Sick Industrial Companies (Special Provisions) Act, 1985
23A. Proceedings on report, etc. of loss of fifty per cent net worth
(1) Without prejudice to the provisions of clause (a) of sub-section (1) of section 23, the Central Government or the Reserve Bank or a State Government or a public financial institution or a state level institution or a scheduled bank may, if it has sufficient reasons to believe that the accumulated losses of any industrial company have resulted in erosion of fifty per cent, or more of its peak net worth during the immediately preceding four financial years, report the fact of such erosion to the Board.
(2) If the Board has, upon information received or upon its own knowledge, reason to believe that the accumulated losses of any industrial company have resulted in erosion of fifty per cent or more of its peak net worth during the immediately preceding four financial years, it may call for such information from the company as it may deem fit.
(3) Where the Board is of the opinion that an industrial company referred to in sub-section (1) is not likely to make its net worth exceed its accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof is not likely to become viable in future, it may require by order an operating agency to inquire into and make a report with respect to such matters as may be specified in the order.
(4) After consideration of the report of the operating agency the Board may publish or cause to be published a notice in such daily newspapers as the Board may consider necessary, for suggestions and objections, if any, within such period as the Board may specify, as to why the company should not be wound up.
(5) Where the Board, after consideration of the relevant facts and circumstances and after giving an opportunity of being heard to all concerned parties, is of the opinion that the industrial company is not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof, is not likely to become viable in future and that it is just and equitable that the company should be wound up, the Board may record and forward its opinion to the concerned High Court in rotation to the company as if it were a sick industrial company and the provisions of sub-sections (2), (3) and. (4) of section 20 shall apply accordingly.