Analysing the Overriding Effect of the Insolvency and Bankruptcy Code, 2016

Analysing the Overriding Effect of the Insolvency and Bankruptcy Code, 2016

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Volume 13 Issue 1 ()

The Insolvency and Bankruptcy Code, 2016 (‘IBC, 2016’) brought in a paradigm shift from the ‘debtor-in-possession’ regime to a ‘creditor-in-control’ regime. In order to accomplish this transformation and ensure the smooth functioning of the IBC, 2016, the legislature provided for a non-obstante clause under §238 of the IBC, 2016. The non-obstante clause has an overriding effect on any law for the time being in force which is inconsistent with the provisions of the IBC, 2016. However, this tool must be used cautiously and should be utilised only when the test of inconsistency, which has evolved through various case laws, gives positive results. This article discusses the scope and applicability of §238 of the IBC, 2016 and its effect on other statutes. It analyses the position of the IBC, 2016 vis-à-vis seven statutes including, the Maharashtra Relief Undertaking (Special Provisions) Act, 1958, Companies Act, 2013, Securities and Exchange Board of India Act, 1992, Advocates Act, 1961, Prevention of Money Laundering Act, 2002, Arbitration and Conciliation Act, 1996, Real Estate (Regulatory and Development) Act, 2016 and Electricity Act, 2003.

Cite as: Sara Jain, Analysing the Overriding Effect of the Insolvency and Bankruptcy Code, 2016, 13 NUJS L. Rev. 39 (2020)