IBC Section 241: Rules and regulations to be laid before Parliament

Section 241 of Insolvency and Bankruptcy Code, 2016: Rules and regulations to be laid before Parliament

Official Bare Act Text

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

Every rule and every regulation made under this Code shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be;

so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.

Legal Commentary & Landmark Judgments: Section 241

Section 241 mandates that every Rule made by the Central Government and every Regulation made by the Board must be laid before each House of Parliament.

Parliamentary Scrutiny: Every rule and regulation must be laid before each House of Parliament while it is in session for a total period of thirty days.
Power of Modification or Annulment: Both Houses of Parliament may agree in making any modification or agree that the rule or regulation should not be made.
Savings for Prior Acts: Any parliamentary modification or annulment takes effect prospectively and does not prejudice the validity of anything previously done under that rule or regulation.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court emphasized that mandatory parliamentary tabling under Section 241 preserves legislative supremacy and democratic oversight over delegated rulemaking.
Lalit Kumar Jain v. Union of India (2021) 9 SCC 321: Observed that parliamentary review under Section 241 validates the constitutional balance between executive delegation and legislative control.

Courtroom Practice & Strategic Litigation Guidance:

Litigants arguing that an IBBI regulation exceeds delegated authority should verify parliamentary tabling records under Section 241; failure to table does not immediately void a rule but invites severe judicial scrutiny.