IBC Section 245: Amendments of Act 9 of 1932

Section 245 of Insolvency and Bankruptcy Code, 2016: Amendments of Act 9 of 1932

Official Bare Act Text

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

The Indian Partnership Act, 1932 shall be amended in the manner specified in the First Schedule.

Legal Commentary & Landmark Judgments: Section 245

Section 245 amends the Indian Partnership Act, 1932 to harmonize partnership dissolution and partner insolvency with the provisions of the Code.

Harmonization with Partnership Law: Amends provisions of Act 9 of 1932 in the manner specified in the First Schedule to the Code.
Effect of Insolvency on Partners: Synchronizes the legal status of an insolvent partner with the bankruptcy order mechanisms under Part III of the Code.
Firm Dissolution Alignment: Clarifies that insolvency resolution or bankruptcy of a firm or its partners is governed exclusively under the Code.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court noted that consequential amendments under Section 245 align the century-old Partnership Act with the unified recovery principles of the Code.
State Bank of India v. V. Ramakrishnan (2018) 17 SCC 394: Affirmed that partnership insolvency under Part III integrates directly with general partnership law.

Courtroom Practice & Strategic Litigation Guidance:

When drafting dissolution notices or restructuring deeds for partnership firms facing debt defaults, counsel must account for Section 245 amendments to avoid conflict with Part III insolvency triggers.