IBC Section 197: Constitution of advisory committee, executive committee or other committee

Section 197 of Insolvency and Bankruptcy Code, 2016: Constitution of advisory committee, executive committee or other committee

Official Bare Act Text

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

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.

Legal Commentary & Landmark Judgments: Section 197

Section 197 empowers the Board to constitute advisory committees, executive committees, and other specialized committees to advise it on regulatory policy.

Specialized Expert Committees: The Board may constitute advisory or executive committees consisting of members of the Board and external industry experts, jurists, and economists.
Advisory Function: Such committees examine specialized subjects such as corporate liquidation, individual insolvency, cross-border frameworks, and valuation standards.
Remuneration and Allowances: Members of advisory committees are paid such fees and allowances as specified by regulations.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court observed that advisory committees constituted under Section 197 provide vital market feedback that informs evidence-based regulatory reforms.
Committee of Creditors of Essar Steel v. Satish Kumar Gupta (2020) 8 SCC 531: Noted that expert committee deliberations under the Code assist the regulator and Parliament in refining statutory procedures.

Courtroom Practice & Strategic Litigation Guidance:

Reports and discussion papers published by IBBI advisory committees under Section 197 can be relied upon before constitutional courts as persuasive external aids to interpret legislative intent behind subsequent amendments.