Report On Sica Repeal Bill Likely To Be Delayed

The standing committee on finance is unlikely to finalise its report on the Bill to repeal the Sick Industrial Companies Act (Sica), 1985, before the end of the current session of Parliament.

The committee, which heard the comments from secretary to the department of company affairs (DCA), V K Dhall, and other officials yesterday, is yet to decide on whether it would recommend a repeal of the existing provision of the Companies Act as has been envisaged in the Bill, or ask for only an amendment.

Dhall explained to the committee the provisions in the Bill would ensure the promoters of sick companies also come up with viable rehabilitation packages, but some of the Opposition members in the committee were not satisfied, especially on the issue of winding up of the Board for Industrial and Financial Reconstruction in favour of setting up a national company law tribunal.

 

However, this was the last round of hearings before the committee finalised the draft report.

The Cabinet has already cleared the proposal to establish the national company law tribunal subject to the passage of the Bill through Parliament.

The Bill was introduced in Parliament last year and is commonly referred to as the Insolvency Bill.

It was examined by the standing committee on home affairs, which suggested only minor changes in order to speed up the process of winding up of sick companies.

Among other things, the committee had suggested that the timeframe for reference to the national company law tribunal, which would be set up once the Bill was cleared by Parliament, should be reduced from the proposed 180 days, extendible by another 90 days, because companies might extend their financial year.

In its response, the government accepted the committee's opinion and said the clause should be amended to state that the erosion of net worth should be reported within 180 days after it was noticed, or within 60 days of the final adoption of accounts, whichever was earlier.