Positive net worth ends sick company jurisdiction under SICA, and secured creditor challenge fails absent real prejudice.

An industrial company ceases to remain sick under SICA when its audited balance sheet shows positive net worth and the accumulated losses have been fully wiped out, and BIFR and AAIFR's jurisdiction ends once that statutory condition is met. The Delhi High Court also noted that a secured creditor cannot sustain a challenge to revival measures without showing real prejudice, particularly where the security interest remains protected by mortgage and recovery rights are not impaired. Applying these principles, the challenge to the AAIFR order failed because the company had validly exited the sick company regime and no actionable injury was established.

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Issues: Whether, on the company's net worth having turned positive, the BIFR and AAIFR ceased to have jurisdiction under the Sick Industrial Companies (Special Provisions) Act, 1985, and whether the petitioner could maintain a challenge to the order permitting revival measures.

Analysis: The company had been declared sick under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985, but the audited balance sheet showed that its net worth had become positive and the accumulated losses had been wiped out. The decision relied on the principle that once an industrial company ceases to be sick, the statutory purpose of BIFR supervision ends and the jurisdiction of BIFR and AAIFR cannot continue. The Court further found that the petitioner, a secured creditor, had not shown any real prejudice from the rehabilitation measures, especially when its security interest remained protected by mortgage and the company's revival did not impair its recovery rights.

Conclusion: The company had ceased to be a sick industrial company, the BIFR and AAIFR no longer had jurisdiction, and the petitioner had no sustainable ground to assail the impugned order.

Final Conclusion: The challenge to the AAIFR order failed because the company had validly come out of the sick company regime and the petitioner did not establish any actionable injury warranting interference.

Ratio Decidendi: When an industrial company's audited balance sheet shows positive net worth and the accumulated losses are fully wiped out, it ceases to be a sick industrial company and the jurisdiction of BIFR and AAIFR under SICA comes to an end.

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