Section 241: Rules and Regulations to be Laid Before Parliament
Section 241 of the Insolvency and Bankruptcy Code, 2016 provides parliamentary oversight over rules and regulations made under the Code by requiring them to be laid before both Houses of Parliament.
Text of Section 241 of the Insolvency and Bankruptcy Code, 2016
Every rule and every regulation made under this Code shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.
Meaning and Scope of Section 241
Section 241 creates a legislative scrutiny mechanism for delegated legislation made under the Insolvency and Bankruptcy Code, 2016. The Code authorises the Central Government and the Insolvency and Bankruptcy Board of India, within their respective statutory powers, to make rules and regulations on matters specified by the Code. Section 241 requires every such rule and regulation to be placed before Parliament after it is made.
- Every rule and every regulation made under the Code must be laid before each House of Parliament.
- The laying must take place while Parliament is in session.
- The total laying period is thirty days, whether completed in one session or spread across two or more successive sessions.
- Both Houses may agree to modify the rule or regulation.
- Both Houses may also agree that the rule or regulation should not continue.
- A modification or annulment does not invalidate anything validly done earlier under the rule or regulation.
What Does "Laid Before Parliament" Mean?
In Section 241, laying before Parliament means formally placing subordinate legislation made under the Code before both the Lok Sabha and the Rajya Sabha for legislative scrutiny. The provision allows Parliament to examine delegated legislation without requiring each rule or regulation to be enacted as a separate Act.
Effect of Modification or Annulment
If both Houses agree to modify a rule or regulation within the period contemplated by Section 241, it thereafter operates only in the modified form. If both Houses agree that it should not be made, it thereafter ceases to have effect. The concluding safeguard in Section 241 expressly preserves the validity of actions already taken under the rule or regulation before its modification or annulment.
Rules and Regulations Under the IBC
The distinction is relevant because the Code separately provides rule-making and regulation-making powers. Rules are made under statutory authority conferred by the Code, including the rule-making power in Section 239. Regulations are made under statutory authority conferred on the Insolvency and Bankruptcy Board of India, including the regulation-making power in Section 240. Section 241 subjects both categories to the parliamentary laying requirement.
Commencement of Section 241
Section 241 was brought into force with effect from 19 August 2016 by a notification of the Ministry of Corporate Affairs issued under Section 1(3) of the Insolvency and Bankruptcy Code, 2016.
Why Section 241 Matters
The provision preserves parliamentary supervision over delegated legislation under the IBC. It permits detailed procedural and regulatory provisions to be made under powers granted by Parliament while retaining a statutory mechanism through which both Houses can modify or annul those rules or regulations.
Updated on 30 September 2026. The statutory text should be read with the latest amendments, notifications, rules and regulations applicable to the relevant insolvency or bankruptcy proceeding.