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BIFR alone to decide if unit has revived

The Board for Industrial and Financial Reconstruction (BIFR) does not lose control over a sick company even if it has revived on its own and its net worth has become positive. The civil court cannot claim jurisdiction on the ground that the company which was once sick has turned the corner, the Supreme Court ruled last week in the case, Ghanshyam Sarda vs M/s Shiv Shankar Trading Co. In this case, some parties moved the civil court which was resisted by others. Thus the dispute arose over the power of the civil court and BIFR. The court stated that the law gave "complete supervisory control to the BIFR over the affairs of a sick industrial company from the stage of registration of reference and questions concerning status of sickness of such company are in the exclusive domain of the BIFR." The judgment asserted that the aspects of revival of such company being completely within its exclusive domain, it is the BIFR alone, which can determine the issue whether such company now stands revived or not. "The jurisdiction of the civil court in respect of these matters stands completely excluded. The BIFR alone is empowered to determine whether the net worth has become positive as a result of which it would cease to have such jurisdiction," the court clarified.

 Article referred: http://www.business-standard.com/article/opinion/bifr-alone-to-decide-if-unit-has-revived-114111600838_1.html

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