Admitting Canara Bank's appeal challenging the BIFR order which had declared ABCL a sick entity, AAIFR, however, did not grant a stay as sought by the bank counsel.

In the appeal filed under Section 25 of Sick Industrial Companies (Provisions) Act, 1985, the Canara Bank has sought quashing of BIFR order and directions for appointment of special auditors to probe ABCL's accounts for last three years. BIFR had on July 9 this year declared ABCL a sick company and appointed Industrial Development Bank of India as its operating agency to frame a revival scheme.

The appellate authority will issue notice to the company to file its reply in the next four weeks and will hear the case next on January 27, 2000.

Canara Bank, in consortium with Allahabad Bank, had given a credit of about Rs 14 crore to ABCL, promoted by mega star Amitabh Bachchan, which included its share of Rs 10 crore. BIFR had merely accepted ABCL's submissions without any documentary proof in support thereof, the bank said adding the order had provided an effective shield to ABCL under Section 25 of the Act putting creditors in a disadvantageous position.

The bank said BIFR had also failed to seek ABCL's explanation on allegations regarding irregularities in its balance sheet and depletion of stocks. ABCL has been declared sick under the Sick Industrial Companies (Provisions) Act, 1985 following the net worth of the company.