Section 233 of the Insolvency and Bankruptcy Code, 2016: Protection of Action Taken in Good Faith
Section 233 of the Insolvency and Bankruptcy Code, 2016 protects specified public authorities and insolvency functionaries from a suit, prosecution or other legal proceeding for anything done or intended to be done in good faith under the Code or the rules or regulations made under it.
Text of Section 233 of the Insolvency and Bankruptcy Code, 2016
No suit, prosecution or other legal proceeding shall lie against the Government or any officer of the Government, or the Chairperson, Member, officer or other employee of the Board or an insolvency professional or liquidator for anything which is in done or intended to be done in good faith under this Code or the rules or regulations made thereunder.
Meaning of Section 233 IBC
Section 233 is a statutory protection provision. Its purpose is to protect the persons expressly named in the section from legal proceedings in respect of acts done, or intended to be done, in good faith under the Insolvency and Bankruptcy Code, 2016 or under rules or regulations made under the Code.
The protection is tied to the statutory requirement of good faith. Section 233 does not state that every act of a protected person is immune from legal scrutiny merely because that person holds an office or performs a function under the Code. The act or intended act must fall within the language of the provision, including the requirement that it be in good faith under the Code, rules or regulations.
- the Government;
- any officer of the Government;
- the Chairperson, Member, officer or other employee of the Insolvency and Bankruptcy Board of India;
- an insolvency professional; and
- a liquidator.
What does "good faith" mean under the IBC?
Section 233 uses the expression "in good faith" but does not itself set out a separate definition of that expression. Whether the statutory protection applies therefore depends on the legal meaning of good faith in the relevant context and on the facts and circumstances of the particular act or intended act.
The key statutory question under Section 233 is not simply whether the person belongs to a protected category. The provision also requires a connection between the impugned conduct and something done or intended to be done in good faith under the Code or the rules or regulations made under it.
Section 233 should not be read as an unrestricted personal immunity. The statutory protection is framed around action done or intended to be done in good faith under the IBC framework. The application of the provision in an individual dispute depends on the relevant facts, the nature of the proceeding and the governing law.
Protection from suit, prosecution and other legal proceedings
The language of Section 233 refers to a "suit, prosecution or other legal proceeding". This gives the provision a broad procedural reach, but only within the conditions stated in the section. A person invoking the provision must fall within a category identified by Section 233, and the relevant act or intended act must satisfy the statutory good-faith connection with the Code, rules or regulations.
The provision is relevant to insolvency professionals and liquidators because they perform statutory functions during insolvency resolution and liquidation. It is also relevant to the Government and Government officers and to the Chairperson, Members, officers and employees of the IBBI when the statutory conditions are satisfied.
Section 233 and insolvency professionals
An "insolvency professional" is a person enrolled under Section 206 with an insolvency professional agency as its member and registered with the Board as an insolvency professional under Section 207. Insolvency professionals may perform functions assigned by the Code, subject to the applicable statutory provisions, rules, regulations and professional requirements.
Section 233 expressly includes an insolvency professional among the persons protected for qualifying good-faith action. The provision should nevertheless be read with the wider regulatory framework governing insolvency professionals, including the Board's powers concerning complaints, inspection, investigation and disciplinary action.
Section 233 and liquidators
A liquidator performs the functions assigned under the Code in a liquidation process. Section 233 expressly includes a liquidator within its protection for anything done or intended to be done in good faith under the Code or the rules or regulations made under it.
This protection operates according to the wording of Section 233 and does not replace the liquidator's statutory duties or the regulatory and supervisory mechanisms created by the Code.
Related provisions of the IBC
Section 233 follows Section 232, which treats specified IBBI personnel as public servants. Readers may also refer to Section 236 concerning trial of offences by Special Court, Section 238 concerning the overriding effect of the Code, Section 239 concerning the power to make rules and Section 240 concerning the power to make regulations.
Current legal position and official resources
The Insolvency and Bankruptcy Code has been amended from time to time, including by the Insolvency and Bankruptcy Code (Amendment) Act, 2026. For the current statutory and regulatory position, the latest Act, amendments, rules, regulations, notifications and circulars should be checked from official sources.
Updated for the legal position reviewed on 30 September 2026. Verify subsequent amendments, notifications, regulations and judicial decisions from official sources.