Section 231: Bar of Jurisdiction under the Insolvency and Bankruptcy Code, 2016
Section 231 restricts civil courts from deciding matters that an Adjudicating Authority is empowered to determine under the Insolvency and Bankruptcy Code, 2016 (IBC). It also prohibits injunctions against actions taken, or proposed to be taken, pursuant to orders of that authority.
Section 231: Statutory text
231. No civil court shall have jurisdiction in respect of any matter in which the Adjudicating Authority is empowered by, or under, this Code to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by such Adjudicating Authority under this Code.
Statutory wording reproduced from the supplied page. Check the consolidated legislation and amendments in the official resources below.
What does the bar of jurisdiction mean?
The provision has two connected parts. First, an ordinary civil court cannot exercise jurisdiction over a matter that the IBC empowers an Adjudicating Authority to decide. Second, a court or other authority cannot grant an injunction against an action taken or proposed pursuant to an order of that Adjudicating Authority under the Code.
The restriction is subject-matter specific: the relevant question is whether the IBC gives the Adjudicating Authority power to make an order concerning the particular dispute. Section 231 does not mean that every civil dispute involving an insolvent person or company automatically falls outside ordinary courts.
Meaning of important terms
Jurisdiction: Legal authority of a court or tribunal to hear and determine a matter. Bar of jurisdiction: A statutory exclusion of that authority for specified matters. Injunction: A judicial order restraining or requiring specified conduct. Adjudicating Authority: The authority designated by the IBC for the relevant category of insolvency or bankruptcy proceeding.
Which Adjudicating Authority decides IBC matters?
National Company Law Tribunal (NCLT): Under Section 60, the NCLT is the Adjudicating Authority for insolvency resolution and liquidation of corporate persons, subject to the Code's specific provisions. Section 60(5) sets out further jurisdiction in relation to corporate insolvency matters.
Debt Recovery Tribunal (DRT): Under Section 179, the DRT is the Adjudicating Authority for the insolvency and bankruptcy of individuals and partnership firms, subject to statutory qualifications, including Section 60 where applicable.
The applicable forum depends on the nature of the debtor, the proceeding and the precise statutory power invoked. Not every dispute connected with a debtor belongs before the NCLT or DRT merely because an insolvency process exists.
Why does Section 231 restrict injunctions?
The second limb prevents a court or other authority from issuing an injunction concerning actions carried out, or to be carried out, in pursuance of an order made by the IBC Adjudicating Authority. This supports the effectiveness of statutory insolvency orders and reduces conflicting proceedings.
It is important to distinguish an injunction against implementation of an IBC order from a challenge pursued through an appellate remedy provided by the Code. Section 231 does not itself remove the statutory rights of appeal.
Appeals and other legal remedies
Corporate insolvency: Section 61 provides appeals from specified NCLT orders to the National Company Law Appellate Tribunal (NCLAT), while Section 62 provides a further appeal to the Supreme Court on a question of law, subject to the statutory conditions and limitation periods.
Individual insolvency and bankruptcy: Sections 181 and 182 provide the appellate framework for relevant DRT and DRAT orders, subject to the Code's conditions.
Constitutional remedies: Section 231 is a statutory jurisdictional bar; it should not be described as eliminating the constitutional jurisdiction of the High Courts or Supreme Court. The availability and exercise of writ or supervisory jurisdiction depend on constitutional principles and the circumstances of the case, including the existence of effective statutory remedies.
How Section 231 relates to Section 63
Section 63 separately excludes civil court jurisdiction over matters in which the NCLT or NCLAT is empowered to pass an order under the Code. Section 231 is a broader provision framed by reference to an Adjudicating Authority and also contains the injunction restriction. These provisions should be read with the jurisdiction and appeal sections applicable to the proceeding.
Illustrative situations
Example 1: A party disagrees with an NCLT order made under the IBC and seeks a civil court injunction to stop its implementation. Section 231 is directly relevant; the party should assess the statutory appellate route rather than assume a civil suit is available.
Example 2: A dispute arises over a contract involving a company undergoing insolvency, but the specific claim is not one the IBC empowers the Adjudicating Authority to decide. Section 231 should not be assumed to bar the civil court merely because insolvency proceedings are pending; the precise subject matter and governing law require examination.
Related legal provisions and official sources
- Section 60: NCLT as Adjudicating Authority for corporate persons.
- Section 61: Appeals to NCLAT.
- Section 62: Appeal to Supreme Court on a question of law.
- Section 63: Civil court jurisdiction excluded in specified NCLT/NCLAT matters.
- Section 179: DRT as Adjudicating Authority for individuals and firms, subject to statutory provisions.
- Sections 181 and 182: Appeals relating to DRT/DRAT proceedings.
- Section 238: Overriding effect of the IBC in the event of inconsistency with other laws.
Read the Insolvency and Bankruptcy Code, 2016 overview. Consult India Code for the consolidated statute and IBBI's legal framework for official rules, regulations and notifications. Tribunal information is available from NCLT and NCLAT.
Frequently asked questions
Does Section 231 bar every civil suit involving a company in insolvency?
No. Its jurisdictional bar applies to matters that the Adjudicating Authority is empowered to decide under the IBC. The nature of the claim and statutory powers must be assessed.
Can a civil court stop implementation of an IBC Adjudicating Authority order?
Section 231 prohibits an injunction by a court or other authority in respect of action taken or to be taken pursuant to such an order. Applicable appeals should be considered.
Which tribunal hears a corporate insolvency matter?
The NCLT is generally the Adjudicating Authority for corporate insolvency and liquidation under Section 60, subject to the Code's provisions.
Is an appeal still possible despite Section 231?
Yes, where the IBC provides a statutory appellate remedy and its requirements are satisfied. Section 231 should not be confused with a general prohibition on appeals.
Reviewed: 23 October 2026. General legal information only; consult the current statutory text and case-specific legal advice before taking action.