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Insolvency and Bankruptcy Code, 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.

Sector All SectorsPurpose Corporate & CommercialAct No. 31 of 2016Enacted 28 May 2016Ministry Corporate AffairsUpdated till 2nd July, 2026
All Acts Indian Partnership Act, 1932 Limited Liability Partnership Act, 2008

TaxByKK · Laws by Sector · taxbykk.comIndex as on 2nd July, 2026

Index of provisions · 23 chapters, 283 sections

Part I PreliminaryPart III PreliminaryII Corporate Insolvency Resolution ProcessIII Liquidation ProcessIIIA Pre-packaged Insolvency Resolution ProcessV Voluntary Liquidation of Corporate PersonsVI Adjudicating Authority for Corporate PersonsVII Offences and PenaltiesPart IIII PreliminaryII Fresh Start ProcessIII Insolvency Resolution ProcessIV Bankruptcy Order for Individuals and Partnership FirmsV Administration and Distribution of the Estate of the BankruptVI Adjudicating Authority for Individuals and Partnership FirmsVII Offences and PenaltiesPart IVI The Insolvency and Bankruptcy Board of IndiaII Powers and Functions of the BoardIII Insolvency Professional AgenciesIV Insolvency ProfessionalsV Information UtilitiesVI Inspection and InvestigationVII Finance, Accounts and AuditPart V Miscellaneous

Part I – Preliminary

Part I Preliminary3 sections

  1. 1Short title, extent and commencement
  2. 2Application
  3. 3Definitions

Part II – Insolvency Resolution and Liquidation for Corporate Persons

Chapter I Preliminary2 sections

  1. 4Application of this Part
  2. 5Definitions

Chapter II Corporate Insolvency Resolution Process34 sections

  1. 6Persons who may initiate corporate insolvency resolution process
  2. 7Initiation of corporate insolvency resolution process by financial creditor
  3. 8Insolvency resolution by operational creditor
  4. 9Application for initiation of corporate insolvency resolution process by operational creditor
  5. 10Initiation of corporate insolvency resolution process by corporate applicant
  6. 10ASuspension of initiation of corporate insolvency resolution process
  7. 11Persons not entitled to make application
  8. 11ADisposal of applications under section 54C and under section 7 or section 9 or section 10
  9. 12Time-limit for completion of insolvency resolution process
  10. 12AWithdrawal of application admitted under section 7, 9 or 10
  11. 13Declaration of moratorium and public announcement
  12. 14Moratorium
  13. 15Public announcement of corporate insolvency resolution process
  14. 16Appointment and tenure of interim resolution professional
  15. 17Management of affairs of corporate debtor by interim resolution professional
  16. 18Duties of interim resolution professional
  17. 19Persons to extend co-operation to interim resolution professional
  18. 20Management of operations of corporate debtor as going concern
  19. 21Committee of creditors
  20. 22Appointment of resolution professional
  21. 23Resolution professional to conduct corporate insolvency resolution process
  22. 24Meeting of committee of creditors
  23. 25Duties of resolution professional
  24. 25ARights and duties of authorised representative of financial creditors
  25. 26Application in respect of certain transactions or trading not to affect processes
  26. 27Replacement of resolution professional by committee of creditors
  27. 28Approval of committee of creditors for certain actions
  28. 28ATransfer of assets of guarantor of corporate debtor during process
  29. 29Preparation of information memorandum
  30. 29APerson not eligible to be resolution applicant
  31. 30Submission of resolution plan
  32. 31Approval of resolution plan
  33. 32Appeal
  34. 32ALiability for prior offences, etc

Chapter III Liquidation Process23 sections

  1. 33Initiation of liquidation
  2. 34Appointment of liquidator and fee to be paid
  3. 34AReplacement of liquidator by committee of creditors
  4. 35Powers and duties of liquidator
  5. 36Liquidation estate
  6. 37Powers of liquidator to access information
  7. 38Omitted
  8. 39Omitted
  9. 40Omitted
  10. 41Omitted
  11. 42Omitted
  12. 43Preferential transactions and relevant time
  13. 44Orders in case of preferential transactions
  14. 45Avoidance of undervalued transactions
  15. 46Relevant period for undervalued transactions
  16. 47Application by creditors, member or partner in cases of certain transactions or trading
  17. 48Order in cases of undervalued transactions
  18. 49Transactions defrauding creditors
  19. 50Extortionate credit transactions
  20. 51Orders of Adjudicating Authority in respect of extortionate credit transactions
  21. 52Secured creditor in liquidation proceedings
  22. 53Distribution of assets
  23. 54Dissolution of corporate debtor

Chapter IIIA Pre-packaged Insolvency Resolution Process16 sections

  1. 54ACorporate debtors eligible for pre-packaged insolvency resolution process
  2. 54BDuties of insolvency professional before initiation of pre-packaged insolvency resolution process
  3. 54CApplication to initiate pre-packaged insolvency resolution process
  4. 54DTime-limit for completion of pre-packaged insolvency resolution process
  5. 54EDeclaration of moratorium and public announcement during pre-packaged insolvency resolution process
  6. 54FDuties and powers of resolution professional during pre-packaged insolvency resolution process
  7. 54GList of claims and preliminary information memorandum
  8. 54HManagement of affairs of corporate debtor.
  9. 54-ICommittee of creditors
  10. 54JVesting management of corporate debtor with resolution professional
  11. 54KConsideration and approval of resolution plan
  12. 54LApproval of resolution plan
  13. 54MAppeal against order under section 54L
  14. 54NTermination of pre-packaged insolvency resolution process.
  15. 54-OInitiation of corporate insolvency resolution process
  16. 54PApplication of provisions of Chapters II, III, VI and VII to this Chapter

Chapter V Voluntary Liquidation of Corporate Persons1 section

  1. 59Voluntary liquidation of corporate persons

Chapter VI Adjudicating Authority for Corporate Persons10 sections

  1. 60Adjudicating Authority for corporate persons
  2. 61Appeals and Appellate Authority
  3. 62Appeal to Supreme Court
  4. 63Civil court not to have jurisdiction
  5. 64Expeditious disposal of applications
  6. 64APeralty for initiating frivolous or vexatious proceedings under Part II
  7. 65Fraudulent or malicious initiation of proceedings
  8. 66Fraudulent or wrongful trading
  9. 67Proceedings under section 66
  10. 67AFraudulent management of corporate debtor during pre-packaged insolvency resolution process

Chapter VII Offences and Penalties11 sections

  1. 68Punishment for concealment of property
  2. 69Punishment for transactions defrauding creditors
  3. 70Punishment for misconduct in course of corporate insolvency resolution process
  4. 71Punishment for falsification of books of corporate debtor
  5. 72Punishment for wilful and material omissions from statements relating to affairs of corporate debtor
  6. 73Punishment for false representations to creditors
  7. 74Omitted
  8. 75Punishment for false information furnished in application
  9. 76Omitted
  10. 77Punishment for providing false information in application made by corporate debtor
  11. 77APunishment for offences related to pre-packaged insolvency resolution process

Part III – Insolvency Resolution and Bankruptcy for Individuals and Partnership Firms

Chapter I Preliminary2 sections

  1. 78Application
  2. 79Definitions

Chapter II Fresh Start Process14 sections

  1. 80Eligibility for making an application
  2. 81Application for fresh start order
  3. 82Appointment of resolution professional
  4. 83Examination of application by resolution professional
  5. 84Admission or rejection of application by Adjudicating Authority
  6. 85Effect of admission of application
  7. 86Objections by creditor and their examination by resolution professional
  8. 87Application against decision of resolution professional
  9. 88General duties of debtor
  10. 89Replacement of resolution professional
  11. 90Directions for compliances of restrictions, etc
  12. 91Revocation of order admitting application
  13. 92Discharge order
  14. 93Standard of conduct

Chapter III Insolvency Resolution Process27 sections

  1. 94Application by debtor to initiate insolvency resolution process
  2. 95Application by creditor to initiate insolvency resolution process
  3. 96Interim moratorium
  4. 97Appointment of resolution professional
  5. 98Replacement of resolution professional
  6. 99Submission of report by resolution professional
  7. 100Admission or rejection of application
  8. 101Moratorium
  9. 102Public notice and claims from creditors
  10. 103Registering of claims by creditors
  11. 104Preparation of list of creditors
  12. 105Repayment plan
  13. 106Report of resolution professional on repayment plan
  14. 107Summoning of meeting of creditors
  15. 108Conduct of meeting of creditors
  16. 109Voting rights in meeting of creditors
  17. 110Rights of secured creditors in relation to repayment plan
  18. 111Approval of repayment plan by creditors
  19. 112Report of meeting of creditors on repayment plan
  20. 113Notice of decisions taken at meeting of creditors
  21. 114Order of Adjudicating Authority on repayment plan
  22. 115Effect of order of Adjudicating Authority on repayment plan
  23. 116Implementation and supervision of repayment plan
  24. 117Completion of repayment plan
  25. 118Repayment plan coming to end prematurely
  26. 119Discharge order
  27. 120Standard of conduct

Chapter IV Bankruptcy Order for Individuals and Partnership Firms28 sections

  1. 121Application for bankruptcy
  2. 122Application by debtor
  3. 123Application by creditor
  4. 124Effect of application
  5. 125Appointment of insolvency professional as bankruptcy trustee
  6. 126Bankruptcy order
  7. 127Validity of bankruptcy order
  8. 128Effect of bankruptcy order
  9. 129Statement of financial position
  10. 130Public notice inviting claims from creditors
  11. 131Registration of claims
  12. 132Preparation of list of creditors
  13. 133Summoning of meeting of creditors
  14. 134Conduct of meeting of creditors
  15. 135Voting rights of creditors
  16. 136Administration and distribution of estate of bankruptcy
  17. 137Completion of administration
  18. 138Discharge order
  19. 139Effect of discharge
  20. 140Disqualification of bankrupt
  21. 141Restrictions on bankrupt
  22. 142Modification or recall of bankruptcy order
  23. 143Standard of conduct
  24. 144Fees of bankruptcy trustee
  25. 145Replacement of bankruptcy trustee
  26. 146Resignation by bankruptcy trustee
  27. 147Vacancy in office of bankruptcy trustee
  28. 148Release of bankruptcy trustee

Chapter V Administration and Distribution of the Estate of the Bankrupt31 sections

  1. 149Functions of bankruptcy trustee
  2. 150Duties of bankrupt towards bankruptcy trustee
  3. 151Rights of bankruptcy trustee
  4. 152General powers of bankruptcy trustee
  5. 153Approval of creditors for certain acts
  6. 154Vesting of estate of bankrupt in bankruptcy trustee
  7. 155Estate of bankrupt
  8. 156Delivery of property and documents to bankruptcy trustee
  9. 157Acquisition of control by bankruptcy trustee
  10. 158Restrictions on disposition of property
  11. 159After-acquired property of bankrupt
  12. 160Onerous property of bankrupt
  13. 161Notice to disclaim onerous property
  14. 162Disclaimer of leaseholds
  15. 163Challenge against disclaimed property
  16. 164Undervalued transactions
  17. 164ATransactions defrauding creditors
  18. 165Preference transactions
  19. 166Effect of order
  20. 167Extortionate credit transactions
  21. 168Obligations under contracts
  22. 169Continuance of proceedings on death of bankrupt
  23. 170Administration of estate of deceased bankrupt
  24. 171Proof of debt
  25. 172Proof of debt by secured creditors
  26. 173Mutual credit and set-off
  27. 174Distribution of interim dividend
  28. 175Distribution of property
  29. 176Final dividend
  30. 177Claims of creditors
  31. 178Priority of payment of debts

Chapter VI Adjudicating Authority for Individuals and Partnership Firms6 sections

  1. 179Adjudicating authority for individuals and partnership firms
  2. 180Civil court not to have jurisdiction
  3. 181Appeal to Debt Recovery Appellate Tribunal
  4. 182Appeal to Supreme Court
  5. 183Expeditious disposal of applications
  6. 183APenalty for initiating frivolous or vexatious proceeding under Part III

Chapter VII Offences and Penalties4 sections

  1. 184Punishment for false information, etc., by creditor in insolvency resolution process
  2. 185Punishment for contravention of provisions
  3. 186Punishment for false information, concealment, etc., by bankrupt
  4. 187Punishment for certain actions

Part IV – Regulation of Insolvency Professionals, Agencies and Information Utilities

Chapter I The Insolvency and Bankruptcy Board of India8 sections

  1. 188Establishment and incorporation of Board
  2. 189Constitution of Board
  3. 190Removal of member from office
  4. 191Powers of Chairperson
  5. 192Meetings of Board
  6. 193Member not to participate in meetings in certain cases
  7. 194Vacancies, etc., not to invalidate proceedings of Board, Officers and employees of Board
  8. 195Power to designate financial sector regulator

Chapter II Powers and Functions of the Board3 sections

  1. 196Powers and functions of Board
  2. 197Constitution of advisory committee, executive committee or other committee
  3. 198Condonation of delay

Chapter III Insolvency Professional Agencies7 sections

  1. 199No person to function as insolvency professional agency without valid certificate of registration
  2. 200Principles governing registration of insolvency professional agency
  3. 201Registration of insolvency professional agency
  4. 202Appeal to National Company Law Appellate Tribunal
  5. 203Governing Board of insolvency professional agency
  6. 204Functions of insolvency professional agencies
  7. 205Insolvency professional agencies to make bye-laws

Chapter IV Insolvency Professionals3 sections

  1. 206Enrolled and registered persons to act as insolvency professionals
  2. 207Registration of insolvency professionals
  3. 208Functions and obligations of insolvency professionals

Chapter V Information Utilities8 sections

  1. 209No person to function as information utility without certificate of registration
  2. 210Registration of information utility
  3. 211Appeal to National Company Law Appellate Tribunal
  4. 212Governing Board of information utility
  5. 213Core services, etc., of information utilities
  6. 214Obligations of information utility
  7. 215Submission and authentication of financial information to information utilities
  8. 216Rights and obligations of persons submitting financial information

Chapter VI Inspection and Investigation4 sections

  1. 217Complaints against service providers
  2. 218Investigation of service providers
  3. 219Show cause notice to service provider
  4. 220Appointment of disciplinary committee

Chapter VII Finance, Accounts and Audit3 sections

  1. 221Grants by Central Government
  2. 222Board’s Fund
  3. 223Accounts and audit

Part V – Miscellaneous

Part V Miscellaneous35 sections

  1. 224Insolvency and Bankruptcy Fund
  2. 225Power of Central Government to issue directions
  3. 226Power of Central Government to supersede Board
  4. 227Power of Central Government to notify financial service providers, etc
  5. 228Budget
  6. 229Annual report
  7. 230Delegation
  8. 231Bar of jurisdiction
  9. 232Members, officers and employees of Board to the public servants
  10. 233Protection of action taken in good faith
  11. 234Agreements with foreign countries
  12. 235Letter of request to a country outside India in certain cases
  13. 235APower of Adjudicating Authority to impose penalties
  14. 236Trial of offences by Special Court
  15. 237Appeal and revision
  16. 238Provisions of this Code to override other laws
  17. 238ALimitation
  18. 239Power to make rules
  19. 240Power to make regulations
  20. 240AApplication of this Code to micro, small and medium enterprises
  21. 241Rules and regulations to be laid before Parliament
  22. 242Power to remove difficulties
  23. 243Repeal of certain enactments and savings
  24. 244Transitional provisions
  25. 245Amendments of Act 9 of 1932
  26. 246Amendments of Act 1 of 1944
  27. 247Amendments of Act 43 of 1961
  28. 248Amendments of Act 52 of 1962
  29. 249Amendments of Act 51 of 1993
  30. 250Amendments of Act 32 of 1994
  31. 251Amendments of Act 54 of 2002
  32. 252Amendments of Act 1 of 2004
  33. 253Amendments of Act 51 of 2007
  34. 254Amendments of Act 6 of 2009
  35. 255Amendments of Act 18 of 2013

Schedules

  • The First Schedule
  • The Second Schedule
  • The Third Schedule
  • The Fourth Schedule
  • The Fifth Schedule
  • The Sixth Schedule
  • The Seventh Schedule
  • The Eighth Schedule
  • The Ninth Schedule
  • The Tenth Schedule
  • The Eleventh Schedule
  • The Twelfth Schedule

About this Act

The Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016) brings the law on reorganisation and insolvency resolution of companies, LLPs and other corporate persons, partnership firms and individuals into one time-bound framework aimed at maximising the value of assets.

It establishes the Insolvency and Bankruptcy Board of India (section 188) to regulate insolvency professionals, insolvency professional agencies and information utilities. The National Company Law Tribunal is the Adjudicating Authority for corporate persons (section 60), and the Debts Recovery Tribunal for individuals and partnership firms (section 179).

The Code is arranged in five Parts: preliminary matters, corporate insolvency and liquidation (Part II), individual and firm insolvency and bankruptcy (Part III), regulation of the insolvency ecosystem (Part IV) and miscellaneous provisions (Part V).

Who it applies to

  • Corporate debtors, including companies and LLPs, and their promoters and directors
  • Financial and operational creditors seeking resolution or recovery
  • Individuals, personal guarantors and partnership firms facing insolvency
  • Insolvency professionals, insolvency professional agencies and information utilities
  • Resolution applicants and liquidators

Good to know

Key chapters
Part II Chapter II (corporate insolvency resolution process, sections 6 to 32A), Chapter III (liquidation), Chapter IIIA (pre-packaged insolvency resolution process) and Chapter V (voluntary liquidation).
Amended by
Several amending Acts, including two in 2018, one in 2019, two in 2020 and one in 2021; the 2021 amendment introduced the pre-packaged insolvency resolution process.

Frequently asked questions

Which section allows a financial creditor to initiate CIRP?

Section 7. An operational creditor proceeds under sections 8 and 9, and a corporate applicant under section 10.

Where is the moratorium during CIRP provided?

Section 14, with its declaration under section 13.

Who is ineligible to submit a resolution plan?

Section 29A lists persons not eligible to be resolution applicants.

Which section sets the order of distribution in liquidation?

Section 53.

Which section establishes the Insolvency and Bankruptcy Board of India?

Section 188; its powers and functions are in section 196.