The Competition Bill, 2002 and the Companies (Second) Amendment Bill, 2002, passed during the winter session of Parliament, have received presidential assent and become Acts.
The Companies (Second) Amendment Act, 2003, which seeks to amend the Companies Act, 1956, provides for a new, modern, efficient and time bound Insolvency Law to provide both rehabilitation and winding up of sick companies within a timeframe of a maximum of two years as against the existing system of between 18 to 26 years, says an official release in New Delhi on Friday.
It envisages setting up of a National Company Law Tribunal with several benches to be notified by the government all over the country and appeal from its judgement before the National Company Law Appellate Tribunal.
It also envisages taking over the jurisdiction of high courts in the matters of liquidation of sick companies, abrogation of Company Law Board, repealing of the Sick Industries (Special Provisions) Act, 1985 and dismantling of BIFR created there under.
It also envisages creation of a corpus to be known as Rehabilitation Fund for taking care of the workers of sick companies and their investors as per the global standards in keeping with the norm of globalisation of the Indian economy under the World Trade Organisation regime.
The government will implement this Act from a date to be notified by the Department of Company Affairs in stages, says the release.
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