IBC Section 221: Grants by Central Government

Section 221 of Insolvency and Bankruptcy Code, 2016: Grants by Central Government

Official Bare Act Text

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

The Central Government may, after due appropriation made by Parliament by law in this behalf, make to the Board grants of such sums of money as that Government may think fit for being utilised for the purposes of this Code.

Legal Commentary & Landmark Judgments: Section 221

Section 221 authorizes the Central Government to make Grants and loans of money to the Board to support its statutory operations and institutional infrastructure.

Parliamentary Appropriation: The Central Government may, after due appropriation made by Parliament by law, make grants and loans to the Board.
Support for Regulatory Infrastructure: Funds are allocated to develop research facilities, nationwide training institutes, IT repositories, and administrative secretariats.
Financial Independence: Ensures that the Board has sufficient public budgetary support alongside fee revenues to maintain regulatory autonomy.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court noted that public budgetary backing under Section 221 ensures that the IBBI functions as an independent, well-resourced economic regulator.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Observed that the statutory endowment of the Board reflects the state's institutional commitment to modern bankruptcy governance.

Courtroom Practice & Strategic Litigation Guidance:

Budgetary grants received by the Board are subject to parliamentary audit and cannot be diverted to commercial ventures; they must be deployed strictly in furtherance of statutory insolvency mandates.