Section 197 of IBC 2016: Constitution of Advisory, Executive and Other Committees

Section 197 authorises the Insolvency and Bankruptcy Board of India (IBBI) to constitute advisory committees, executive committees and other committees to help it discharge its statutory functions efficiently. The composition and working of advisory committees are addressed by the IBBI (Advisory Committee) Regulations, 2017.

Text of Section 197

197. Constitution of advisory committee, executive committee or other committee. - The Board may, for the efficient discharge of its functions, may constitute advisory and executive committees or such other committees, as it may deem fit, consisting of a Chairperson and such other members as may be specified by regulations.

The text above retains the wording of the published provision, including its repeated use of the word "may". For authoritative statutory wording, consult the IBBI-hosted Insolvency and Bankruptcy Code, 2016 (PDF).

Meaning and scope of Section 197

The word "may" gives the Board discretion to establish committees when it considers them useful. Section 197 does not itself require that every possible committee be permanently constituted. Committees provide expert input, assist governance and support the Board's work; their establishment does not automatically transfer all statutory decision-making powers of the Board to them.

Advisory committees: provide specialist advice on subjects within their assigned remit.
Executive committees: may be constituted by the Board for the efficient discharge of functions, subject to applicable legal provisions.
Other committees: may address specific issues as the Board considers appropriate.
Composition: committees have a Chairperson and other members as specified in applicable regulations.

IBBI (Advisory Committee) Regulations, 2017

The regulations were issued under Section 197 read with Section 240 of the Code. Section 240 is the Board's regulation-making power. The 2017 regulations give practical effect to Section 197 for advisory committees.

Regulation 2: Definitions

An Advisory Committee is a committee constituted by an order of the Board under Section 197 read with these regulations. The Board means the IBBI established under Section 188(1). The Secretary is an officer designated by the Board.

Regulation 3: Constitution and functions

The Board may establish an Advisory Committee by order to obtain expert advice. The regulations identify committees on service providers, corporate insolvency and liquidation, individual insolvency and bankruptcy, and other subject-specific matters. Each constitution order specifies the committee's composition and broad remit. A committee may offer advice on its own initiative and provide advice or professional support when requested by the Board.

Regulation 4: Membership and term

Advisory committees comprise professional members (eminent academicians or practitioners) and general members (eminent citizens without direct involvement or interest in the subject), broadly in a 2:1 ratio. A person cannot simultaneously serve on more than one advisory committee. A member's term may not exceed three years, although reappointment is permitted. The Board designates a general member as Chairperson and a senior officer as Secretary; the Secretary may speak but does not vote.

Regulations 5 to 7: Meetings, fees and conduct

Under Regulation 5, the committee meets when and where it considers appropriate; 50 percent of its existing strength constitutes a quorum. The Secretary convenes meetings and maintains records. Regulation 6 addresses sitting fees and travel reimbursement, subject to the applicable text and subsequent changes. Regulation 7 deals with confidentiality and disclosure of members' interests, including restrictions on participation where a conflict arises.

Read the Advisory Committee Regulations, 2017 (government-hosted PDF) and check the IBBI official website for subsequent amendments and notifications.

Section 188: establishes and incorporates the Insolvency and Bankruptcy Board of India.
Section 196(1)(l): empowers the Board to constitute committees, particularly those under Section 197.
Section 240: empowers the Board to make regulations consistent with the Code.

Frequently asked questions

Is constitution of an advisory committee mandatory?

No. Section 197 uses discretionary language and allows the Board to constitute committees as it considers fit for efficient performance of its functions.

Can an advisory committee make binding IBBI regulations?

Section 197 does not itself confer independent regulation-making power on an advisory committee. The Board's regulation-making authority is governed by Section 240 and other applicable provisions.

Who chairs an advisory committee?

Under Regulation 4 of the 2017 regulations, the Board designates one of the general members as Chairperson.

Official references and further reading

IBC 2016 - IBBI official PDF | India Code | IBBI

Read the Insolvency and Bankruptcy Code, 2016 - section index

Editorial note: This page explains the statutory provision and related 2017 regulations for general information. For a particular appointment, committee meeting or compliance issue, verify the latest operative regulations and Board orders.