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IndiaCode Laws
Act31
Enacted 2016

The Insolvency and Bankruptcy Code, 2016

In force 282 sections Corporate Affairs

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.

Act 31 of 2016 Enacted 28 May 2016

Administered by. Ministry of Corporate Affairs · Other Acts of 2016

Preamble

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:---

What this Act covers

Summary of the Insolvency and Bankruptcy Code, 2016 (IBC)

Overview

*Act Name: Insolvency and Bankruptcy Code, 2016

*Coverage: Corporate Persons, Individuals, and Partnership Firms

Key Components

1. Initiation of Insolvency Process

• Initiators: Financial Creditors (Section 7), Operational Creditors (Section 8), and Corporate Applicants (Section 10)

• Outcome: Appointment of Interim Resolution Professional and Public Announcement (Section 13)

2. Moratorium

• Provisions (Sections 13-14):

• Halt on legal proceedings against the corporate debtor

• Restriction on asset transfer or encumbrance by the corporate debtor

• Exceptions for critical supply of goods/services and notified transactions

• Duration: From insolvency commencement date until process completion, approval of resolution plan, or liquidation order (Section 15)

3. Resolution Process Governance

• Resolution Professional’s Role (Sections 16-18): Management of debtor’s business, asset valuation, and facilitation of resolution plan

• Timeline (Section 12): 180 days for resolution, extendable

• Oversight: By the Insolvency and Bankruptcy Board of India (IBBI)

4. Liquidation

• Trigger: Failure of resolution process or direct order (Section 33)

• Liquidator’s Role: Asset realization and distribution according to IBC hierarchy

5. Distribution Hierarchy

• Priority Order (Inferred, not directly provided): Secured Creditors, Operational Creditors, etc., guided by principles akin to Section 60 for insolvency resolution

Sections

Type to filter. 282 sections.

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

Legislative history

"Legislative History:The Insolvency and Bankruptcy Code, 2016 Short Title - The Insolvency and Bankruptcy Code, 2016Act Number / Year - Act No. 31 of 2016India Code Act ID - 201631Introduced In - Parliament Lok Sabha Presidential Assent Date - May 28, 2016Official Gazette Publication - May 28, 2016 (Extraordinary Gazette Part II, Section 1)Enforcement Date - 5th August, 2016Nodal Ministry - Ministry of Corporate Affairs Precedent & Statutory Rationale1. Consolidation of Fragmented Insolvency Frameworks:o Prior to 2016, insolvency and debt recovery were governed by overlapping, disparate statutes (such as SICA, SARFAESI, and winding-up under Companies Act), resulting in parallel judicial proceedings, multi-year delays, and severe value erosion for creditors.2. Shift to ""Creditor-in-Control"" Model & Time-Bound Resolution:o Replaced the outdated debtor-in-possession regime with a creditor-driven resolution process (CIRP). The Code instituted a mandatory time-bound matrix (180 days, extendable up to 330 days including litigation) to resolve distressed assets or proceed to liquidation. 3. Establishment of Dedicated Ecosystem and Regulators:o Created a specialized multi-pillar institutional architecture comprising the Insolvency and Bankruptcy Board of India (IBBI) as the regulator, Insolvency Professionals (IPs), Information Utilities (IUs), and dedicated adjudicating authorities (NCLT for corporates/LLPs and DRT for individuals/partnerships). Parliamentary Trajectory & Enactment• Formulation: Developed based on the Bankruptcy Law Reforms Committee (BLRC) report chaired by Dr. T. K. Viswanathan, and introduced by Finance Minister Arun Jaitley.• Parliamentary Passage: Introduced in the Lok Sabha on December 21, 2015; referred to a Joint Parliamentary Committee (JPC), which submitted its report on April 28, 2016. Passed by the Lok Sabha on May 5, 2016, and subsequently passed by the Rajya Sabha on May 11, 2016. • Presidential Assent: Received formal Presidential Assent on May 28, 2016, entering the statute book as Act No. 31 of 2016. Source: India Code Official Repository (indiacode.nic.in) and Ministry of Corporate Affairs / Ministry of Finance Official Records "

Schedules

This Act has 12 schedules. A schedule is published as a document of its own; the text is reproduced on its page where it has been read, and the document is mirrored here either way.

Rules made under this Act

40 sets of Rules. India Code publishes Rules as a record and a document rather than as text, so these are indexed here and not reproduced. All Rules.

  • IBBI (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 20242024
  • Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 20242024
  • Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 20242024
  • Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 20242024
  • Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 20242024
  • Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 20242024
  • Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 20242024
  • Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 20232023
  • Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 20232023
  • Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 20232023
  • Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 20232023
  • nsolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2022023
  • Insolvency and Bankruptcy Board of India (Employees’ Service) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Engagement of Research Associates and Consultants) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Professional Agencies) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Fourth Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Third Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Inspection and Investigation) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Second Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 20222022
  • Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 20222022
  • nsolvency and Bankruptcy Board of India (Information Utilities) (Amendment) Regulations, 20222022
  • nsolvency and Bankruptcy Board of India (Information Utilities) (Second Amendment) Regulations, 20222022
  • IBBI (Liquidation Process) (Amendment) Regulations, 20212021
  • IBBI (Model Bye- Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 20212021
  • IBBI (Pre-packaged Insolvency Resolution Process) Regulations, 20212021
  • Insolvency and Bankruptcy Board of India (Information Utilities) (Amendment) Regulations, 20212021
  • Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 20212021
  • Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 20212021

Related Acts

Ordinances

India Code records no parent Act for an ordinance, so these are tied to this Act by their own titles and their dates rather than by anything the source states. An ordinance is made when Parliament is not sitting and lapses six weeks into the next session unless it is enacted.

  • The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021amended this Act · 2021
  • The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020.amended this Act · 2020
  • The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019amended this Act · 2019
  • The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018amended this Act · 2018
  • The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017amended this Act · 2017

All Ordinances

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Every one of the 282 sections of this Act has its own page. This page is not a substitute for legal advice.