The Insolvency and Bankruptcy Code, of 2016 introduced a paradigm shift in India’s corporate legal landscape. One of its most significant features is the overriding effect it has on other laws. This article delves into the overriding effect of the IBC 2016, explaining its implications on various legal proceedings and its role in streamlining India’s Insolvency and Bankruptcy framework.


The insolvency and bankruptcy procedure in India was rife with delays, inefficiencies, and disjointed regulations prior to the passage of the IBC. The IBC was developed in order to streamline and update the pre-existing bankruptcy and insolvency rules into a single, all-encompassing framework.


Overriding effect on other laws:

Its superseding effect is established by Section 238 of the Code. It says that the IBC will remain in force despite any inconsistencies with existing laws that are now in effect. This means that the IBC supersedes all other laws, including any incongruous clauses in current agreements, contracts, or regulations. This overall effect has broad ramifications.


  • Superseding earlier laws: The IBC superseded various antiquated laws and regulations related to insolvency and bankruptcy, including the Sick Industrial Companies (Special Provisions) Act of 1985 (SICA) and the Companies Act of 1956. The overarching impact guaranteed that the IBC would be the prevailing statute in these situations, simplifying the legal landscape.
  • Uniformity in Process: By overriding inconsistent provisions in various laws, the IBC brings uniformity to the insolvency and bankruptcy process. This uniformity is crucial for efficient resolution, as it eliminates the confusion arising from different laws and procedures.
  • Resolving Conflicting Provisions: Before the IBC was passed into law, numerous contracts and agreements contained stipulations that were at odds with its rules. The overriding impact enables the Code to prevail, streamlining insolvency procedures and preventing parties from taking advantage of such ambiguities in contracts.
  • Clarity for Creditors and Debtors: The overarching effect benefits creditors and debtors by clarifying the legal framework within which insolvency proceedings will take place. This predictability promotes transparency and justice throughout the process.
  • Avoiding Protracted Litigation: The overriding effect discouraged parties from initiating protracted legal battles to circumvent the provisions of IBC. It encourages stakeholders to adhere to the procedures of IBC, promoting timely resolution.



The Insolvency and Bankruptcy Code, 2016, with its overriding effect, has transformed India’s insolvency and bankruptcy landscape. It has brought clarity, efficiency, and uniformity to the process, making it easier for businesses to resolve financial distress.

While challenges persist, the overriding effect of IBC still remains a cornerstone of its success, ensuring that it prevails over conflicting laws and contributes to a more robust and resilient Indian economy.

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