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CS Professional · Insolvency and Bankruptcy - Law and Practice · Introduction to Insolvency and Bankruptcy Code

The Central Government notifies different dates for bringing different sections of the Insolvency and Bankruptcy Code, 2016 into force, so that the provisions on the Board and insolvency professional agencies start earlier than the provisions on the corporate insolvency resolution process. A creditor argues this is invalid because the Code must start as a whole on one date. Under Section 1 of the Code, what is the correct position?

The Central Government may notify different dates for different provisions of the Code. Any reference to the commencement of the Code in a provision is read as a reference to the commencement of that provision. Phased commencement is therefore valid and does not need a fresh Act.

  1. AThe Code must start on a single date, and phased commencement is invalid
  2. BThe Central Government may appoint different dates for different provisions, and a reference to commencement in a provision means commencement of that provisionCorrect
  3. COnly Parliament, by a fresh Act, can bring individual provisions into force on different dates
  4. DDifferent dates may be appointed only for provisions dealing with individuals and not for corporate persons

Explanation

Section 1(3) lets the Central Government appoint the commencement date by notification in the Official Gazette. The proviso allows different dates for different provisions, and any reference to commencement of the Code in a provision is read as commencement of that provision. So the creditor's argument fails, and the single-date option is wrong.

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