Section 292 — Rehabilitation of sick public sector companies

(1) The
provisions of this section shall apply to a public sector company which is facing
financial or operational problems and is declared as a sick company by the
concerned Minister-in-Charge of the Federal Government.

(2) After a company is declared as a sick co mpany under sub -section
(1), any institution, authority, committee or person authorised by the concerned
Minister-in-Charge of the Federal Government in this behalf may draw up a plan
for the rehabilitation, reconstruction and reorganisation of such company, hereafter
in this section referred to as the rehabilitation plan.
(3) Without prejudice to the generality of the foregoing provision, the
rehabilitation plan, may, in addition to any other matter, provide for all or any of
the following—
(a) reduction of capital so as to provide for all or any of the matters
referred to in section 89 or reconstruction, compromise,
amalgamation and other arrangements so as to provide for all or any
of the matters referred to in section 2 79 or section 2 82 or section
285;

(b) alteration of share capital and variation in the rights and obligations
of shareholders or any class of shareholders;

(c) alteration of loan structure, debt rescheduling or conversion into
shares carrying special rights or other relief and modification in the
terms and conditions in respect of outstanding debts and liabilities
of the company or any part of such loan, debts or liabilities or
variation in the rights of the creditors or any class of them including
any security pertaining thereto;

(d) acquisition or transfer of shares of the company on the specified
terms and conditions;

(e) issue of further capital including shares carrying special rights and
obligations relating to voting powers, dividend, redemption or
treatment on winding up;

(f) removal and appointment of directors(including the chief executive)
or other officers of the company;

(g) amendment, modification or cancellation of any existing contract;
or

(h) alteration of the memorandum or articles or changes in the
accounting policy and procedure.

(4) The rehabilitation plan shall be submitted for approval to the
concerned Minister-in-Charge of the Federal Government which shall, unless it
otherwise decides for reasons to be recorded, cause it to be published in the official
Gazette for ascertaining the views of the shareholders, creditors and other persons
concerned within a specified period.
(5) Before approving the rehabilitation plan, the concerned Minister-in-
Charge of the Federal Government shall take into consideration the views relating
thereto received from any quarter within the specified period.

(6) On the approval of the rehabilitation plan by the concerned Minister-
in-Charge of the Federal Government, its provisions, with such modification as may
be directed by the concerned Minister-in-Charge of the Federal Government, shall
become final and take effect and b e implemented and shall be valid, binding and
enforceable in all respects notwithstanding anything in this Act or any other law or
the memorandum or articles of the company or in any agreement or document
executed by it or in any resolution passed by the company in general meeting or by
its board, whether the same be registered, adopted, executed or passed, as the case
may be, before or after the commencement of this Act.
(7) Any provision contained in the memorandum, articles, agreements,
documents or resolutions as aforesaid shall, to the extent to which it is repugnant to
the provisions of this Act or the rehabilitation plan, become void.
(8) No compensation or damages shall be payable to any one for any
matter or arrangement provided for in, or actio n taken in pursuance of, the
rehabilitation plan.
(9) The concerned Minister-in-Charge of the Federal Government may
vary or rescind rehabilitation plan from time to time and issue such directions as to
its implementation and matters ancillary thereto as it may deem expedient.
(10) The concerned Minister -in-Charge of the Federal Government or
any authority or other person authorised by the concerned Minister-in-Charge of
the Federal Government in this behalf shall supervise the implementation of the
rehabilitation plan and may issue such directions to the parties concerned as may
be deemed necessary by such Government, authority or person, as the case may be.
(11) Whosoever fails to give effect, to carry out or implement the
rehabilitation plan or any matter provided for therein or any direction issued under
sub-section (10), shall be liable to imprisonment of either description for a term
which may extend to three years and fine not exceeding five million rupees and, in
case of a continuing failure, to a further fine not exceeding ten thousand rupees for
every day after the first during which the failure or default continues.
(12) Until a rehabilitation plan has been approved by the concerned
Minister-in-Charge of the Federal Government and is in operation, the provisions
of this section shall not prejudice or affect the power or rights of a company or its
shareholders or creditors to enter into, arrive at or make any compromise,
arrangement or settlement in any manner authorised by this Act or any other law
for the time being in force.
(13) The rehabilitation plan approved by the concerned Minister -in-
Charge of the Federal Government and any modification thereof shall, unless
otherwise directed by it, be published in the official Gazette and a copy thereof shall
be forwarded by the concerned Minister-in-Charge of the Federal Government to
the registrar who shall register and keep the same with the documents of the
company.
(14) The Federal Government may, by notification in the official
Gazette, make rules to carry out the purposes of this section.
(15) This section is in addition to and not in derogation of any other law
regarding rehabilitation of any entity.

PART X

WINDING UP

PRELIMINARY