereunder shall have effect
notwithstanding anything inconsistent therewith contained in any other
law except the provisions of the Foreign Exchange Regulation Act
(46 of 1973) and the Urban Land (Ceiling and Regulation) Act
(33 of 1976) for the time being in force or in the Memorandum or
Articles of Association of an industrial company or in any other
instrument having effect by virtue of any law other than this Act.

(2) Where there has been under any scheme under this Act an
amalgamation of a sick industrial company with another company the
provisions of section 72A of the Income – tax Act 1961 (43 of 1961)
shall subject to the modifications that the power of the Central
Government under that section may be exercised by the Board without
any recommendation by the specified authority referred to in that
section apply in relation to such amalgamation as they apply in
relation to the amalgamation of a company owning an industrial
undertaking with another company.

Added by Act 12 of 1994 s. 18.

33. Penalty for certain offences.

33. Penalty for certain offences. (1) Whoever violates the
provisions of this Act or any scheme or any order of the Board or
the Appellate Authority and whoever makes a false statement or gives
false evidence to the Board or the Appellate Authority shall be
punishable with simple imprisonment for a term which may extend to
three years and shall also be liable to fine.

(2) No court shall take cognizance of any offence under sub-
section (1) except on a complaint in writing of the Secretary or any
such other officer of the Board or the Appellate Authority or any such
officer of an operating agency as may be authorised in this behalf by
the Board or the Appellate Authority

34. Offences by companies.

34. Offences by companies. (1) Where any offence punishable
under this Act has been committed by a company every person who at
the time the offence was committed was in charge of and was
responsible to the company for the conduct of the business of the
company as well as the company shall be deemed to be guilty of the
offence and shall be liable to be proceeded against and punished
accordingly:

Provided that nothing contained in this sub – section shall render
any such person liable to any punishment if he proves that the
offence was committed without his knowledge or that he had exercised
all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub – section (1) where
any offence punishable under this Act has been committed by a company
and it is proved that the offence has been committed with the consent
or connivance of or is attributable to any neglect on the part of
any director manager secretary or other officer of the company such
director manager secretary or other officer shall also be deemed to
be guilty of that offence and shall be liable to be proceeded against
and punished accordingly.

Explanation: — For the purposes of this section–

(a) company means any body corporate and includes a firm
or other association of individuals; and

(b) director in relation to a firm means a partner in
the firm.

35. Power to remove difficulties.

35. Power to remove difficulties. If any difficulty arises in
giving effect to the provisions of this Act or the rules schemes or
orders made thereunder the Central Government may by notification
remove the difficulty:

Provided that no such notification shall be made by the Central
Government after the expiry of a period of three years from the date
on which this Act receives the assent of the President.

36. Power to make rules.

36. Power to make rules. (1) The Central Government may by
notification make rules for carrying out the provisions of this Act.

Omitted by Act 12 of 1994 s. 19.

Subs. by s. 20 ibid.

(2) In particular and without prejudice to the generality of the
foregoing power such rules may provide for all or any of the
following matters namely:–

(a) the salaries and allowances payable to and other terms
and conditions of service of the Chairman and other Members under
sub – section (7) of section 6;

(b) the powers which may be exercised and the duties which
may be performed by the Secretary to the Board or the Appellate
Authority under sub – section (1) of section 8;

(c) the restrictions and conditions subject to which
officers and employees may be appointed to the Board or the
Appellate Authority under sub – section (2) of section 8;

(d) the salaries and allowances and other conditions of
service of the Secretary and other officers and employees of the
Board or the Appellate Authority under sub – section (3) of section
8;

(e) the additional matters referred to in sub – section (3) of
section 13;

(f) any other matter which is required to be or may be
prescribed.

(3) Every rule made under this Act shall be laid as soon as may
be after it is made before each House of Parliament while it is in
session for a total period of thirty days which may be comprised in
one session or in two or more successive sessions and if before the
expiry of the session immediately following the session or the
successive sessions aforesaid both Houses agree in making any
modification in the rule or both Houses agree that the rule should not
be made the rule shall thereafter have effect only in such modified
form or be of no effect as the case may be; so however that any
such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule.

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