Insolvency and Bankruptcy Code, 2016 (IBC)

THE INSOLVENCY AND BANKRUPTCY CODE, 2016, ACT NO. 31 OF 2016, 28th May, 2016.

An Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Sixty-seventh Year of the Republic of India as follows:—

Download PDF for Insolvency and Bankruptcy Code, 2016 (IBC)

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