Initiation of liquidation
Section 33 of the Insolvency and Bankruptcy Code, 2016 deals with initiation of liquidation. Where the Adjudicating Authority,-- (a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case The Act was enacted on 28 May 2016.
(1) Where the Adjudicating Authority,--
(a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; or
(b) rejects the resolution plan under section 31 for the non-compliance of the requirements specified therein, it shall--
(i) pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter;
(ii) issue a public announcement stating that the corporate debtor is in liquidation; and
(iii) require such order to be sent to the authority with which the corporate debtor is registered.
(2) Where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors 1[approved by not less than sixty-six per cent. of the voting share] to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).
2[Explanation.-- For the purposes of this sub-section, it is hereby declared that the committee of creditors may take the decision to liquidate the corporate debtor, any time after its constitution under sub-section (1) of section 21 and before the confirmation of the resolution plan, including at any time before the preparation of the information memorandum.]
(3) Where the resolution plan approved by the Adjudicating Authority 3[under section 31 or under sub-section (1) of section 54L,]is contravened by the concerned corporate debtor, any person other than the corporate debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).
(4) On receipt of an application under sub-section (3), if the Adjudicating Authority determines that the corporate debtor has contravened the provisions of the resolution plan, it shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).
(5) Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor:
Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority.
(6) The provisions of sub-section (5) shall not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
(7) The order for liquidation under this section shall be deemed to be a notice of discharge to the officers, employees and workmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation process by the liquidator.
Section 33, The Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
- s. 12 Time-limit for completion of insolvency resolution process
- s. 21 Committee of creditors
- s. 30 Submission of resolution plan
- s. 31 Approval of resolution plan
- s. 52 Secured creditor in liquidation proceedings
- s. 54L Approval of resolution plan
- s. 56 Time period for completion of fast track corporate insolvency resolution process
Referred to by 7
- s. 5 Definitions
- s. 14 Moratorium
- s. 34 Appointment of liquidator and fee to be paid
- s. 54A Corporate debtors eligible for pre-packaged insolvency resolution process
- s. 54L Approval of resolution plan
- s. 54N Termination of pre-packaged insolvency resolution process
- s. 61 Appeals and Appellate Authority
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Sundaresh Bhatt vs Central Board of Indirect Taxes and Customs
Court's Decision & Legal Precedent
Once moratorium is imposed under Sections 14 or 33(5) of the Insolvency and Bankruptcy Code, 2016, the Customs authority has only limited jurisdiction to assess and determine the quantum of customs duty and other levies. The Customs authority does not have the power to initiate recovery of dues by means of sale or confiscation as provided under the Customs Act. After such assessment, the Customs authority must submit its claims in accordance with the procedure laid down in the IBC and in strict compliance with prescribed time periods before the adjudicating authority. The Insolvency and Bankruptcy Code overrides the Customs Act to this extent, and the Liquidator can immediately secure goods from the Customs authority to be dealt with appropriately under the IBC. Additionally, the Liquidator has discretion in choosing the mode of sale of corporate assets (auction or private contract), and no vested right accrues to any bidder merely by participation in a bidding process; the Liquidator's commercial decisions regarding asset sales are not subject to judicial review.
On this section: Moratorium continues during liquidation; no suit or legal proceeding can be instituted by or against Corporate Debtor except by Liquidator with prior approval
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Madhav Saran Agarwal vs Msx Mall Pvt. LTD
Court's Decision & Legal Precedent
Section 138/141 proceedings under the Negotiable Instruments Act against a corporate debtor are covered by the moratorium provision in Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016, as such proceedings relate to transactions evidencing debt of the corporate debtor and result in depletion of its assets through compensation orders, thereby directly impacting the object of the moratorium which is to preserve the corporate debtor's assets during the insolvency resolution process so it can continue as a going concern and be rehabilitated. However, the moratorium applies only to the corporate debtor and not to natural persons (Directors/officers) in charge of and responsible for the conduct of the business of the corporate debtor, who remain liable to prosecution under Section 138/141 as the corporate debtor is a necessary party to such proceedings.
On this section: Examined to show that expression 'other legal proceeding' must be construed widely to include all proceedings affecting corporate debtor's assets
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Naresh Kumar Gupta vs Sood Resins and Polymers
Court's Decision & Legal Precedent
Section 138/141 proceedings under the Negotiable Instruments Act against a corporate debtor are covered by the moratorium provision in Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016, as such proceedings are 'proceedings' within the meaning of that section. The moratorium applies only to the corporate debtor and not to natural persons (Directors and officers) who can continue to be prosecuted under Section 141 of the Negotiable Instruments Act. The rules of statutory construction (noscitur a sociis and ejusdem generis) cannot be applied to restrict the meaning of 'proceedings' in Section 14(1)(a) when the expression is designedly wide and the object of the statute is clear - which is to preserve the corporate debtor's assets during the insolvency resolution process.
On this section: Compared with Section 14 to show that 'proceedings' should be interpreted widely
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R. K. Industries (unit-ii) LLP vs Hr Commercials Private Limited
Court's Decision & Legal Precedent
Once a Liquidator, acting in consultation with stakeholders and with the permission of the Adjudicating Authority, decides to abandon an ongoing bidding process and opt for a private sale when a higher offer emerges that better serves the objective of maximizing asset value and expediting the liquidation process, such commercial decision is not amenable to judicial review by the Appellate Authority absent proof of mala fides or arbitrariness. The Liquidator's discretion to select the mode of sale and to change the sale strategy is protected by the express terms of the bidding documents and the provisions of the IBC, and no vested right accrues to a bidder merely by virtue of being selected as an Anchor Bidder in a Swiss Challenge Process.
On this section: Initiation of liquidation process and circumstances triggering liquidation
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… The Resolution Plan was approved by the NCLT on 15 May 2019. The NCLT was thereafter moved on the ground that the Resolution Plan had not been implemented by the appellant. Hence an application was filed under Section 33 of the Insolvency and Bankruptcy Code 2016 seeking liquidation of the Corporate Debtor. This was allowed by the NCLT by its order dated 16 January 2020. - 4 After the appellant filed an appeal before the NCLAT on 3 February 2020, an opportunity was granted to them to file an affidavit indicating the time frame for …
Made under this section, and citing it
5 instruments name this provision in its title or its text without being made under it.
- Commencement of section 33 to 54 (both inclusive) under the CodeNotification 2016
- Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2022Regulation 2022
- Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2022Regulation 2022
- Insolvency and Bankruptcy (Insolvency and Bankruptcy Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 dated 15.11.2019Rule 2019
- The Insolvency and Bankruptcy Code (Amendment) Act, 2019Statute 2019
Questions about Section 33
What have the courts held on Section 33 of the Insolvency and Bankruptcy Code?
Sundaresh Bhatt vs Central Board of Indirect Taxes and Customs (26 Aug 2022) is the leading judgment on this section among those set out below: Moratorium continues during liquidation; no suit or legal proceeding can be instituted by or against Corporate Debtor except by Liquidator with prior approval. Another 3 judgments on this section are set out below, all of them from the Supreme Court. They run from 2021 to 2022.
How do I find court cases under Section 33 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 33, section 33 Insolvency and Bankruptcy Code, section 33 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. 4 reported judgments on this section are set out on this page, beginning with Sundaresh Bhatt vs Central Board of Indirect Taxes and Customs (26 Aug 2022).
What should I read with Section 33 of the Insolvency and Bankruptcy Code, and has it changed?
Its own text turns on section 12 (Time-limit for completion of insolvency resolution process), section 21 (Committee of creditors), section 30 (Submission of resolution plan), section 31 (Approval of resolution plan), and on 3 further provisions, so none of them can safely be read on its own. 7 other provisions in this corpus refer back to it. 5 instruments name it without being made under it, most recently Commencement of section 33 to 54 (both inclusive) under the Code (2016), then Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2022 (2022).
When was Section 33 of the Insolvency and Bankruptcy Code enacted?
Section 33 of the Insolvency and Bankruptcy Code, commonly called liquidation, and cited as Insolvency and Bankruptcy Code 33, was enacted on 28 May 2016 as Act 31 of 2016. It is in force as at the date shown on this page.
Other sections of this Act
- 240. Power to make regulations2349 words
- 5. Definitions2326 words
- 3. Definitions1381 words
- 29A. Person not eligible to be resolution applicant1152 words
- 239. Power to make rules963 words
- 196. Powers and functions of Board942 words
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 15 Oct 2026. This page is not a substitute for legal advice.