The Central Government enacted a legislation, namely, The Sick Industrial Companies (Special Provisions) Repeal Act, 2003 which was to repeal the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (Act no. 1 of 1986). The Central Government beside presenting the Bill in respect of the present Act, also sought to provide another important change by amending the provisions of Companies Act, 1956 and incorporate in it the corresponding provision which the original Act of 1985 was providing. The Companies Act, 1956 was to amend by the Companies (Second Amendment) Act, 2002.
The provisions of Sick Industrial Companies (Special Provisions) Act, 1985 after having assented by the President of India on 8th January, 1986, the same was provided to objective to check sickness and expedite the process of revival of efficient and viable sick industrial companies and closure of those unviable. The said Act of 1985 was further provided with the object to constitute the Board for Industrial and Financial Reconstruction and also Appellate Authority thereof, which was vested with the power to recommend and supervise the implementation of the rehabilitation plans of the sick industries. Also said Board was provided with the power to decided reliefs to be granted and measures to be ascertained to such sick industrial companies.
The Repealing Act makes preliminary provisions relating to short titling and enforcement of the Act under section 1 of the Act. Similarly, certain important definitions of terms which are found used in the provisions thereof, have been defined under its next provision.
The most important provisions i.e. section 3 of the Act deals with the repealing provision, where the original Act of 1985 is sought to be repealed. Not only this, but the present provision also requires the dissolution of the Board and Appellate Authority which were constituted in pursuance with the provisions of the Original Act of 1985.
Another important provision is section 4 of the Act, which speaks of consequences of such dissolution of Board and Appellate Authority. It is provided that, every persons who were appointed by the Central Government, Board or Appellate Authority, including the Chairman and Members of the Board and Appellate Authority and other officials, were required to vacate their offices. However, such persons will not be entitled to any claim of compensation for such vacation of offices. But, the officials or employees who were appointed on deputation basis immediately before such dissolution, should be taken to parent cadre, Ministry or Department. The employees which are appointed on regular basis should be taken as of the Central Government with the same rights, etc. Similarly, on such dissolution, the proceedings before such Board or Appellate Authority were required to be abated and it was directed that the same to be referred to the National Company Law Tribunal- NCLT under part-VIA of the Companies Act, 1956, within the period of 180 days from the date on which this Act brought into force. Also the appeal from such orders of NCLT will now be preferred before National Company Law Appellate Tribunal- NCLAT. Even the Scheme which was sanctioned under the provisions of original Act of 1985, now required to be treated as has been sanctioned under Section 424D of the Companies Act, 1956. Similarly, all moneys stand balance with the Board or Appellate Authority and also properties were also required to be vested and transferred with/to the Central Government. Also every liabilities or responsibilities of the Board or Appellate Authority were also required to be held as that of Central Government under this Repealing Act.
Section 5 of the Act makes saving provisions. Under this provision, it is provided that, the repealing of the original Act of 1985 should not affect the other enactments to which the provisions of Original Act were having applicability. Similarly, anything done and any rights, liabilities, etc. got in pursuance with the provisions of Original Act were sought to be protected. The orders of the Board to sanction the Scheme under that Act, and all other things given under section 5 of this Act were also protect against such repeal by this Repealing Act.
Finally, the Repealing Act makes provision to provide rule making power to the Central Government. Such rules are required to be made by that Government for the purpose of carrying out the purpose of this repealing enactment and also for other matters provided under section 6, under several clauses. All rules made under this Repealing Act should be tabled before House of parliament for its rectification within such period as prescribed under this provision.
Recently, in the year, 2014, the 20th Law Commission’s interim report (being report no. 248) on the project of “Identification of Obsolete Laws” took this Repealing Act for its study with the view to assess the suitability of repeal, under its Appendix -V.