"It is evident from the audited annual reports that the company was engaged in publication of magazines, all its printing work was done on job work basis and it did not perform any industrial activity," the BIFR order said.

Under the Sick Industrial Companies (special provisions) Act (Sica), BIFR considers only those companies cases which are engaged in industrial activity.

The board also observed that details given in the balance sheet of DSJ Communications, the main activity of the company appeared to be investment and financing whereas the Act (Sica) covered only industrial companies under its purview.

DSJ Communication had approached BIFR in November 1998 to be declared sick after its net worth (share capital and reserves) of Rs 47.33 crore up toSeptember 1998 was eroded by accumulated losses of Rs 48.96 crore. The board order also said it was not clear as to how the company claimed to own an industrial undertaking when it had sold the land and building and the plant and machinery it owned was lying idle.

DSJ Communication had informed BIFR that the land and building of its Chennai unit was sold in November 1997 to pay off the dues of secured creditors and the Mumbai unit was closed since February 1998 due to the downtrend in the stock market, which resulted in fall in circulation of the magazine Dalal Street.

BIFR further stated that the company did not have Secretariat of Industrial Assistance (SIA) registration and the same was applied in November 1998 when the application was filed with it. For a company engaged in industrial activity it has to be registered with SIA under industry ministry. The order said the company had informed BIFR that it did not require SIA registration for operating printing machine.

However, when the application wasfiled with BIFR, as a matter of abundant precaution, they (DSJ Communications) had obtained an SIA registration also, the order stated. Banks and financial institutions -- Bank of Baroda, State Industrial and Investment Corporation of Maharashtra (Sicom) and Industrial Development Bank of India - had opposed the company move to be declared sick by BIFR.