Non-Performing Assets and Rehabilitation of Industrial Undertaking (Legal Proceedings) Ordinance, 2000

This 2000 ordinance was written to speed up the legal process for recovering bad loans ("non-performing assets") owed to banks and financial institutions, and to help restructure or sell off failing industrial businesses that owed that money. It works together with a companion law, the Corporate and Industrial Restructuring Corporation (CIRC) Ordinance, 2000, which set up a government-linked body called the Corporation to buy up and manage these bad debts.

Section 2 defines the key terms: a "non-performing asset" is a loan or similar financial claim where the borrower (the "obligor") has been in default for more than 365 days and owes more than thirty million rupees, though the government can change that threshold later by notification. Section 3 makes clear this ordinance overrides other laws where they conflict.

The core mechanism is in Sections 4 to 8: it gives each provincial High Court exclusive civil and criminal jurisdiction over disputes involving these bad debts and the Corporation, sets up special benches to hear the cases, and directs the High Court to broadly follow the Code of Civil Procedure, 1908 for civil matters and the Code of Criminal Procedure, 1898 for criminal ones, while also drawing on banking-court and company-law procedures depending on the type of case. Section 6 deals with transferring pending court cases into this new system.

Section 17 is notable: if a bad-debt-linked industrial unit has been shut down and non-functioning for at least two years (counted as 18 out of any 24 months), the High Court can order its immediate sale, transfer, lease, or a change of management, on the Corporation's application. Section 18 sets out an appeal process: a person unhappy with a High Court decree or order has thirty days to appeal to a larger bench, but getting a stay generally requires depositing cash or security equal to the amount in dispute, and appeals must be decided within ninety days of being admitted; a further appeal to the Supreme Court is possible within thirty days of that decision.

This is an old ordinance from 2000, issued during a period when the National Assembly and Senate were suspended, and its definitions section shows it has already been amended at least once. Anyone relying on it today should check whether it, or the CIRC Ordinance it depends on, remains in force and whether the thirty-million-rupee threshold or other figures have since changed.