According to bank sources, the company does not fall under the category of a sick firm, as it does not meet the BIFR guidelines on sick companies.

ABCL has declared the company sick as per Section 3(1)(O) of the Sick Industrial Companies (Special Provisions) Act, 1985.

Canara Bank had earlier approached Mumbai high court for appointing a court receiver to take charge of the ABCL's assets. The company, however, had demanded a stay on it. The case pertaining to the appointment of a court receiver is expected to come up for hearing on Wednesday.

One of the bank's main contentions is that ABCL was referred to the BIFR after the appointment of a court receiver to take charge of its assets. The company registered itself under BIFR on March 22, five days after the appointment of the court receiver (March 17).

Canara Bank had earlier unsuccessfully tried to attach Amitabh Bachchan's bungalow `Pratiksha' at Juhu, Mumbai, currently mortgaged with Sahara India. The Mumbai high court last month passed an injunction order restraining the company from selling the property.

ABCL has an outstanding of Rs 9 crore towards Canara Bank. In a civil suit filed on March 17 for non-payment of the outstandings, Canara Bank had charged ABCL chairman Amitabh Bachchan and vice-chairman Jaya Bachchan for not paying advances provided by way of cash-credit facility (Rs 2.4 crore), overdraft against book debts (Rs 5.6 crore), foreign letter of credit (Rs 2.5 crore) and guarantee facility (Rs 3.5 crore).

According to the bank's charges, the company had not paid the principal amount and the interest accrued on it from the time the loan was given to ABCL. As on March 31, 1998, the company's stock stood at Rs 18.96 crore.

Going by the stock statement, as on December 31, 1998, the stock of ABCL productions (released movies) stood atRs 25.76 crore. The cost incurred on production was Rs 16.33 crore. The company realised Rs 12.73 crore from the released movies and is yet to recover another Rs 15.29 crore. The cost incurred on unreleased production was Rs 10.46 crore as on December 31, 1998.

With three years of consecutive losses since 1995, ABCL's net worth has been wiped out. For the year ended September 30, 1998, ABCL piled up accumulated losses worth Rs 70.82 crore, while its net worth was Rs 60.52 crore. The losses included unprovided liabilities of Rs 2.31 crore.