Section 242: Power to Remove Difficulties under the Insolvency and Bankruptcy Code, 2016
Section 242 of the Insolvency and Bankruptcy Code, 2016 gives the Central Government a limited statutory power to issue orders for removing difficulties in giving effect to the Code. The provision requires such an order to be published in the Official Gazette and prohibits an order that is inconsistent with the Code.
Updated: 30 September 2026. This page includes Section 242(1A), inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2026 and brought into force on 26 May 2026.
Current Text of Section 242
242. Power to remove difficulties.
(1) If any difficulty arises in giving effect to the provisions of this Code, the Central Government may, by order, published in the Official Gazette, make such provisions not inconsistent with the provisions of this Code as may appear to be necessary for removing the difficulty:
Provided that no order shall be made under this section after the expiry of five years from the commencement of this Code.
(1A) Notwithstanding anything contained in sub-section (1), if any difficulty arises in giving effect to the provisions of this Code, as amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2026, the Central Government may, by an order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Code, as may appear to it to be necessary or expedient for removing such difficulty:
Provided that no such order shall be made under this section after the expiry of a period of five years from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2026.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.
Meaning and Scope of Section 242
The expression "power to remove difficulties" refers to a limited power conferred on the Central Government to address practical or implementation difficulties that arise while giving effect to the statutory provisions. The power does not authorize the Government to make an order inconsistent with the Insolvency and Bankruptcy Code, 2016.
Under sub-section (1), the original power was subject to a five-year limit from the commencement of the Code. The 2026 amendment added sub-section (1A), which specifically addresses difficulties arising in giving effect to the Code as amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2026.
Section 242(1A) Inserted by the 2026 Amendment Act
Section 72 of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 inserted sub-section (1A) after Section 242(1). The new provision operates notwithstanding sub-section (1) and gives the Central Government a fresh, amendment-specific power to remove difficulties arising from implementation of the Code as amended in 2026.
Conditions Attached to the Power
- A difficulty must arise in giving effect to the relevant provisions of the Code.
- The power is exercisable by the Central Government.
- The measure must be made by an order published in the Official Gazette.
- The order cannot be inconsistent with the provisions of the Code.
- For Section 242(1A), the order must be necessary or expedient for removing a difficulty connected with implementation of the Code as amended by the 2026 Amendment Act.
- The power under Section 242(1A) is subject to the five-year statutory period specified in its proviso.
- Every order made under Section 242 must be laid before each House of Parliament as soon as may be after it is made.
Why Section 242 Matters
Section 242 is an implementation provision. It permits limited executive action where a genuine difficulty arises in applying the Code, while preserving the supremacy of the statutory text by expressly requiring that any removal-of-difficulties order remain consistent with the Code. The requirement to publish the order in the Official Gazette and to lay it before both Houses of Parliament also provides formal publication and legislative oversight.
Official Legal Resources
For the latest statutory amendments, commencement notifications and regulatory material, refer to the official legal framework maintained by the Insolvency and Bankruptcy Board of India.