Sections 240B and 240C explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) inserts two sections after section 240A. New section 240B lets the Central Government, by notification, provide an electronic portal and the procedures for insolvency and bankruptcy processes, to be carried out on that portal. New section 240C lets the Central Government prescribe the manner and conditions for administering cross-border insolvency proceedings, with the Code and the Companies Act, 2013 applying with such exceptions, modifications and adaptations as the rules provide. Neither section is in the IBBI consolidated text of the Code amended up to 12 August 2021; both are explained here from the words of the Amendment Act.
Section 240B: the Central Government may, by notification, provide an electronic portal and the procedures related to insolvency and bankruptcy processes, "which shall be carried out on such electronic portal". Section 240C: the Central Government may prescribe the manner and conditions for cross-border insolvency proceedings, including recognition of proceedings, relief, judicial cooperation, assistance and coordination, for classes of debtors and countries it notifies; the rules may adapt the Code and the Companies Act, 2013, and draft rules are laid before Parliament. The Amendment Act, 2026 comes into force on the date or dates the Central Government notifies; the notification is not in the texts consulted, so check whether these sections have been notified.
Section 240B: the electronic portal
The text is: "Notwithstanding anything to the contrary contained in this Code, the Central Government may, by notification, provide an electronic portal and the procedures related to the insolvency and bankruptcy processes under this Code, which shall be carried out on such electronic portal."
Taking it in parts:
- Override. "Notwithstanding anything to the contrary contained in this Code". The section yields to nothing in the Code that is to the contrary. It does not mention other laws; section 238 is the general override clause (article 138).
- Power. The Central Government "may" provide a portal and procedures. It is a power, not a duty, and it is exercised "by notification".
- Subject. "the procedures related to the insolvency and bankruptcy processes under this Code". The text does not list the processes or the steps.
- Effect. The procedures "shall be carried out on such electronic portal". Once the Government has notified a portal and procedures, the text says they are carried out on it.
The section prints no portal name, no date, no fee, no log-in step and no procedure. All of these would come from a notification that is not in the texts consulted. This article states none. If you run a process and want to know how this section might bear on filing or service, a legal consultation can help you work from the notification once you have it.
Section 240C: rules for cross-border insolvency
Sub-section (1). "Notwithstanding anything to the contrary contained in this Code and the Companies Act, 2013, the Central Government may prescribe the manner and conditions for administering and conducting cross-border insolvency proceedings under this Code, including the process for recognition of proceedings, granting relief, judicial cooperation, assistance and coordination in connection with such proceedings, for such class or classes of debtors or corporate debtors involving such countries or territories outside India, as may be notified by the Central Government in this regard."
The features:
- Two overrides. The section overrides the Code and the Companies Act, 2013 where they are to the contrary. The reference to the Companies Act, 2013 is quoted as printed; the reader should check the current law for the corresponding provisions.
- What may be prescribed. The "manner and conditions for administering and conducting cross-border insolvency proceedings under this Code", including four named items: "the process for recognition of proceedings", "granting relief", "judicial cooperation" and "assistance and coordination in connection with such proceedings".
- Limits by class and country. The rules apply "for such class or classes of debtors or corporate debtors involving such countries or territories outside India, as may be notified". So the rules operate only for the classes of debtors and the countries or territories notified. Which classes and countries are notified is not in the texts consulted.
Sub-section (2). "The rules made under this section may provide that any of the provisions of this Code or the Companies Act, 2013 shall apply with such exceptions, modifications and adaptations, as may be required to administer and implement the provisions of this section and rules made thereunder, including designating one or more Benches for dealing with proceedings under this section." So the rules may adapt both Acts and designate Benches.
Sub-section (3). "A draft of every rule proposed under this section shall be laid before each House of Parliament in such manner as provided under sub-sections (4) to (6) of section 59A, which shall, mutatis mutandis apply, to the rules made under this section." The cross-reference is to new section 59A (group insolvency), whose sub-sections (4) to (6) are printed in the Amendment Act. Read with the words "mutatis mutandis", they require the draft to be laid for thirty days (which may be comprised in one session or in two or more successive sessions), allow each House to disapprove or modify, exclude from the thirty days any period during which a House is prorogued or adjourned for more than four consecutive days, and require the notified rules to be laid. This summary is built from the words of section 59A(4) to (6); the sub-section (3) cross-reference is quoted as printed.
Explanation. "For the purposes of this section, the expression 'corporate debtor' shall also include any person incorporated with limited liability outside India." So a person incorporated with limited liability outside India falls within the term for the purposes of this section.
Example (invented). Suppose the Central Government notifies a class of corporate debtors and a country, and makes rules under section 240C. A creditor of a limited-liability company incorporated in that country, with assets in India, asks the Adjudicating Authority to recognise foreign proceedings. The rules would then set the manner and conditions, and could designate a Bench. Without notified rules, class and country, the section by itself prints none of these steps. The facts here are invented to illustrate the structure.
| Question | Section 240B | Section 240C |
|---|---|---|
| Who acts | Central Government | Central Government |
| How | Notification | Rules; notification of classes and countries |
| Override | Contrary provisions of the Code | Contrary provisions of the Code and the Companies Act, 2013 |
| Parliament | Not mentioned | Draft laid under section 59A(4) to (6), mutatis mutandis |
| Detail | Not in the text | Left to rules |
Related provisions
- Rule-making matter. Section 69 of the Amendment Act inserts clause (zma) in section 239(2): "the manner and conditions under sub-section (1) of section 240C" (article 139).
- Existing cross-border sections. Sections 234 and 235 deal with agreements with foreign countries and the letter of request (article 135). Our post on cross-border insolvency under the IBC and the post on sections 64A, 240B and 240C give wider views.
- Section 240A. The special provisions for micro, small and medium enterprises are a separate section with its own post: MSME in the IBC under section 240A. Sections 240B and 240C come immediately after it.
- Section 59A. The group insolvency rules in new section 59A are explained in their own article.
No rule or regulation on the portal or on cross-border insolvency is in the texts consulted; the detail is left to rules that are not in them.
Amendments and notifications made after 12 August 2021, other than the Amendment Act, 2026, are not in the texts consulted and should be checked.
Need help with a cross-border or portal-based process?
If a debtor, creditor or professional has a cross-border element, the questions to settle are which class and country have been notified, and what the rules say. Our team can go through the Amendment Act's words with you in a legal consultation and compare them with any notification you hold.
Key takeaways
- Section 240B lets the Central Government provide an electronic portal and procedures, by notification, and says the procedures shall be carried out on that portal.
- Section 240C lets it prescribe the manner and conditions for cross-border insolvency proceedings for classes of debtors and countries it notifies.
- The rules may adapt the Code and the Companies Act, 2013 and may designate Benches.
- The Explanation brings a person incorporated with limited liability outside India within "corporate debtor" for this section.
- Draft rules are laid before Parliament under section 59A(4) to (6) mutatis mutandis; the Amendment Act, 2026 comes into force by notification, so check whether these sections have been notified.
Read next
- Sections 234 and 235: agreements with foreign countries and letter of request
- Section 239: power of the Central Government to make rules
- Sections 241 and 242: laying of rules before Parliament and power to remove difficulties
- Cross-border insolvency under the IBC
Disclaimer: Based on the IBBI consolidated text of the Insolvency and Bankruptcy Code, 2016 amended up to 12 August 2021 and on the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026), which comes into force on the date or dates notified by the Central Government, as consulted on 2 October 2026. It explains the words of the statute only; commencement notifications, other amendments made after 12 August 2021, notified thresholds, the rules and IBBI regulations, and the way tribunals and courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.