IBC Section 228: Budget

Section 228 of Insolvency and Bankruptcy Code, 2016: Budget

Official Bare Act Text

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

The Board shall prepare, in such form and at such time in each financial year as may be prescribed, its budget for the next financial year, showing the estimated receipts and expenditure of the Board and forward the same to the Central Government.

Legal Commentary & Landmark Judgments: Section 228

Section 228 mandates the Board to prepare and submit its annual Budget to the Central Government for approval.

Annual Budget Formulation: The Board must prepare its budget for the next financial year in such form and at such time as may be prescribed.
Estimated Receipts and Expenditures: Must set forth the estimated receipts from fees, penalties, and grants, alongside planned operational and administrative expenditures.
Central Government Submission: The finalized budget must be forwarded to the Central Government for formal sanction and incorporation into fiscal planning.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court recognized that fiscal planning and budget scrutiny under Section 228 maintain institutional prudence and public accountability in Board governance.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Observed that statutory financial controls reinforce the regulatory autonomy of the insolvency ecosystem.

Courtroom Practice & Strategic Litigation Guidance:

The Board's expenditure plans are linked directly to approved Section 228 budget allocations; expenditures exceeding sanctioned heads require supplementary government authorization.