India Insolvency Bankruptcy Code, 2016, a never ending interpretational quagmire. IBC is the single most Law in India which have caused unprecedented imbalance in the way various Laws coexist.It has implemented in a manner which seemingly ignored the fundamental Principles of Law and Rights & Liabilities.

1. IBC Conundrum- Section 238 read with Section 14 of IBC, 2016
Shri Biswajit Das, Advocate, Supreme Court of India,
Managing Partner, Juris & Juris
biswajit@jurisnjuris.com
B-4/115, Safdarjung Enclave, New Delhi-110029
www.jurisnjuris.com
Section 238 (Provisions of this Code to override other laws) along with Section 14 (Moratorium) of
IBC,2016 are being used by Corporate Insolvency Resolution Professional (CIRP) and NCLT to thwart and
stall every other proceedings against the Company/Corporate Debtor and has taken in its sweep even
the Rights an Liabilities, which is absolutely wrong application.
One small yet simple example; denying MSME claimant 20% P.A. rate of interest under section 16 of
MSME Act, 2006 citing Section 238 read with Section 14 of IBC, 2016 is like treating the entitlement
under the MSME Act, 2006 as a process for IBC and giving its sweeping overriding effect to nullify the
said entitlement. This is like comparing apple with orange. These kinds of misapplication have
imbalanced IBC, 2016 making it a perfect candidate for its premature death. Even the Hon’ble SC
judgment rendered in swiss ribbons (2019) upholding its constitutionality can’t come to the rescue of
IBC, 2016. It is only a matter of days before it gets crumbled on its own imbalanced weighty burden.
The moment the Insolvency Resolution application is admitted, all proceedings against the Company/
Corporate Debtor are stalled under the moratorium provision of section 14 so that the Company doesn’t
have to suffer further loss to it during the process of the resolution of its insolvency plan and become
unviable for resolution.
While Section 238 begets a “Non-Obstante clause” qua inconsistency contained in any other law giving
the effect of IBC primacy over other laws, Section 14 thereof triggers moratorium over process of
dispute against the Company/Corporate Debtor to facilitate the insolvency proceeding.
Ironically, the entire India treats Section 238 as a super overriding and overarching provision qua
everybody and everything else under any other law not realizing that this Section 238 is nothing but an
ordinary provision ubiquitously found in every other special legislation. Strangely the said universal
understanding is fortified by some judgments rendered under misdirected argument and inadequate
assistance.
Even though the aforesaid careless application of Section 238 is causing a lot of heartburning and
aggravation of grievances, none could unravel the formula to solve this mystery. Almost all have
resigned to the fate that may be this is the Law. The (a) peculiar design, (b) concept of public interest as
a measure in the objective of the IBC 2016, (c) tendency to invoke older doctrines and (d) lack of
innovation in legal application are the sole reason which caused the present IBC application on ground.

2. Certain things shouldn’t change and that is the Rule of Civilization and Civility, which is the source of all
law and thus can be regarded as its mother. No one should accept the universal application as a gospel
truth when it comes to matter of Civility & Rights.
Exercising the Power of Law, we are applying rudimentary yet simple tests of Jurisprudence and Rule of
Law innovatively to secure deserving entitlement “notwithstanding”.
While Section 238 uses “Non-Obstante” clause, we too use “Non-Obstante” as a weapon to counter it.
“Non-Obstante” is pitted against “Non-Obstante”. Our experiences on similar situation guarantee the
success of our “Non-Obstante” over the “Non-obstante” of Section 238.
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