IBC Section 244: Transitional provisions

Section 244 of Insolvency and Bankruptcy Code, 2016: Transitional provisions

Official Bare Act Text

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

(1) Until the Board is constituted or a financial sector regulator is designated under section 195, as the case may be, the powers and functions of the Board or such designated financial sector regulator, including its power to make regulations, shall be exercised by the Central Government.

(2) Without prejudice to the generality of the power under sub-section (1), the Central Government may by regulations provide for the following matters:-

(a) recognition of persons, categories of professionals and persons having such qualifications and experience in the field of finance, law, management or insolvency as it deems necessary, as insolvency professionals and insolvency professional agencies under this Code;

(b) recognition of persons with technological, statistical, and data protection capability as it deems necessary, as information utilities under this Code; and

(c) conduct of the corporate insolvency resolution process, insolvency resolution process, liquidation process, fresh start process and bankruptcy process under this Code.

Legal Commentary & Landmark Judgments: Section 244

Section 244 provides transitional provisions regarding the functioning of the Board and the regulatory framework until rules and regulations are formally framed.

Transitional Operational Continuity: Ensured that the Board and tribunals could function effectively during the interim period preceding the notification of detailed regulations.
Validation of Initial Actions: Validated early administrative steps, draft registrations, and preparatory notifications executed by the government.
Bridge to Full Implementation: Prevented any operational standstill while the multi-tiered institutional architecture was being created.

Key Landmark Precedents:

Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: The Supreme Court noted that transitional provisions like Section 244 enabled the seamless birth of a modern economic regime without administrative hiatus.
Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: Reaffirmed the validity of early regulatory actions taken during the Code's transitional gestation.

Courtroom Practice & Strategic Litigation Guidance:

Section 244 serves as an interpretive anchor establishing that the procedural rollout of the Code was designed to be continuous and resilient against technical administrative lapses.