Mutual credit and set-off
Section 173 of the Insolvency and Bankruptcy Code, 2016 deals with mutual credit and set-off. Where before the bankruptcy commencement date, there have been mutual dealings between the bankrupt and any creditor, the bankruptcy trustee shall— (a) take an account of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set-off again The Act was enacted on 28 May 2016.
(1) Where before the bankruptcy commencement date, there have been mutual dealings between the bankrupt and any creditor, the bankruptcy trustee shall—
(a) take an account of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set-off against the sums due from the other; and
(b) only the balance shall be provable as a bankruptcy debt or as the amount payable to the bankruptcy trustee as part of the estate of the bankrupt.
(2) Sums due from the bankrupt to another party shall not be included in the account taken by the bankruptcy trustee under sub-section (1), if that other party had notice at the time they became due that an application for bankruptcy relating to the bankrupt was pending.
Section 173, The Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016).
Questions about Section 173
What does Section 173 of the Insolvency and Bankruptcy Code deal with?
Section 173 of the Insolvency and Bankruptcy Code is headed "Mutual credit and set-off". Where before the bankruptcy commencement date, there have been mutual dealings between the bankrupt and any creditor, the bankruptcy trustee shall— (a) take an account of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set-off again
How do I find court cases under Section 173 of the Insolvency and Bankruptcy Code?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Insolvency and Bankruptcy Code 173, section 173 Insolvency and Bankruptcy Code, section 173 of the Insolvency and Bankruptcy Code. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.
When was Section 173 of the Insolvency and Bankruptcy Code enacted?
Section 173 of the Insolvency and Bankruptcy Code, cited as Insolvency and Bankruptcy Code 173, was enacted on 28 May 2016 as Act 31 of 2016. It is in force as at the date shown on this page.
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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. Text as in force on 21 Oct 2026. This page is not a substitute for legal advice.