MCA RELXES THE NORMS OF TRANSIT FROM SICA TO INSOLVENCY CODE

The Ministry of Finance had, vide its notification S.O.3568(E) and S.O.3569(E) brought into force the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 w.e.f. 01.12.2016. Under the Eighth Schedule of the Insolvency and Bankruptcy Code, 2016, the Section 4(b) of the Sick Industrial Companies (Special Provisions) Repeal Act was amended whereby any appeal preferred to the Appellate Authority or any reference made or inquiry pending to or before the Board or any proceeding of whatever nature pending before the Appellate Authority or the Board under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) shall stand abated. Further, it was provided that a company in respect of which such appeal or reference or inquiry stands abated under this clause may make a reference to the National Company Law Tribunal under the Code within one hundred and eighty days from the date of commencement of the Code.
Considering the difficulties arisen regarding review or monitoring of the schemes sanctioned under sub-section (4) or any scheme under implementation under sub-section (12) of section 18 of the SICA in view of the repeal of the SICA, substitution of clause (b) of section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 and omission of sections 253 to 269 of the Companies Act, 2013, the Ministry of Commercial Affairs has presently made certain modifications in this regards vide its Order S.O. 1683(E) dated 24.05.2017.
Under the Order two new provisos have been inserted  in the Insolvency and Bankruptcy Code, 2016, in the Eighth Schedule, relating to amendment to the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, in section 4, in clause (b), after the second proviso. It provides that any scheme sanctioned under sub-section (4) or any scheme under implementation under sub-section (12) of section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 shall be deemed to be an approved resolution plan under sub-section (1) of section 31 of the Insolvency and Bankruptcy Code, 2016 and the same shall be dealt with, in accordance with the provisions of Part II of the said Code. Further the statutory period within which an appeal was allowed under the Sick Industrial Companies (Special Provisions) Act, 1985 against an order of the Board had not expired as on the date of notification of this Act, an appeal against any such deemed approved resolution plan may be preferred by any person before National Company Law Appellate Tribunal within ninety days from the date of publication of this order.