| The basis of defining industrial sickness is/are: |
| 1. A unit incurring losses for 4 successive year leading to erosion of its net worth of 50% or more. |
| 2. Default/failure to repay loans within 9 months of the demand made by the creditors. Which of these statements is/are correct? |
A) Only 1
B) Only 2
C) Both 1 and 2
D) neither 1 nor 2
Correct Answer: C
Solution :
[c] According to Companies (Second Amendment) Act, 2002 "Sick Industrial Company' means an industrial company which has (i) The Accumulated losses in any financial year equal to 50 per cent or more of its average net worth during four years immediately preceding such financial year; or (ii) Failed to repay its debts within any three consecutive quarters on demand made in writing for its repayment by a creditor or creditors of such company."
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