Voluntary liquidation of corporate persons
Section 59 of the Insolvency and Bankruptcy Code, 2016 deals with voluntary liquidation of corporate persons. A corporate person who intends to liquidate itself voluntarily and has not committed any default may initiate voluntary liquidation proceedings under the provisions of this Chapter. The Act was enacted on 28 May 2016.
(1) A corporate person who intends to liquidate itself voluntarily and has not committed any default may initiate voluntary liquidation proceedings under the provisions of this Chapter.
(2) The voluntary liquidation of a corporate person under sub-section (1) shall meet such conditions and procedural requirements as may be specified by the Board.
(3) Without prejudice to sub-section (2), voluntary liquidation proceedings of a corporate person registered as a company shall meet the following conditions, namely:—
(a) a declaration from majority of the directors of the company verified by an affidavit stating that—
(i) they have made a full inquiry into the affairs of the company and they have formed an opinion that either the company has no debt or that it will be able to pay its debts in full from the proceeds of assets to be sold in the voluntary liquidation; and
(ii) the company is not being liquidated to defraud any person;
(b) the declaration under sub-clause (a) shall be accompanied with the following documents, namely:—
(i) audited financial statements and record of business operations of the company for the previous two years or for the period since its incorporation, whichever is later;
(ii) a report of the valuation of the assets of the company, if any prepared by a registered valuer;
(c) within four weeks of a declaration under sub-clause (a), there shall be—
(i) a special resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily and appointing an insolvency professional to act as the liquidator; or
(ii) a resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily as a result of expiry of the period of its duration, if any, fixed by its articles or on the occurrence of any event in respect of which the articles provide that the company shall be dissolved, as the case may be and appointing an insolvency professional to act as the liquidator:
Provided that the company owes any debt to any person, creditors representing two-thirds in value of the debt of the company shall approve the resolution passed under sub-clause (c) within seven days of such resolution.
(4) The company shall notify the Registrar of Companies and the Board about the resolution under sub-section (3) to liquidate the company within seven days of such resolution or the subsequent approval by the creditors, as the case may be.
(5) Subject to approval of the creditors under sub-section (3), the voluntary liquidation proceedings in respect of a company shall be deemed to have commenced from the date of passing of the resolution under sub-clause (c) of sub-section (3).
(6) The provisions of sections 35 to 53 of Chapter III and Chapter VII shall apply to voluntary liquidation proceedings for corporate persons with such modifications as may be necessary.
(7) Where the affairs of the corporate person have been completely wound up, and its assets completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of such corporate person.
(8) The Adjudicating Authority shall on an application filed by the liquidator under sub-section (7), pass an order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly
(9) A copy of an order under sub-section (8) shall within fourteen days from the date of such order, be forwarded to the authority with which the corporate person is registered.
Section 59, 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
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.
-
Amrish Gandhi The Voluntary Liquidator of M/s. ASHUTOSH COTTON AND OIL MILL PRIVATE LIMITED vs NA
Court's Decision & Legal Precedent
When a corporate person undergoing voluntary liquidation has completed all mandatory compliances under Section 59 of the Insolvency and Bankruptcy Code 2016 and IBBI (Voluntary Liquidation Process) Regulations 2017, including proper Board and shareholder approvals, Declaration of Solvency, public announcements, preliminary and final reports, Income Tax clearance, and complete liquidation of assets with distribution to stakeholders, the NCLT has the power and duty under Section 59(8) to order the dissolution of the corporate person.
On this section: Requirement for Board meeting approving voluntary liquidation and notice for Extraordinary General Meeting
-
Jubilant Innovation (India) Limited - in Voluntary Liquidation vs NA
Court's Decision & Legal Precedent
When a company has ceased business operations, has no employees, has no creditors, and has complied with all statutory requirements under Section 59 of the Insolvency and Bankruptcy Code, 2016 and the IBBI (Voluntary Liquidation Process) Regulations, 2017 including proper publication of notices, submission of preliminary and final reports, and distribution of remaining assets to shareholders, the tribunal shall approve the voluntary liquidation and grant dissolution of the company with effect from the date of the order.
On this section: Provides the jurisdiction and power of the tribunal to approve voluntary liquidation and dissolution of companies
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.
-
… A mere perusal of the above observations of the Hon'ble Supreme Court in the decisions cited supra, shows that the liability in respect of a claim arising out of a recovery certificate issued by the DRT would be considered as "financial debt" within the ambit of Section 59(8) of Insolvency and Bankruptcy Code, 2016. It has also held that the underlying claim of the Bank/Claimant under the lending documents would have to be categorised as a "financial debt" under Insolvency and Bankruptcy Code, 2016. Therefore, a recovery certificate issued in respect of the same claim, which is …
Made under this section, and citing it
2 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Another 4 instruments name this provision in its title or its text without being made under it.
- Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2022Regulation 2022
- Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2022Regulation 2022
- IBBI (Voluntary Liquidation Process) (Second Amendment) Regulations, 2020Regulation 2020
- Insolvency and Bankruptcy (Insolvency and Bankruptcy Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 dated 15.11.2019Rule 2019
Questions about Section 59
What have the courts held on Section 59 of the Insolvency and Bankruptcy Code?
Amrish Gandhi The Voluntary Liquidator of M/s. ASHUTOSH COTTON AND OIL MILL PRIVATE LIMITED vs NA (09 Nov 2023) is the leading judgment on this section among those set out below: Requirement for Board meeting approving voluntary liquidation and notice for Extraordinary General Meeting. Another 1 judgment on this section is set out below. They run from 2021 to 2023.
How do I find court cases under Section 59 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 59, section 59 Insolvency and Bankruptcy Code, section 59 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. 2 reported judgments on this section are set out on this page, beginning with Amrish Gandhi The Voluntary Liquidator of M/s. ASHUTOSH COTTON AND OIL MILL PRIVATE LIMITED vs NA (09 Nov 2023).
What should I read with Section 59 of the Insolvency and Bankruptcy Code, and has it changed?
Its own text turns on section 35 (Powers and duties of liquidator), section 53 (Distribution of assets), so none of them can safely be read on its own. 3 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 2: most recently Commencement of Section for Voluntary Liquidation (S-59) and Information Utilities (209-2016) And S-234, 235 (Agreement with foreign Countries) under IBC, 2016 (2017), then Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 (2017).
When was Section 59 of the Insolvency and Bankruptcy Code enacted?
Section 59 of the Insolvency and Bankruptcy Code, cited as Insolvency and Bankruptcy Code 59, 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.