IBC Section 190: Removal of member from office

Section 190 of Insolvency and Bankruptcy Code, 2016: Removal of member from office

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

The Central Government may remove a member from office if he-

(a) is an undischarged bankrupt as defined under Part III;

(b) has become physically or mentally incapable of acting as a member;

(c) has been convicted of an offence, which in the opinion of the Central Government involves moral turpitude;

(d) has, so abused his position as to render his continuation in office detrimental to the public interest:

Provided that no member shall be removed under clause (d) unless he has been given a reasonable opportunity of being heard in the matter.

Legal Commentary & Landmark Judgments: Section 190

Section 190 empowers the Central Government to remove any member of the Board on established statutory grounds of insolvency, physical/mental incapacity, or misconduct.

Statutory Grounds for Removal: Removal is authorized if a member is adjudicated bankrupt, declared of unsound mind, convicted of an offence involving moral turpitude, or acquired conflicting financial interests.
Prejudice to Public Interest: A member may be removed if he has so abused his position as to render his continuance detrimental to the public interest.
Mandatory Natural Justice: No member can be removed on grounds of abuse of position without being afforded a reasonable opportunity of being heard in an inquiry.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: Held that security of tenure subject to strict statutory removal safeguards ensures the functional independence of regulatory members from arbitrary executive interference.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Noted that high regulatory integrity is necessary to preserve international credibility in India's bankruptcy framework.

Courtroom Practice & Strategic Litigation Guidance:

Any inquiry under Section 190 must strictly adhere to the principles of natural justice; orders passed in violation of fair hearing guarantees are amenable to judicial review under writ jurisdiction.