IBC Section 254: Amendments of Act 6 of 2009

Section 254 of Insolvency and Bankruptcy Code, 2016: Amendments of Act 6 of 2009

Official Bare Act Text

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

The Limited Liability Partnership Act, 2008 shall be amended in the manner specified in the Tenth Schedule.

Legal Commentary & Landmark Judgments: Section 254

Section 254 amends the Limited Liability Partnership Act, 2008 to bring the insolvency and winding up of LLPs under the unified regime of the Code.

Insolvency of LLPs Harmonized: Amends Act 6 of 2009 in the manner specified in the Tenth Schedule to the Code.
Corporate Debtor Status for LLPs: Ensures that Limited Liability Partnerships are treated as corporate persons capable of undergoing CIRP and liquidation before the NCLT under Part II.
Repeal of Inconsistent LLP Winding-Up Rules: Subordinates traditional LLP winding-up rules to the statutory resolution timelines of the Code.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court noted that Section 254 ensures uniform insolvency treatment for corporate bodies, whether incorporated as companies or LLPs.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Affirmed that the definition of corporate debtor under Section 3(8) r/w Section 254 embraces all limited liability vehicles.

Courtroom Practice & Strategic Litigation Guidance:

An operational or financial creditor owed a debt by a Limited Liability Partnership can initiate a Section 7 or Section 9 petition before the NCLT; the minimum statutory threshold (currently ₹1 crore) applies equally to LLPs.