Set up in January 1987 by the Rajiv Gandhi government, its objective was to determine sickness of industrial companies and to assist in reviving those that may be viable and shutting down the others.

[4] The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act of 2002 placed corporate debt outside the purview of the BIFR.

[5] By preventing reference to the BIFR, which had become a haven for the promoters of sick companies, the Act gives banks and financial institutions a better tool for recovering bad debt.

The Companies (Amendment) Bill, 2001 was introduced because the government considered that the BIFR had not met its objective of preventing industrial sickness.

[8] The Board has a Chairman and from two to fourteen other members, all to be qualified as High Court judges or else to have at least fifteen years of relevant professional experience.

[10] The board can take other actions including changes to management, amalgamation of the sick unit with a healthy one, sale or financial reconstruction.

It would impose time schedules for revival related activities to be completed, oversee their implementation and conduct periodic reviews of sick accounts.

The BIFR would provide a forum for sharing views, coordinating effort and developing a unified approach to dealing with sick companies, speeding up the start of corrective action.

[14] According to former Telecom Regulatory Authority of India (TRAI) chief Pradip Baijal, the board "was created to deal with the change in status quo outside government and given a quasi-judicial structure, to act in favour of public good, but has perhaps joined the tribe of numerous rent-seekers in the public ownership structure".

The reasons of sickness was devolvement of public issue of February 1995 and cancellation as well as forfeiture by Hudco of the amount paid by MS Shoes.