The Sick Industrial Companies (Special Provisions) Act, 1985 received the assent of the President of India on 8th January, 1986. This act was enacted with an objective to check sickness and expedite the process of revival of efficient and viable units and closure of unviable units. By this process, investments in viable industries would become productive and locked up investments in unviable industries would get released. This objective was clearly spelt out in the provision of the Act which constituted the Board for Industrial and Financial Reconstruction (BIFR). BIFR has been empowered to recommend and supervise the implementation of the rehabilitation plans of the sick industries.
BIFR is also authorized to recommend reliefs that can be granted to the sick companies by banks, financial institutions and others, tax reliefs and the short circuiting of the various procedures contained in SEBI guidelines, Companies Act, MRTP ACT, and so on. The government has formulated one single code besides the constitution of BIFR, to implement rehabilitation schemes which are accepted by everyone including the workers who are always given favorable treatment by the BIFR.
A Bill named Sick Industrial Companies (Special Provisions) Repeal Act, 2003 was introduced by the central government seeking to repeal the Sick Industrial Companiesí Special Provisions Act. At the same time, the government deemed it fit to incorporate the corresponding provisions in the Companies Act itself through the Companies (Second Amendment) Act, 2002. However the SICA Repeal Bill lapsed without being passed by the Parliament and as a result the corresponding provisions introduced in the Companies Act has not yet come into effect.