IBC Section 231: Bar of jurisdiction

Section 231 of Insolvency and Bankruptcy Code, 2016: Bar of jurisdiction

Official Bare Act Text

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

No civil court shall have jurisdiction in respect of any matter in which the Adjudicating Authority or the Board is empowered by, or under, this Code to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by such Adjudicating Authority or the Board under this Code.

Legal Commentary & Landmark Judgments: Section 231

Section 231 creates an absolute statutory Bar of Jurisdiction against Civil Courts in respect of any matter which the Adjudicating Authority or Board is empowered to determine.

Total Ouster of Civil Court Jurisdiction: No civil court has jurisdiction in respect of any matter in which the Adjudicating Authority (NCLT/DRT), NCLAT/DRAT, or the Board is empowered by the Code to pass orders.
Absolute Prohibition on Injunctions: No injunction can be granted by any civil court or authority in respect of any action taken or to be taken in pursuance of any power conferred by the Code.
Statutory Exclusivity: Consolidates all insolvency, liquidation, and avoidance disputes exclusively before the specialized tribunals established under the Code.

Key Landmark Precedents:

Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta (2021) 7 SCC 209: The Supreme Court delivered an authoritative judgment on Section 231, holding that the bar of civil court jurisdiction is complete and designed to prevent parallel civil suits from paralyzing insolvency resolution.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Affirmed that the non-obstante provisions and jurisdictional bar under Section 231 override traditional civil court remedies.

Courtroom Practice & Strategic Litigation Guidance:

If a debtor or third party obtains an ex parte stay or injunction from a civil court impacting insolvency assets, counsel for the RP/liquidator should immediately move an application under Order VII Rule 11 CPC r/w Section 231 IBC for rejection of the plaint.