The Board of Industrial and Financial Reconstruction (BIFR) held its first hearing yesterday after a gap of nearly two months. The working of BIFR had come to a standstill with no hearings being held since October 7.
All the benches had been dissolved due to the retirement of all the members barring S L Kapur. The government had appointed two new members last week consequently a bench has been constituted which held its first hearing on Monday last.
As a result of the delay in appointing members to the board the rate of disposal of cases is expected to decline by more than 50 per cent this year compared as to last year.
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With the revamped Sick Industrial Companies Act (SICA) having lapsed and government being undecided about introducing the Bill in the winter session of Parliament, the BIFR seems to have lost direction.
Meanwhile, the number of cases registered with the BIFR continues to swell. According to sources, 659 cases are pending with the BIFR. So far, more than 300 cases have been registered with the board this year as against a mere 97 cases in 1996. In October, 34 cases were registered.
During January-October this year, the board took up 123 cases against 220 cases in calendar year 1997. The board is likely to take up another 5-10 cases this year, which is far cry from 276 cases in 1996.
There is another hitch holding up the functioning of the board. SICA provides that the Board shall consist of a chairman and a minimum of two and maximum of 14 members. The present sanctioned strength is a chairman and eight members. Decisions are taken by benches, each of which consists of not less than two members. The number of benches had declined from four in April 1996 to two in June 1997. The lone bench functioning for some time held its last meeting on October 7, and since then there has been no work done. at the BIFR.
According to sources, S L Kapur is likely to be appointed chairman of the board soon. However, Kapur is retiring on December 31, 1998. In that case the board will once again be without an experienced chairman. However, sources point out that for sake of continuity the government may give an extension to Kapur.
Even then all the other members being new to the organisation will take time to settle down. So, not much is expected to be done at the BIFR in the next few months.