• How I get my money after a plant in BIFR

I file a winding up case and get order from High Court  in my favour , but the Company not make any payment  after High Court Order and later company applied for BIFR . I advertised in New Paper's as per order . Now can you suggest me , How I get my outstanding . I am a unsecured Creditors . If the company registered in BIFR , what will my future action . Give me some Legal opinion
Asked 2 years ago in Business Law from Kolkata, West Bengal
1) your chances of recovery of money  are bleak .

2) if company is in BIFR it may take around 7 years for the company to come out of BIFR 

3) all proceedings for recovery would be stayed till the company is in BIFR 

4) rehabilitation scheme would be sanctioned by Board to revive the company after company furnishes list of its assets valued by govt valuer, list of secured , unsecured creditors, worker dues , govt dues . 

Ajay Sethi
Advocate, Mumbai
45738 Answers
2692 Consultations

5.0 on 5.0

Without seeing the order it is very difficult to advise. Feel free to contact if you need my assistance on this issue.
Devajyoti Barman
Advocate, Kolkata
12887 Answers
166 Consultations

5.0 on 5.0

The Board for Industrial and Financial Reconstruction (BIFR) is an agency of the government of India, part of the Department of Financial Services of the Ministry of Finance. Its objective is to determine sickness of industrial companies and to assist in reviving those that may be viable and shutting down the others.The BIFR in practice often became a way of prolonging the life of inviable companies for years at taxpayer expense.
"One look at the track record of BIFR, and it doesn’t take a whiz [sic] to conclude that it is nothing but a graveyard of companies. A tiny fraction comes out healthy — only if the promoter is interested in putting it back up on its feet".
Defaulting companies are making a beeline for getting registered with the Board for Industrial and Financial Restructuring (BIFR) to get protection from being hauled up by aggrieved creditors before new norm for dealing with corporate sickness takes over under the protective umbrella of BIFR thereby scuttling efforts of creditors from getting remedial measures from the court.
Under SICA section 22, a company gets protection from all creditors while a revival process is on.
"SICA provides for an automatic stay and suspension of all kind of recovery and distressed proceedings (including debt recovery), once the reference filed by the company is registered in the BIFR. This could act as a huge impediment in debt recovery as the aforesaid provision could lead the BIFR to become a safe haven for defaulting companies.  The companies could easily file reference with the BIFR, sometimes by manipulating their accounts to reflect net worth erosion, resulting in attracting this immunity against the recovery action by the creditors." 

In the above given situation, one has to take a route of writ before high  court based n the evidences and merits in his side. 
T Kalaiselvan
Advocate, Vellore
35910 Answers
390 Consultations

5.0 on 5.0

1. The secured creditors have to be preferred over unsecured creditors. 

2. You should file for execution of the decree. The company is bound to comply with the judgment. Registration in BIFR does not absolve the company from its liability to honour the decree of the court.
Ashish Davessar
Advocate, Jaipur
22977 Answers
634 Consultations

5.0 on 5.0

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