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What is the full form of BIFR?
What is the Full form of BIFR?
The Board of Industrial and Financial Reconstruction (BIFR) was a quasi-judicial body in India established in 1987 under the Sick Industrial Companies (Special Provisions) Act of 1985. The BIFR was dependable for restoring debilitated mechanical companies, characterized as companies with amassed misfortunes more prominent than their net worth.
The BIFR had the control to require over administration of such companies, prescribe liquidation or amalgamation, and give financial assistance for their revival. The objective of the BIFR was to resuscitate and restore debilitated companies and project work, and maximize the esteem of resources. However, in 2016, the government of India passed the Indebtedness and Liquidation Code, which supplanted the BIFR with the National Company Law Tribunal (NCLT) and the National Company Law Re-appraising Tribunal (NCLAT) for bankruptcy and bankruptcy procedures.
Objectives of BIFR
The main objectives of the Board of Industrial and Financial Reconstruction (BIFR) were −
To identify and announce sick industrial companies and take over their administration.
To provide financial and other help to restore and restore sick industrial companies.
To recommend restoring or liquidating wiped-out companies based on their financial reasonability.
To protect employment and maximize the value of resources of sick companies.
To screen the advance of restoration and recovery plans and take remedial measures, if it is vital.
The general objective of the BIFR was to promote industrial development and advancement in India by anticipating the closure of viable sick companies and restoring them, thereby ensuring the interface of specialists, lenders, and other partners.
History of BIFR
The Board of Industrial and Financial Reconstruction (BIFR) was set up in India in 1987 under the Sick Industrial Companies (Special Arrangements) Act of 1985. The Indian government passed the Act to address the issue of industrial sickness in the nation, caused by different components such as mismanagement, inefficient use of assets, obsolete technology, and adverse advertisement conditions.
The BIFR was created as a quasi-judicial body to deal with the restoration and recovery of sick industrial companies. The BIFR had the power to take over the administration of sick companies, suggest liquidation or amalgamation, and give financial help for their restoration. The objective of the BIFR was to resuscitate and restore sick companies, protect businesses, and maximize the esteem of resources.
Over a long time, the BIFR confronted different challenges in carrying out its command, including delays in decision-making, the need for financial assets, and legal challenges. In 2016, the Indian government passed the Insolvency and Bankruptcy Code, which supplanted the BIFR with the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) for bankruptcy and insolvency procedures. This checked the conclusion of the BIFR's part in the restoration and restoration of sick industrial companies in India.
Conclusion
The Board of Industrial and Financial Reconstruction (BIFR) played a significant part in the Indian industrial landscape since its establishment in 1987. The BIFR was made to address the issue of industrial sickness in India and to restore and restore debilitated mechanical companies. It had control to require over the administration of debilitated companies, recommend liquidation or amalgamation, and give financial help for their restoration.
However, over a long time, the BIFR confronted different challenges in carrying out its order, including delays in decision-making, the need for financial resources, and legal challenges. With the entry of the Bankruptcy and Insolvency Code in 2016, the BIFR was replaced by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) for bankruptcy and liquidation procedures.
Despite its challenges and eventual replacement, the BIFR played a critical part in improving the Indian mechanical segment by endeavouring to resuscitate and restore sick companies and protect employment.
FAQs
Q1. What were the powers of the BIFR?
Ans. The BIFR had the power to take over the management of sick companies, recommend liquidation or amalgamation, and provide financial assistance for their revival.
Q2. Why was the BIFR replaced?
Ans. The BIFR was replaced with the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) for bankruptcy and liquidation procedures took after the section of the Bankruptcy and Insolvency Code in 2016.
Q3. Did the BIFR have any challenges?
Ans. Yes, the BIFR faced various challenges in carrying out its mandate, including delays in decision-making, lack of financial resources, and legal challenges.
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