Insolvency and Bankruptcy Code, 2016 / Part IV / Chapter II
Section 198 of the Insolvency and Bankruptcy Code, 2016: Condonation of Delay
Section 198 empowers the relevant Adjudicating Authority to condone a delay when the Insolvency and Bankruptcy Board of India (IBBI) does not perform an act within the period specified under the Code. The authority must record its reasons in writing.
Text of Section 198 - Condonation of delay
198. Condonation of delay. - Notwithstanding anything contained in this Code, where the Board does not perform any act within the period specified under this Code, the relevant Adjudicating Authority may, for reasons to be recorded in writing, condone the delay.
The provision is contained in Part IV, Chapter II of the Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016), dealing with the powers and functions of the Board.
Meaning and scope of Section 198
Condonation of delay means legally excusing a failure to comply with a prescribed time limit in circumstances permitted by law. Under Section 198, the subject of the delay is an act that the Board was required to perform within a period fixed by the Code.
The opening words, "Notwithstanding anything contained in this Code", give this provision overriding effect within the Code to the extent of an inconsistency concerning the specific delay it addresses. They do not create a general power to waive all statutory deadlines.
The expression "may" indicates discretion rather than automatic condonation. The Adjudicating Authority must consider the circumstances and record reasons in writing for allowing the delay.
When can delay be condoned?
- An act of the Board: The delayed act must be one to be performed by the Insolvency and Bankruptcy Board of India under the Code.
- A specified period: The Code must specify the relevant period for that act.
- Failure to act in time: The Board must not have performed the act within that period.
- Relevant forum: The matter must be before the Adjudicating Authority competent for the relevant proceedings.
- Written reasons: Any order condoning the delay must state the reasons supporting the decision.
Section 198 does not prescribe a fixed number of additional days, nor does it say that delay is condoned merely because it occurred. The facts, the applicable statutory provision and the competent forum remain important.
Who is the relevant Adjudicating Authority?
Under the IBC, the adjudicating forum depends on the type of insolvency matter. Section 5(1) defines the Adjudicating Authority for Part II as the National Company Law Tribunal (NCLT). Section 60 addresses the NCLT's jurisdiction for corporate persons and related matters. Section 179 identifies the Debt Recovery Tribunal (DRT) as the Adjudicating Authority for Part III, subject to the Code's provisions, including Section 60 where applicable.
These definitions provide context; they do not mean that either tribunal can condone every delay in every insolvency proceeding. The particular statutory power and forum must be identified first.
Section 198 compared with other IBC time limits
Section 198 is specifically about the Board's delayed acts. Other IBC provisions prescribe separate time limits and, in some cases, distinct rules for extensions or appeals. For example, Section 61(2) governs the time for certain appeals to the NCLAT, including its own limited extension mechanism. It should not be treated as interchangeable with Section 198.
Frequently asked questions
Does Section 198 permit condonation of every delay under the IBC?
No. Its wording is confined to an act the Board fails to perform within a period specified under the Code.
Is condonation of delay automatic?
No. The relevant Adjudicating Authority has discretion, and reasons for condonation must be recorded in writing.
Does Section 198 state a maximum number of days that can be condoned?
No fixed maximum period is stated in Section 198 itself. The applicable statutory context and the authority's jurisdiction still matter.
Can a creditor use Section 198 to extend an appeal deadline?
Not simply on that basis. Appeal deadlines are governed by their own provisions, such as Section 61(2) for applicable NCLAT appeals.
Official legal references
For the authoritative text and subsequent legal developments, consult the India Code official legislation portal, the IBBI legal framework and notifications, and the Ministry of Corporate Affairs publication of the Insolvency and Bankruptcy Code (historical consolidated edition; consult current amendments as well).
Read more: The Insolvency and Bankruptcy Code, 2016 - index and provisions.
This article explains the statutory provision for general information. The applicability of a time limit and the availability of condonation depend on the relevant proceeding and current law.