SICA rehabilitation scheme recognised under the IBC, allowing insolvency proceedings to continue from the earlier stage.

A rehabilitation scheme sanctioned and under implementation under SICA may be carried forward under the Insolvency and Bankruptcy Code, 2016 and treated as an approved resolution plan where the statutory transition so permits. The order relies on the Removal of Difficulties Order, 2017 and the notified position that a scheme sanctioned under section 18(4) or under implementation under section 18(12) of SICA is deemed an approved resolution plan under section 31(1) of the Code. It also states that steps already taken under BIFR and AAIFR need not be discarded, and that a section 10 petition may proceed from the stage already reached under the earlier rehabilitation process. The petition was admitted and CIRP commenced.

---

---

Issues: (i) Whether a rehabilitation scheme sanctioned and under implementation under the Sick Industrial Companies (Special Provisions) Act, 1985 could be recognised for purposes of the Insolvency and Bankruptcy Code, 2016 and treated as an approved resolution plan. (ii) Whether the petition under section 10 of the Insolvency and Bankruptcy Code, 2016 was maintainable and the corporate insolvency resolution process could proceed from the stage reached under the earlier SICA proceedings.

Issue (i): Whether a rehabilitation scheme sanctioned and under implementation under the Sick Industrial Companies (Special Provisions) Act, 1985 could be recognised for purposes of the Insolvency and Bankruptcy Code, 2016 and treated as an approved resolution plan.

Analysis: The order notes the legislative continuity between the two regimes and holds that rehabilitation measures already undertaken under SICA cannot be ignored after repeal. It relies on the Removal of Difficulties Order, 2017 and the notified position that a scheme sanctioned under section 18(4) or under implementation under section 18(12) of SICA is to be deemed an approved resolution plan under section 31(1) of the Code. On that basis, the earlier rehabilitation scheme and the modified draft rehabilitation scheme were treated as relevant and capable of being carried forward under the Code.

Conclusion: Yes. The sanctioned SICA scheme was held to be capable of recognition as an approved resolution plan under the Insolvency and Bankruptcy Code, 2016.

Issue (ii): Whether the petition under section 10 of the Insolvency and Bankruptcy Code, 2016 was maintainable and the corporate insolvency resolution process could proceed from the stage reached under the earlier SICA proceedings.

Analysis: The order concludes that the company had committed default and that the petition deserved admission. It reasons that steps already taken under BIFR and AAIFR should not be discarded, and that the Code permits the process to continue from the stage already achieved under the earlier rehabilitation exercise, rather than requiring a wholly fresh exercise. The tribunal therefore admitted the petition, commenced the corporate insolvency resolution process, appointed an interim resolution professional, and ordered moratorium and other consequential steps under the Code.

Conclusion: Yes. The petition was held maintainable and was admitted, with the insolvency process allowed to continue from the prior SICA stage.

Final Conclusion: The petition succeeded, the corporate insolvency resolution process was commenced, and the earlier rehabilitation framework under SICA was carried forward for treatment under the Insolvency and Bankruptcy Code, 2016.

Ratio Decidendi: A scheme sanctioned or under implementation under SICA, where carried forward through the statutory transition, can be recognised under the Insolvency and Bankruptcy Code, 2016, and the insolvency process may proceed from the stage already reached without restarting the rehabilitation exercise afresh.

---