Admitting the application filed by DSJ Communications, an AAIFR bench also issued notice to BIFR.

In its appeal, DSJ Communications had claimed that it was an industrial company as defined by the provisions of section 3(1) (E) of the Sick Industrial Companies Act (Sica).

"The job work taken by DSJ Communications was being done by contractors on the printing machines belonging to it," DSJ Communications Ltd submitted in its appeal.

BIFR had rejected DSJ's application for being declared sick as it felt that the company's printing work was done on job work basis and hence, it did not perform any industrial activity on its own.

A three-member bench of BIFR had earlier ruled that the company did not satisfy the basic criteria for coming under the purview of Sica.

The BIFR bench had observed that as per the details given in the balance sheet of DSJ Communications, the main activity of the company appeared to be in investment and financing whereas Sica covered only industrial companies under its purview.

"The offset printing machine, the sole machine of the company was not in use and company's entire turnover came from financial business only," the board said.

DSJ Communications' application to BIFR was also opposed by its creditors Sicom, Industrial Development Bank of India (IDBI) and Bank of baroda.

The company had claimed that its net worth of Rs 47.33 crore was fully eroded by accumulated losses of Rs 48.96 crore as per the audited balance sheet for the extended financial year ended September 30, 1998.

The company's creditors said almost 80 per cent of the erosion was on account of write off of doubtful debts and advances and investments made in the group companies and the actual loss from the company's main activity was only Rs 8.12 crore.

They had further alleged that the company had written off advances of Rs 12.05 crore given to group companies without taking any recovery action against them.

The company said that all the sister companies were floated through public issues and investments were made after disclosing full facts and there was no siphoning off of funds.

DSJ Communications was incorporated in November, 1989 as Dalal Street Communications Pvt Ltd.