Sections 241 and 242 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.
Section 241 requires every rule and every regulation made under the Code to be laid before each House of Parliament for thirty days. Section 242 lets the Central Government, by an order published in the Official Gazette, make provisions not inconsistent with the Code to remove a difficulty in giving effect to it, within a time limit. The Insolvency and Bankruptcy Code (Amendment) Act, 2026 inserts a second removal-of-difficulties power in new section 242(1A), limited to difficulties in giving effect to the Code as amended by that Act, with a five-year limit running from its own commencement. This article follows the IBBI consolidated text of the Code amended up to 12 August 2021 and then shows the change.
Section 241: every rule and regulation is laid before each House of Parliament for a total of thirty days; if both Houses agree to modify it or that it should not be made, it has effect only as modified or is of no effect, without prejudice to the validity of anything previously done. Section 242(1): the Central Government may, by order published in the Official Gazette, make provisions not inconsistent with the Code to remove a difficulty; no order after five years from the commencement of the Code. New 242(1A): a similar power for difficulties in giving effect to the Code as amended by the Amendment Act, 2026, with a five-year limit from that Act's commencement.
Section 241: rules and regulations laid before Parliament
The text: "Every rule and every regulation made under this Code shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation."
Taking the elements:
- What is laid: "every rule and every regulation", so both the Central Government's rules (section 239) and the Board's regulations (section 240).
- When: "as soon as may be after it is made".
- For how long: "a total period of thirty days", which may fall in one session or in two or more successive sessions, while Parliament is in session.
- What Parliament may do: before the expiry of the session immediately following, both Houses may agree on a modification or that the rule or regulation should not be made.
- Effect: the rule or regulation then has effect only in modified form or is of no effect.
- Saving: modification or annulment is "without prejudice to the validity of anything previously done under that rule or regulation".
The section does not say that a rule takes effect only after laying. It says it is laid after it is made. New section 59A(4) opens with the words "Notwithstanding anything contained in section 241" and sets a draft-laying rule for the group insolvency rules (article 052); new section 240C(3) borrows that procedure for cross-border rules (article 141). Section 240A has its own laying provisions in sub-sections (3) to (6) for notifications on micro, small and medium enterprises. To check whether a rule you rely on has been laid or modified, a legal consultation can help you trace it from the notification.
Section 242(1): power to remove difficulties
"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."
The proviso: "no order shall be made under this section after the expiry of five years from the commencement of this Code."
- Trigger: "any difficulty arises in giving effect to the provisions of this Code".
- Instrument: an "order, published in the Official Gazette".
- Content: "such provisions not inconsistent with the provisions of this Code as may appear to be necessary for removing the difficulty". The limit is that the provisions must not be inconsistent with the Code.
- Time limit: five years from "the commencement of this Code". Section 1(3) leaves commencement of the Code to notification, and no notification is in the texts consulted, so this article gives no date for the end of that period.
Section 242(2): laying of orders
"Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament." Unlike section 241, this provision prints no thirty-day period and no power in Parliament to modify the order. It says only that the order is laid.
What the Amendment Act, 2026 changes
Section 72 of the Amendment Act inserts a sub-section (1A) in section 242:
"(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."
| Feature | Section 242(1) (consolidated text) | New section 242(1A) (2026 Act) |
|---|---|---|
| Difficulty in | "giving effect to the provisions of this Code" | "giving effect to the provisions of this Code, as amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2026" |
| Power | Make provisions "necessary" | Make provisions "necessary or expedient" |
| Instrument | Order published in the Official Gazette | Order published in the Official Gazette |
| Limit on content | Not inconsistent with the Code | Not inconsistent with the Code |
| Time limit | Five years from the commencement of this Code | Five years from the date of commencement of the Amendment Act, 2026 |
Two points. The new power uses "necessary or expedient", where sub-section (1) uses "necessary". And the time limit is tied to "the date of commencement" of the Amendment Act, which is a date to be notified; this article gives no date. 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 this change has been notified.
Sub-section (2) says "Every order made under this section shall be laid", and the new sub-section (1A) is within the section; the Amendment Act does not alter sub-section (2).
Example (invented). After the 2026 Act is brought into force, a difficulty arises in applying a newly inserted provision together with an older one. The Central Government, within five years of the date of commencement of the Amendment Act, publishes an order in the Official Gazette under sub-section (1A) that makes a provision not inconsistent with the Code. The order is laid before each House of Parliament as soon as may be. The example is invented; the sections do not say what kinds of difficulty may be so treated.
Rules and regulations
No rule or regulation set is named here, since sections 241 and 242 deal with the laying and the removal-of-difficulties order themselves.
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 tracing a rule, a regulation or a removal-of-difficulties order?
An order under section 242 or a rule laid under section 241 can change the working of a provision. Our team can check the text and the source with you in a legal consultation and set out what the sections say.
Key takeaways
- Section 241 requires every rule and regulation to be laid before each House of Parliament for a total of thirty days.
- If both Houses agree on a modification or annulment, the rule has effect only as modified or is of no effect, without prejudice to what was done earlier.
- Section 242(1) lets the Central Government make provisions not inconsistent with the Code by order to remove a difficulty, within five years of the commencement of the Code.
- New section 242(1A) gives a similar power, "necessary or expedient", for the Code as amended by the 2026 Act, within five years of that Act's commencement.
- The Amendment Act, 2026 comes into force by notification; check whether it has been notified.
Read next
- Section 239: power of the Central Government to make rules
- Section 240: power of the Board to make regulations
- Sections 243 and 244: repeal of old insolvency Acts, savings and transitional provisions
- Sections 240B and 240C: electronic portal and rules for cross-border insolvency
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.