Insolvency and Bankruptcy Code, 2016 | Parliamentary oversight

Section 241 IBC: Rules and Regulations to Be Laid Before Parliament

Section 241 of the Insolvency and Bankruptcy Code, 2016 requires every rule and regulation made under the Code to be placed before both Houses of Parliament. It establishes a 30-day laying requirement and enables both Houses jointly to modify or annul subordinate legislation while preserving the validity of earlier actions.

Full statutory text of Section 241

241. Rules and regulations to be laid before Parliament. Every rule and every regulation made under this Code shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.

This provision reproduces the wording supplied in the original webpage. Check the consolidated Act and subsequent notifications on India Code and the IBBI legal framework portal when applying the law.

Meaning and purpose of Section 241

Section 241 creates parliamentary scrutiny of delegated legislation made under the IBC. Parliament enacted the parent Code, while detailed rules and regulations are made by authorities exercising powers conferred by that Code. Requiring these instruments to be laid before Parliament allows elected representatives to examine them and, if both Houses agree within the statutory window, modify or annul them.

The section applies to every rule and every regulation made under the Code. It is not a requirement that each individual rule or regulation receive a fresh parliamentary vote before it can operate. The actual commencement and effect of a particular instrument depend on its own terms, the enabling provisions and applicable law.

Key requirements explained

Requirement	What Section 241 provides
Instruments covered	Every rule and every regulation made under the IBC.
Where laid	Before each House of Parliament: the Lok Sabha and the Rajya Sabha.
When laid	As soon as may be after the rule or regulation is made, while the House is in session.
Total laying period	30 days, which may fall in one session or in two or more successive sessions.
Modification or annulment	Both Houses must agree within the statutory period for the instrument to be modified or rendered ineffective thereafter.
Past actions	Modification or annulment does not invalidate anything previously done under the instrument.

How the 30-day parliamentary laying period works

The 30 days need not be consecutive calendar days in a single parliamentary session. The statute expressly allows the total to be spread across one session or two or more successive sessions. The relevant period for agreement by both Houses extends until the expiry of the session immediately following the session, or successive sessions, in which the prescribed laying period is completed.

The precise calculation in a real case depends on the parliamentary sessions and the actual laying dates. Section 241 should not be read as allowing one House acting alone to alter a rule or regulation through this mechanism.

What happens if Parliament modifies a rule or regulation?

If both Houses agree to a modification within the statutory window, the instrument thereafter has effect in its modified form. If both Houses agree that it should not have been made, the instrument thereafter has no effect. The final proviso safeguards the validity of actions previously taken under it.

Important distinction: The protection for earlier actions does not mean that all future actions may continue under a rule that has been annulled. The statute expressly distinguishes earlier acts from the rule's future operation.

Important legal terms

Term	Explanation
Delegated legislation	Rules or regulations made by an authorised body under powers delegated by an Act of Parliament.
Rule	Subordinate legislation made under a statutory rule-making power; Section 239 empowers the Central Government to make rules for carrying out the IBC.
Regulation	Subordinate legislation made under a statutory regulation-making power; Section 240 empowers the Insolvency and Bankruptcy Board of India to make regulations consistent with the Code and rules.
Laying before Parliament	Placing an instrument before each House for parliamentary scrutiny in accordance with the prescribed procedure.
Modification	A change agreed by both Houses under Section 241, operating prospectively as specified by the provision.
Annulment	An agreement by both Houses that an instrument should not have been made, resulting in its having no effect thereafter.

Section 239 empowers the Central Government to make rules by notification to carry out the Code. Section 240 empowers the Insolvency and Bankruptcy Board of India (IBBI) to make regulations by notification, provided they are consistent with the Code and rules. Section 241 adds parliamentary oversight to both kinds of subordinate legislation.

For the operative requirements in any insolvency case, readers should consult the relevant current rule or regulation as amended, rather than relying on Section 241 alone. The Ministry of Corporate Affairs and IBBI publish relevant official materials.

Practical example

Suppose an IBC regulation is made and duly laid before both Houses. Later, within the statutory period, both Houses agree to change a specified procedural requirement. Under Section 241, the regulation then operates in its modified form. Actions validly completed under the original version before that change are not invalidated merely because of the parliamentary modification.

Frequently asked questions

Does every IBC regulation have to be laid before Parliament?

Yes. Section 241 applies to every rule and every regulation made under the IBC.

Is the laying period 30 days?

Yes. The total is 30 days and may be spread over one or more successive parliamentary sessions, as the section provides.

Can only the Lok Sabha cancel an IBC regulation?

Not under the modification or annulment procedure in Section 241. Both Houses must agree.

Does annulment invalidate actions already taken?

No. Section 241 expressly protects the validity of anything previously done under the rule or regulation.

Who makes IBC rules and regulations?

The Central Government makes rules under Section 239, and IBBI makes regulations under Section 240, within their respective statutory powers.

Official legal resources

This article explains the statutory framework for general information. For a particular regulation, verify the latest amendment, notification and parliamentary record.