IBC Section 222: Board's Fund

Section 222 of Insolvency and Bankruptcy Code, 2016: Board's Fund

Official Bare Act Text

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

(1) There shall be constituted a Fund to be called the Fund of the Insolvency and Bankruptcy Board and there shall be credited thereto-

(a) all grants, fees and charges received by the Board under this Code;

(b) all sums received by the Board from such other sources as may be decided upon by the Central Government;

(c) such other funds as may be specified by the Board or prescribed by the Central Government.

(2) The Fund shall be applied for meeting-

(a) the salaries, allowances and other remuneration of the members, officers and other employees of the Board;

(b) the expenses of the Board in the discharge of its functions under section 196;

(c) the expenses on objects and for purposes authorised by this Code;

(d) such other purposes as may be prescribed.

Legal Commentary & Landmark Judgments: Section 222

Section 222 establishes the Board's Fund to receive all grants, fees, charges, and revenues and specifies permissible statutory expenditures.

Composition of Fund: Credited with all government grants, loans, registration fees, examination fees, and monetary penalties collected by the Board under the Code.
Permissible Application of Fund: Applied towards salaries and allowances of members and staff, administrative expenses of the Board, and expenses incurred in discharging statutory functions.
Custody and Management: Managed in accordance with regulations framed by the Board and held in authorized scheduled commercial bank accounts.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: Held that the statutory creation of the Board's Fund under Section 222 secures the financial viability and self-sustaining character of the regulator.
Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 436: Affirmed that the transparent financial architecture of the Board ensures accountability in managing public regulatory receipts.

Courtroom Practice & Strategic Litigation Guidance:

Disciplinary fines and penalties collected by the Board are credited to the Fund and audited annually by the CAG, preventing any private appropriation or off-balance-sheet utilization.