law: Sick Industrial Companies (Special Provisions) Act, 1985
  23. Loss of fifty per cent net worth by industrial companies
  
   
  (1) If the accumulated losses of an industrial company, as at
  
  the end of any financial year (hereinafter referred to as the relevant
  
  financial year) have resulted in erosion of fifty per cent, or more of its peak
  
  net worth during the immediately 14[preceding four financial
  
  years],- 
  (a) the company shall, within a period of
  
  sixty days from the date (hereinafter referred to as the relevant date) of
  
  finalization of the duly audited accounts of the company of the relevant
  
  financial year- 
  (i) report the fact of
  
  such erosion to the Board; and
  (ii) hold a general meeting of the
  
  shareholders of the company for considering such erosion;
  (b) the Board of Directors shall, at least
  
  twenty-one days before the date on which the meeting under sub-clause (ii) of
  
  clause (a) is held, forward to every member of the company a report as to such
  
  erosion and the causes for such erosion;
  (c) the company may,
  
  by ordinary resolution passed at the meeting held under clause (a) remove a
  
  director (being a director appointed by the members of the company) and fill
  
  the vacancy created by such removal, so far as may be, in accordance with the
  
  procedure provided in sub-sections (2) to (6) of section 284 of the Companies
  
  Act, 1956.
  (2) A direct or removed under sub-section (1) shall not be
  
  entitled to any compensation or damages for termination of his appointment as
  
  director or of any appointment terminating with that as director.
  (3) If default is made in complying with the provisions of this
  
  section, every director or other officer of the company who is in default shall
  
  be punishable with imprisonment which shall not be less than six months but
  
  which may extend to two years and with fine.