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BIFR, AAIFR Not Competent To Issue Directions To Non-Sick Industrial Company

The Supreme Court in President J.K. Synthetics Mazdoor Union, Kota vs. Arfat Petrochemicals Pvt. Ltd., has reiterated that the Board for Industrial and Financial Reconstruction (BIFR) has no competence to issue directions under Section 22A of the Sick Industrial Companies (Special Provisions) Act, 1985, to a company that is not a sick industrial company.

Certain directions like not to dispose of the assets were issued by the BIFR against M/s Arafat Petrochemicals Pvt. Ltd. (APPL), which was affirmed by Appellate Authority for Industrial and Financial (AAIFR). The said order was set aside by the Rajasthan High Court holding that the BIFR and the AAIFR do not have jurisdiction to issue directions to a company, which is not a sick industrial company under Section 22 A of the Act.

Article referred: http://www.livelaw.in/bifr-aaifr-not-competent-issue-directions-non-sick-industrial-company-sc/

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