CHAPTER VII FINANCE, ACCOUNTS AND AUDITCentral

Section 221 of The Insolvency and Bankruptcy Code, 2016.

The Central Government may, after due appropriation made by Parliament by law in this behalf, make to the Board grants of such sums of money as that Government may think fit for being utilised for the purposes of this Code.

Summary

The Central Government is permitted to provide financial grants of such sums of money as it thinks fit to the Board.
These grants are given to be utilized for the administrative and regulatory purposes of the Insolvency Code.
Every grant requires due appropriation, which means formal legislative spending authorization, by Parliament by law.

Practical examples

1In the annual budget, the Central Government plans to allocate fifty crore rupees to support the administrative setup of the insolvency regulator. To make this legal under Section 221 of the Insolvency and Bankruptcy Code, 2016, Parliament passes an appropriation bill, enabling the government to release these funds directly to the Board.

2The regulator needs to upgrade its electronic database to handle a surge in corporate bankruptcy cases. The Central Government provides a special development grant of five crore rupees to the Board, ensuring the transaction is made after due parliamentary approval as required under Section 221 of the 2016 Insolvency and Bankruptcy Act.

FAQ

1. Who has the authority to make grants to the Board under Section 221 of the Insolvency and Bankruptcy Code, 2016?

The Central Government has the authority to make financial grants to the Insolvency and Bankruptcy Board of India under Section 221 of the Insolvency and Bankruptcy Code, 2016.

2. What is the parliamentary process required for grants under Section 221 of the Insolvency and Bankruptcy Code, 2016?

Grants can only be made after due appropriation is made by Parliament by law in this behalf, meaning Parliament must formally vote and approve the allocation of funds.

3. What can the Board use the grants for under Section 221 of the Insolvency and Bankruptcy Code, 2016?

The Board is required to utilize the grants of money for the purposes of carrying out its functions and objectives under the Insolvency and Bankruptcy Code, 2016.

Test yourself

Q1.Under Section 221 of the Insolvency and Bankruptcy Code, 2016, who is authorized to make grants of money to the Insolvency and Bankruptcy Board of India?

Q2.What is the mandatory legislative step required before any funds can be released to the Board under Section 221 of the Insolvency and Bankruptcy Code, 2016?

Q3.Under Section 221 of the Insolvency and Bankruptcy Code, 2016, how is the exact amount of each financial grant to the Board determined?

Q4.To what specific end must the grants received under Section 221 of the Insolvency and Bankruptcy Code, 2016, be directed by the Board?

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