(1) The industry has been in operation for a minimum of five years from the date of commencement of its commercial production or business, not due to the industry's own intention or managerial weakness, but due to circumstances beyond its control, for the last three consecutive years, operating at a capacity of thirty percent or less than the connected capacity of the industry, and continuously operating at a loss during those three years. Government of Nepal can declare the existing industry as a sick industry by adopting the prescribed procedure based on the prescribed criteria.
(2) According to sub-section (1) if it is found that the industry which is closed due to disease can resume operation after providing certain exemptions, facilities or concessions from the scheme or project proposal submitted by that industry and the study conducted by the Ministry, the Government of Nepal is determined to revive, reconstruct and manage such industry. May provide discounts, facilities or concessions as specified for the period.
(3) According to sub-section (1), if a cooperative organization proposes to operate an industry that has been declared sick by the Government of Nepal with the consent of the investor, then the industry can be operated through such cooperative organization, subject to the prescribed conditions, considering the capacity, appropriateness and feasibility of such cooperative organization.