Section 189 of the Insolvency and Bankruptcy Code, 2016: Constitution of Board
Section 189 of the Insolvency and Bankruptcy Code, 2016 specifies the composition of the Insolvency and Bankruptcy Board of India, the qualifications of its Chairperson and members, the selection process for non-ex officio appointments, their term of office and the basis for their service conditions.
Section 189 - Statutory Provision
(1) The Board shall consist of the following members who shall be appointed by the Central Government, namely:-
(a) a Chairperson;
(b) three members from amongst the officers of the Central Government not below the rank of Joint Secretary or equivalent, one each to represent the Ministry of Finance, the Ministry of Corporate Affairs and Ministry of Law, ex officio;
(c) one member to be nominated by the Reserve Bank of India, ex officio;
(d) five other members to be nominated by the Central Government, of whom at least three shall be the whole-time members.
(2) The Chairperson and the other members shall be persons of ability, integrity and standing, who have shown capacity in dealing with problems relating to insolvency or bankruptcy and have special knowledge and experience in the field of law, finance, economics, accountancy or administration.
(3) The appointment of the Chairperson and the members of the Board other than the appointment of an ex officio member under this section shall be made after obtaining the recommendation of a selection committee consisting of-
(a) Cabinet Secretary-Chairperson;
(b) Secretary to the Government of India to be nominated by the Central Government-Member;
(c) Chairperson of the Insolvency and Bankruptcy Board of India (in case of selection of members of the Board)-Member;
(d) three experts of repute from the field of finance, law, management, insolvency and related subjects, to be nominated by the Central Government-Members.
(4) The term of office of the Chairperson and members (other than ex officio members) shall be five years or till they attain the age of sixty-five years, whichever is earlier, and they shall be eligible for reappointment.
(5) The salaries and allowances payable to, and other terms and conditions of service of, the Chairperson and members (other than the ex officio members) shall be such as may be prescribed.
Meaning and Scope of Section 189
Section 189 governs the institutional composition of the Insolvency and Bankruptcy Board of India, commonly referred to as the IBBI or the Board. The Board itself is established and incorporated under Section 188 of the Insolvency and Bankruptcy Code, 2016.
Composition of the Board
The statutory composition combines a Chairperson, Central Government representatives, a Reserve Bank of India nominee and other members nominated by the Central Government. Of the five members nominated under Section 189(1)(d), at least three must be whole-time members.
| Category | Requirement under Section 189 |
|---|---|
| Chairperson | One Chairperson appointed by the Central Government. |
| Central Government representatives | Three officers not below the rank of Joint Secretary or equivalent, representing Finance, Corporate Affairs and Law, ex officio. |
| Reserve Bank of India | One member nominated by the RBI, ex officio. |
| Other members | Five members nominated by the Central Government, with at least three being whole-time members. |
Qualifications of Chairperson and Members
Section 189(2) requires the Chairperson and other members to be persons of ability, integrity and standing. They must have demonstrated capacity in dealing with insolvency or bankruptcy matters and possess special knowledge and experience in law, finance, economics, accountancy or administration.
Selection Committee
Except for ex officio members, appointments are made after obtaining the recommendation of the selection committee specified in Section 189(3). The committee includes the Cabinet Secretary as Chairperson, a Secretary to the Government of India nominated by the Central Government, the IBBI Chairperson when members of the Board are being selected, and three experts nominated by the Central Government from the specified professional fields.
Term of Office and Reappointment
Under Section 189(4), the Chairperson and members other than ex officio members hold office for five years or until attaining sixty-five years of age, whichever occurs earlier. The provision expressly permits reappointment.
Salaries and Service Conditions
Section 189(5) provides that the salaries, allowances and other terms and conditions of service of the Chairperson and members, other than ex officio members, are to be prescribed under the Code.
Related Provisions
Section 188: Establishes and incorporates the Insolvency and Bankruptcy Board of India.
Section 190: Provides for removal of a member from office on the grounds specified in that section.
Section 191: Deals with the powers of the Chairperson.
Section 192: Deals with meetings of the Board.
Section 196: Sets out the powers and functions of the Board.
Official Legal Resources
India Code - Central Acts and Legislation