Vidhi Codex

The Insolvency and Bankruptcy Code, 2016

The Insolvency and Bankruptcy Code, 2016

Corporate2016282 sections

The Insolvency and Bankruptcy Code, 2016, is a unified national law regulating the reorganization, insolvency resolution, and liquidation of failing businesses and personal debts. Specifically, it applies broadly to companies, limited liability partnerships, partnership firms, and ordinary individuals. This important law matters because it replaces an outdated, slow legal system with a strict, time-bound process to efficiently handle financial defaults. By doing this, the Code aims to maximize the value of a debtor's assets, promote new entrepreneurship, and safely increase the availability of credit. Ultimately, carefully balancing stakeholder interests improves India's business ease and accelerates the country's overall economic growth.

Start reading →Read full ActSections
Corporate Insolvency Resolution Process (CIRP under IBC 2016)
  1. 1. Short title, extent and commencement
  2. 2. Application
  3. 3. Definitions
  4. 4. Application of this Part
  5. 5. Definitions
  6. 6. Persons who may initiate corporate insolvency resolution process
  7. 7. Initiation of corporate insolvency resolution process by financial creditor
  8. 8. Insolvency resolution by operational creditor
  9. 9. Application for initiation of corporate insolvency resolution process by operational creditor
  10. 10. Initiation of corporate insolvency resolution process by corporate applicant
  11. 11. Persons not entitled to make application
  12. 11A. Disposal of applications under section 54C and under section 7 or section 9 or section 10
  13. 12. Time-limit for completion of insolvency resolution process
  14. 12A. Withdrawal of application admitted under section 7, 9 or 10
  15. 13. Declaration of moratorium and public announcement
  16. 14. Moratorium
  17. 15. Public announcement of corporate insolvency resolution process
  18. 16. Appointment and tenure of interim resolution professional
  19. 17. Management of affairs of corporate debtor by interim resolution professional
  20. 18. Duties of interim resolution professional
  21. 19. Persons to extend cooperation to interim resolution professional
  22. 20. Management of operations of corporate debtor as going concern
  23. 21. Committee of creditors
  24. 22. Appointment of resolution professional
  25. 23. Resolution professional to conduct corporate insolvency resolution process
  26. 24. Meeting of committee of creditors
  27. 25. Duties of resolution professional
  28. 25A. Rights and duties of authorised representative of financial creditors
  29. 26. Application in respect of certain transactions or trading not to affect processes
  30. 27. Replacement of resolution professional by committee of creditors
  31. 28. Approval of committee of creditors for certain actions
  32. 29. Preparation of information memorandum
  33. 29A. Person not eligible to be resolution applicant
  34. 30. Submission of resolution plan
  35. 31. Approval of resolution plan
  36. 32. Appeal
  37. 32A. Liability for prior offences, etc.
  38. 33. Initiation of liquidation
  39. 34. Appointment of liquidator and fee to be paid
  40. 35. Powers and duties of liquidator
  41. 36. Liquidation estate
  42. 37. Powers of liquidator to access information
  43. 38. Omitted
  44. 39. Omitted
  45. 40. Omitted
  46. 41. Omitted
  47. 42. Omitted
  48. 43. Preferential transactions and relevant time
  49. 44. Orders in case of preferential transactions
  50. 45. Avoidance of undervalued transactions
  51. 46. Relevant period for undervalued transactions
  52. 47. Application by creditors, member or partner in cases of certain transactions or trading
  53. 48. Order in cases of undervalued transactions
  54. 49. Transactions defrauding creditors
  55. 50. Extortionate credit transactions
  56. 51. Orders of Adjudicating Authority in respect of extortionate credit transactions
  57. 52. Secured creditor in liquidation proceedings
  58. 53. Distribution of assets
  59. 54. Dissolution of corporate debtor
  60. 54-I. Committee of creditors
  61. 54-O. Initiation of corporate insolvency resolution process
  62. 54A. Corporate debtors eligible for pre-packaged insolvency resolution process
  63. 54B. Duties of insolvency professional before initiation of pre-packaged insolvency resolution process
  64. 54C. Application to initiate pre-packaged insolvency resolution process
  65. 54D. Time-limit for completion of pre-packaged insolvency resolution process
  66. 54E. Declaration of moratorium and public announcement during pre-packaged insolvency resolution process
  67. 54F. Duties and powers of resolution professional during pre-packaged insolvency resolution process
  68. 54G. List of claims and preliminary information memorandum
  69. 54H. Management of affairs of corporate debtor
  70. 54J. Vesting management of corporate debtor with resolution professional
  71. 54K. Consideration and approval of resolution plan
  72. 54L. Approval of resolution plan
  73. 54M. Appeal against order under section 54L
  74. 54N. Termination of pre-packaged insolvency resolution process
  75. 54P. Application of provisions of Chapters II, III, VI and VII to this Chapter
  76. 55. Fast track corporate insolvency resolution process.
  77. 56. Time period for completion of fast track corporate insolvency resolution process.
  78. 57. Manner of initiating fast track corporate insolvency resolution process.
  79. 58. Applicability of Chapter II to this Chapter.
  80. 59. Voluntary liquidation of corporate persons
  81. 60. Adjudicating authority for corporate persons
  82. 61. Appeals and Appellate Authority
  83. 62. Appeal to Supreme Court
  84. 63. Civil court not to have jurisdiction
  85. 64. Expeditious disposal of applications
  86. 65. Fraudulent or malicious initiation of proceedings
  87. 66. Fraudulent or wrongful trading
  88. 67. Proceedings under section 66.
  89. 67A. Fraudulent management of corporate debtor during pre-packaged insolvency resolution process.
  90. 68. Punishment for concealment of property
  91. 69. Punishment for transactions defrauding creditors
  92. 70. Punishment for misconduct in course of corporate insolvency resolution process
  93. 71. Punishment for falsification of books of corporate debtor
  94. 72. Punishment for wilful and material omissions from statements relating to affairs of corporate debtor
  95. 73. Punishment for false representations to creditors
  96. 74. Omitted
  97. 75. Punishment for false information furnished in application
  98. 76. Omitted
  99. 77. Punishment for providing false information in application made by corporate debtor
  100. 77A. Punishment for offences related to pre-packaged insolvency resolution process
  101. 10A. Suspension of initiation of corporate insolvency resolution process
  102. 78. Application
  103. 79. Definitions
  104. 80. Eligibility for making an application
  105. 81. Application for fresh start order
  106. 82. Appointment of resolution professional
  107. 83. Examination of application by resolution professional
  108. 84. Admission or rejection of application by Adjudicating Authority
  109. 85. Effect of admission of application
  110. 86. Punishment for contravention (Part II)
  111. 87. Application against decision of resolution professional
  112. 88. General duties of debtor
  113. 89. Replacement of resolution professional
  114. 90. Directions for compliances of restrictions, etc.
  115. 91. Revocation of order admitting application
  116. 92. Discharge order
  117. 93. Standard of conduct
  118. 94. Application by debtor to initiate insolvency resolution process
  119. 95. Application by creditor to initiate insolvency resolution process
  120. 96. Interim moratorium
  121. 97. Appointment of resolution professional
  122. 98. Replacement of resolution professional
  123. 99. Submission of report by resolution professional
  124. 100. Admission or rejection of application
  125. 101. Moratorium
  126. 102. Public notice and claims from creditors
  127. 103. Registering of claims by creditors
  128. 104. Preparation of list of creditors
  129. 105. Repayment plan
  130. 106. Report of resolution professional on repayment plan
  131. 107. Summoning of meeting of creditors
  132. 108. Conduct of meeting of creditors
  133. 109. Voting rights in meeting of creditors
  134. 110. Rights of secured creditors in relation to repayment plan
  135. 111. Approval of repayment plan by creditors
  136. 112. Report of meeting of creditors on repayment plan
  137. 113. Notice of decisions taken at meeting of creditors
  138. 114. Order of Adjudicating Authority on repayment plan
  139. 115. Effect of order of Adjudicating Authority on repayment plan
  140. 116. Implementation and supervision of repayment plan
  141. 117. Completion of repayment plan
  142. 118. Repayment plan coming to end prematurely
  143. 119. Discharge order
  144. 120. Standard of conduct
  145. 121. Application for bankruptcy
  146. 122. Application by debtor
  147. 123. Application by creditor
  148. 124. Effect of application
  149. 125. Appointment of insolvency professional as bankruptcy trustee
  150. 126. Bankruptcy order
  151. 127. Validity of bankruptcy order
  152. 128. Effect of bankruptcy order
  153. 129. Statement of financial position
  154. 130. Public notice inviting claims from creditors
  155. 131. Registration of claims
  156. 132. Preparation of list of creditors
  157. 133. Summoning of meeting of creditors
  158. 134. Conduct of meeting of creditors
  159. 135. Voting rights of creditors
  160. 136. Administration and distribution of estate of bankrupt
  161. 137. Completion of administration
  162. 138. Discharge order
  163. 139. Effect of discharge
  164. 140. Disqualification of bankrupt
  165. 141. Restrictions on bankrupt
  166. 142. Modification or recall of bankruptcy order
  167. 143. Standard of conduct
  168. 144. Fees of bankruptcy trustee
  169. 145. Replacement of bankruptcy trustee
  170. 146. Resignation by bankruptcy trustee
  171. 147. Vacancy in office of bankruptcy trustee
  172. 148. Release of bankruptcy trustee
  173. 149. Functions of bankruptcy trustee
  174. 150. Duties of bankrupt towards bankruptcy trustee
  175. 151. Rights of bankruptcy trustee
  176. 152. General powers of bankruptcy trustee
  177. 153. Approval of creditors for certain acts
  178. 154. Vesting of estate of bankrupt in bankruptcy trustee
  179. 155. Estate of bankrupt
  180. 156. Delivery of property and documents to bankruptcy trustee
  181. 157. Acquisition of control by bankruptcy trustee
  182. 158. Restrictions on disposition of property
  183. 159. After-acquired property of bankrupt
  184. 160. Onerous property of bankrupt
  185. 161. Notice to disclaim onerous property
  186. 162. Disclaimer of leaseholds
  187. 163. Challenge against disclaimed property
  188. 164. Undervalued transactions
  189. 165. Preference transactions
  190. 166. Effect of order
  191. 167. Extortionate credit transactions
  192. 168. Obligation under contracts
  193. 169. Continuance of proceedings on death of bankrupt
  194. 170. Administration of estate of deceased bankrupt
  195. 171. Proof of debt
  196. 172. Proof of debt by secured creditors
  197. 173. Mutual credit and set-off
  198. 174. Distribution of interim dividend
  199. 175. Distribution of property
  200. 176. Final dividend
  201. 177. Claims of creditors
  202. 178. Priority of payment of debts
  203. 179. Adjudicating authority for individuals and partnership firms
  204. 180. Civil court not to have jurisdiction
  205. 181. Appeal to Debt Recovery Appellate Tribunal
  206. 182. Appeal to Supreme Court
  207. 183. Expeditious disposal of applications
  208. 184. Punishment for false information, etc., by creditor in insolvency resolution process
  209. 185. Punishment for contravention of provisions
  210. 186. Punishment for false information, concealment, etc., by bankrupt
  211. 187. Punishment for certain actions
  212. 188. Establishment and incorporation of Board
  213. 189. Constitution of Board
  214. 190. Removal of member from office
  215. 191. Powers of Chairperson
  216. 192. Meetings of Board
  217. 193. Member not to participate in meetings in certain cases
  218. 194. Vacancies, etc., not to invalidate proceedings of Board, Officers and employees of Board
  219. 195. Power to designate financial sector regulator
  220. 196. Powers and functions of Board
  221. 197. Constitution of advisory committee, executive committee or other committee
  222. 198. Condonation of delay
  223. 199. No person to function as insolvency professional agency without valid certificate of registration
  224. 200. Principles governing registration of insolvency professional agency
  225. 201. Registration of insolvency professional agency
  226. 202. Appeal to National Company Law Appellate Tribunal
  227. 203. Governing Board of insolvency professional agency
  228. 204. Functions of insolvency professional agencies
  229. 205. Insolvency professional agencies to make bye-laws
  230. 206. Enrolled and registered persons to act as insolvency professionals
  231. 207. Registration of insolvency professionals
  232. 208. Functions and obligations of insolvency professionals
  233. 209. No person to function as information utility without certificate of registration
  234. 210. Registration of information utility
  235. 211. Appeal to National Company Law Appellate Tribunal
  236. 212. Governing Board of information utility
  237. 213. Core services, etc., of information utilities
  238. 214. Obligation of information utility
  239. 215. Submission and authentication of financial information to information utilities
  240. 216. Rights and obligations of persons submitting financial information
  241. 217. Complaints against service providers
  242. 218. Investigation of service providers
  243. 219. Show cause notice to service provider
  244. 220. Appointment of disciplinary committee
  245. 221. Grants by Central Government
  246. 222. Board’s Fund
  247. 223. Accounts and audit
  248. 224. Insolvency and Bankruptcy Fund
  249. 225. Power of Central Government to issue directions
  250. 226. Power of Central Government to supersede Board
  251. 227. Power of Central Government to notify financial service providers, etc.
  252. 228. Budget
  253. 229. Annual report
  254. 230. Delegation
  255. 231. Bar of jurisdiction
  256. 232. Members, officers and employees of Board to the public servants
  257. 233. Protection of action taken in good faith
  258. 234. Agreements with foreign countries
  259. 235. Letter of request to a country outside India in certain cases
  260. 235A. Power of Adjudicating Authority to impose penalties
  261. 236. Trial of offences by Special Court
  262. 237. Appeal and revision
  263. 238. Provisions of this Code to override other laws
  264. 238A. Limitation
  265. 239. Power to make rules
  266. 240. Power to make regulations
  267. 240A. Application of this Code to micro, small and medium enterprises
  268. 241. Rules and regulations to be laid before Parliament
  269. 242. Power to remove difficulties
  270. 243. Repeal of certain enactments and savings
  271. 244. Transitional provisions
  272. 245. Amendments of Act 9 of 1932
  273. 246. Amendments of Act 1 of 1944
  274. 247. Amendments of Act 43 of 1961
  275. 248. Amendments of Act 52 of 1962
  276. 249. Amendments of Act 51 of 1993
  277. 250. Amendments of Act 32 of 1994
  278. 251. Amendments of Act 54 of 2002
  279. 252. Amendments of Act 1 of 2004
  280. 253. Amendments of Act 51 of 2007
  281. 254. Amendments of Act 6 of 2009
  282. 255. Amendments of Act 18 of 2013

PDF: pending for this language.