January 7, 2017 4:47:47 am
Mamata Banerjee’s demand for a ‘national government’ was triggered by the dissolving of the Bureau of Industrial Finance and Reconstruction (BIFR) and its appellate body, the Appellate Authority for Industrial Finance and Reconstruction (AAIFR) by the Centre. The two — BIFR and AAIFR — were entrusted with the duty of reviving sick industries. There are approximately 351 cases in Bengal, many of which are in the ailing jute mill industry.
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Revival schemes for 69 cases in the private sector have been approved. As of July 2016, a total of 150 cases were on cause list of the BIFR and of these 351 cases, the Delhi office was monitoring 265 cases, said officials adding that at present 117 live cases were being pursued.
The letter received by Mamata on Thursday left her fuming.
“I have never seen such a vindictive government at the Centre. They are breaking age-old institutions like the Planning Commission and others. They are breaking the backbone of the government. Yesterday, I received a letter in which it has been indicated that it wants to close down BIFR companies. In Bengal we are trying to revive BIFR companies while the Centre wants to close them down,” she told media persons.
The letter sent by the secretary of the Ministry of Corporate Affairs says that the BIFR and AAIF “which were entrusted with the revival and rehabilitation of sick industrial companies under the Sick Industrial Companies (Special Provisions) Act 1985 has been dissolved”.
It adds, “With effect from December 1, 2016 (IBC) has commenced” and that “various changes have been brought in the regime for corporate insolvency resolution and liquidation/winding up of companies”.
It adds that “all pending cases before BIFR and AAIFR stand abated. These companies can file fresh cases for insolvency resolution under the Code before National Company Law Tribunal (NCLT)”.
The code in question is the Insolvency and Bankruptcy Code (IBC), that provides for a NCLT for corporate insolvency resolution and Debt Recovery Tribunals (DRT) for individual insolvencies, was established by the Centre on June 1, 2016.
A senior official of the state finance ministry said, “The new NCLT will have the case load of the Company Law Board, the high court as well as BIFR. That is a huge number of pending cases and the state government fears that this effort to bring all cases under a conventional tribunal would see the tribunal collapsing. We have instead been trying to review as many cases as possible, while ensuring that livelihood wasn’t impacted.”
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