The Insolvency and Bankruptcy Code, 2016.

(1) This Code may be called the Insolvency and Bankruptcy Code, 2016.

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(2) It extends to the whole of India:

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(3) It shall come into force on such date² as the Central Government may, by notification in the Official Gazette, appoint:

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Provided that different dates may be appointed for different provisions of this Code and any reference in any such provision to the commencement of this Code shall be construed as a reference to the commencement of that provision.

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The provisions of this Code shall apply to--

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(a) any company incorporated under the Companies Act, 2013 (18 of 2013) or under any previous company law;

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(b) any other company governed by any special Act for the time being in force, except in so far as the said provisions are inconsistent with the provisions of such special Act;

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(c) any Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009);

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(d) such other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf; ¹***

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²[(e) personal guarantors to corporate debtors;

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(f) partnership firms and proprietorship firms; and

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(g) individuals, other than persons referred to in clause (e),]

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In this Code, unless the context otherwise requires,--

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(1) "Board" means the Insolvency and Bankruptcy Board of India established under sub-section (1) of section 188;

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(2) "bench" means a bench of the Adjudicating Authority;

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(3) "bye-laws" mean the bye-laws made by the insolvency professional agency under section 205;

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(4) "charge" means an interest or lien created on the property or assets of any person or any of its undertakings or both, as the case may be, as security and includes a mortgage;

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(5) "Chairperson" means the Chairperson of the Board;

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(6) "claim" means--

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(a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured;

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(b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured;

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(7) "corporate person" means a company as defined in clause (20) of section 2 of the Companies Act, 2013 (18 of 2013), a limited liability partnership, as defined in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or any other person incorporated with limited liability under any law for the time being in force but shall not include any financial service provider;

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(8) "corporate debtor" means a corporate person who owes a debt to any person;

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(9) "core services" means services rendered by an information utility for--

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(a) accepting electronic submission of financial information in such form and manner as may be specified;

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(b) safe and accurate recording of financial information;

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(c) authenticating and verifying the financial information submitted by a person; and

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(d) providing access to information stored with the information utility to persons as may be specified;

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(10) "creditor" means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder;

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(11) "debt" means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt;

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(12) "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not ¹[paid] by the debtor or the corporate debtor, as the case may be;

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(13) "financial information", in relation to a person, means one or more of the following categories of information, namely:--

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(a) records of the debt of the person;

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(b) records of liabilities when the person is solvent;

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(c) records of assets of person over which security interest has been created;

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(d) records, if any, of instances of default by the person against any debt;

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(e) records of the balance sheet and cash-flow statements of the person; and

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(f) such other information as may be specified;

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(14) "financial institution" means--

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(a) a scheduled bank;

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(b) financial institution as defined in section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);

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(c) public financial institution as defined in clause (72) of section 2 of the Companies Act, 2013 (18 of 2013); and

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(d) such other institution as the Central Government may by notification specify as a financial institution;

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(15) "financial product" means securities, contracts of insurance, deposits, credit arrangements including loans and advances by banks and financial institutions, retirement benefit plans, small savings instruments, foreign currency contracts other than contracts to exchange one currency (whether Indian or not) for another which are to be settled immediately, or any other instrument as may be prescribed;

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(16) "financial service" includes any of the following services, namely:

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(a) accepting of deposits;

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(b) safeguarding and administering assets consisting of financial products, belonging to another person, or agreeing to do so;

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(c) effecting contracts of insurance;

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(d) offering, managing or agreeing to manage assets consisting of financial products belonging to another person;

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(e) rendering or agreeing, for consideration, to render advice on or soliciting for the purposes of--

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(i) buying, selling, or subscribing to, a financial product;

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(ii) availing a financial service; or

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(iii) exercisfing any right associated with a financial product or financial service;

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(f) establishing or operating an investment scheme;

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(g) maintaining or transferring records of ownership of a financial product;

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(h) underwriting the issuance or subscription of a financial product; or

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(i) selling, providing, or issuing stored value or payment instruments or providing payment services;

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(17) "financial service provider" means a person engaged in the business of providing financial services in terms of authorisation issued or registration granted by a financial sector regulator;

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(18) "financial sector regulator" means an authority or body constituted under any law for the time being in force to regulate services or transactions of financial sector and includes the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory Authority and such other regulatory authorities as may be notified by the Central Government;

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(19) "insolvency professional" means a person enrolled under section 206 with an insolvency professional agency as its member and registered with the Board as an insolvency professional under section 207;

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(20) "insolvency professional agency" means any person registered with the Board under section 201 as an insolvency professional agency;

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(21) "information utility" means a person who is registered with the Board as an information utility under section 210;

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(22) "notification" means a notification published in the Official Gazette, and the terms notified and "notify" shall be construed accordingly;

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(23) "person" includes--

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(a) an individual;

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(b) a Hindu Undivided Family;

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(c) a company;

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(d) a trust;

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(e) a partnership;

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(f) a limited liability partnership; and

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(g) any other entity established under a statute,

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and includes a person resident outside India;

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(24) "person resident in India" shall have the meaning as assigned to such term in clause (v) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);

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(25) "person resident outside India" means a person other than a person resident in India;

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(26) "prescribed" means prescribed by rules made by the Central Government;

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(27) "property" includes money, goods, actionable claims, land and every description of property situated in India or outside India and every description of interest including present or future or vested or contingent interest arising out of, or incidental to, property;

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(28) "regulations" means the regulations made by the Board under this Code;

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(29) "Schedule" means the Schedule annexed to this Code;

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(30) "secured creditor" means a creditor in favour of whom security interest is created;

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(31) "security interest" means right, title or interest or a claim to property, created in favour of, or provided for a secured creditor by a transaction which secures payment or performance of an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any other agreement or arrangement securing payment or performance of any obligation of any person:

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Provided that security interest shall not include a performance guarantee;

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(32) "specified" means specified by regulations made by the Board under this Code and the term "specify" shall be construed accordingly;

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(33) "transaction" includes a agreement or arrangement in writing for the transfer of assets, or funds, goods or services, from or to the corporate debtor;

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(34) "transfer" includes sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien;

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(35) "transfer of property" means transfer of any property and includes a transfer of any interest in the property and creation of any charge upon such property;

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(36) "workman" shall have the same meaning as assigned to it in clause (s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947);

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(37) words and expressions used but not defined in this Code but defined in the Indian Contract Act, 1872 (9 of 1872), the Indian Partnership Act, 1932 (9 of 1932), the Securities Contact (Regulation) Act, 1956 (42 of 1956), the Securities Exchange Board of India Act, 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993), the Limited Liability Partnership Act, 2008 (6 of 2009) and the Companies Act, 2013 (18 of 2013), shall have the meanings respectively assigned to them in those Acts.

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This Part shall apply to matters relating to the insolvency and liquidation of corporate debtors where the minimum amount of the default is ¹[one crore rupees]:

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Provided that the Central Government may, by notification, specify the minimum amount of default of higher value which shall not be more than one crore rupees.

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²[Provided further that the Central Government may, by notification, specify such minimum amount of default of higher value, which shall not be more than one crore rupees, for matters relating to the prepackaged insolvency resolution process of corporate debtors under Chapter III-A.]

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In this Part, unless the context otherwise requires,--

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(1) Adjudicating Authority, for the purposes of this Part, means National Company Law Tribunal constituted under section 408 of the Companies Act, 2013 (18 of 2013);

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(2) auditor means a chartered accountant certified to practice as such by the Institute of Chartered Accountants of India under section 6 of the Chartered Accountants Act, 1949 (38 of 1949);

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¹ [(2A) “base resolution plan” means a resolution plan provided by the corporate debtor under clause (c) of sub-section (4) of section 54A;]

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(3) Chapter means a Chapter under this Part;

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(4) constitutional document, in relation to a corporate person, includes articles of association, memorandum of association of a company and incorporation document of a Limited Liability Partnership;

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(5) corporate applicant means--

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(a) corporate debtor; or

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(b) a member or partner of the corporate debtor who is authorised to make an application for the corporate insolvency resolution processs ¹[or the pre-packaged insolvency resolution process, as the case may be,] under the constitutional document of the corporate debtor; or

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(c) an individual who is in charge of managing the operations and resources of the corporate debtor; or

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(d) a person who has the control and supervision over the financial affairs of the corporate debtor;

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²[(5A) corporate guarantor means a corporate person who is the surety in a contract of guarantee to a corporate debtor;]

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(6) dispute includes a suit or arbitration proceedings relating to--

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(a) the existence of the amount of debt;

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(b) the quality of goods or service; or

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(c) the breach of a representation or warranty;

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(7) financial creditor means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to;

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(8) financial debt means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes--

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(a) money borrowed against the payment of interest;

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(b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent;

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(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

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(d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed;

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(e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing;

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³[Explanation----For the purposes of this sub-clause,--

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(i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and

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(ii) the expressions, allottee and real estate project shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);]

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(g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account;

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(h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution;

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(i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause;

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(9) financial position, in relation to any person, means the financial information of a person as on a certain date;

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(10) information memorandum means a memorandum prepared by resolution professional under sub-section (1) of section 29;

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(11) initiation date means the date on which a financial creditor, corporate applicant or operational creditor, as the case may be, makes an application to the Adjudicating Authority for initiating corporate insolvency resolution process ⁴ [or pre-packaged insolvency resolution process, as the case may be];

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(12) insolvency commencement date means the date of admission of an application for initiating corporate insolvency resolution process by the Adjudicating Authority under sections 7, 9 or section 10, as the case may be;

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(13) insolvency resolution process costs means--

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(a) the amount of any interim finance and the costs incurred in raising such finance;

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(b) the fees payable to any person acting as a resolution professional;

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(c) any costs incurred by the resolution professional in running the business of the corporate debtor as a going concern;

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(d) any costs incurred at the expense of the Government to facilitate the insolvency resolution process; and

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(e) any other costs as may be specified by the Board;

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(14) insolvency resolution process period means the period of one hundred and eighty days beginning from the insolvency commencement date and ending on one hundred and eightieth day;

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(15) interim finance means any financial debt raised by the resolution professional during the insolvency resolution process period ⁵[or by the corporate debtor during the pre-packaged insolvency resolution process period, as the case may be ] ⁶[and such other debt as may be notified];

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(16) liquidation cost means any cost incurred by the liquidator during the period of liquidation subject to such regulations, as may be specified by the Board;

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(17) liquidation commencement date means the date on which proceedings for liquidation commence in accordance with section 33 or section 59, as the case may be;

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(18) liquidator means an insolvency professional appointed as a liquidator in accordance with the provisions of Chapter III or Chapter V of this Part, as the case may be;

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(19) officer for the purposes of ⁵[Chapter VI and] Chapter VII of this Part, means an officer who is in default, as defined in clause (60) of section 2 of the Companies Act, 2013 (18 of 2013) or a designated partner as defined in clause (j) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), as the case may be;

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(20) operational creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred;

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(21) operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the ⁴[payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority;

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(22) personal guarantor means an individual who is the surety in a contract of guarantee to a corporate debtor;

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(23) personnel includes the directors, managers, key managerial personnel, designated partners and employees, if any, of the corporate debtor;

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⁵](23A) “preliminary information memorandum” means a memorandum submitted by the corporate debtor under clause (b) of sub-section (1) of section 54G;

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(23B) “pre-packaged insolvency commencement date” means the date of admission of an application for initiating the pre-packaged insolvency resolution process by the Adjudicating Authority under clause (a) of sub-section (4) of section 54C;

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(23C) “pre-packaged insolvency resolution process costs” means—

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(a) the amount of any interim finance and the costs incurred in raising such finance;

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(b) the fees payable to any person acting as a resolution professional and any expenses incurred by him for conducting the pre-packaged insolvency resolution process during the prepackaged insolvency resolution process period, subject to sub-section (6) of section 54F;

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(c) any costs incurred by the resolution professional in running the business of the corporate debtor as a going concern pursuant to an order under sub-section (2) of section 54J;

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(d) any costs incurred at the expense of the Government to facilitate the pre-packaged insolvency resolution process; and

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(e) any other costs as may be specified;

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(23D) “pre-packaged insolvency resolution process period” means the period beginning from the pre-packaged insolvency commencement date and ending on the date on which an order under subsection (1) of section 54L, or sub-section (1) of section 54N, or sub-section (2) of section 54-O, as the case may be, is passed by the Adjudicating Authority;]

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(24) related party, in relation to a corporate debtor, means--

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(a) a director or partner of the corporate debtor or a relative of a director or partner of the corporate debtor;

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(b) a key managerial personnel of the corporate debtor or a relative of a key managerial personnel of the corporate debtor;

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(c) a limited liability partnership or a partnership firm in which a director, partner, or manager of the corporate debtor or his relative is a partner;

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(d) a private company in which a director, partner or manager of the corporate debtor is a director and holds along with his relatives, more than two per cent. of its share capital;

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(e) a public company in which a director, partner or manager of the corporate debtor is a director and holds along with relatives, more than two per cent. of its paid-up share capital;

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(f) any body corporate whose board of directors, managing director or manager, in the ordinary course of business, acts on the advice, directions or instructions of a director, partner or manager of the corporate debtor;

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(g) any limited liability partnership or a partnership firm whose partners or employees in the ordinary course of business, acts on the advice, directions or instructions of a director, partner or manager of the corporate debtor;

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(h) any person on whose advice, directions or instructions, a director, partner or manager of the corporate debtor is accustomed to act;

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(i) a body corporate which is a holding, subsidiary or an associate company of the corporate debtor, or a subsidiary of a holding company to which the corporate debtor is a subsidiary;

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(j) any person who controls more than twenty per cent. of voting rights in the corporate debtor on account of ownership or a voting agreement;

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(k) any person in whom the corporate debtor controls more than twenty per cent. of voting rights on account of ownership or a voting agreement;

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(l) any person who can control the composition of the board of directors or corresponding governing body of the corporate debtor;

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(m) any person who is associated with the corporate debtor on account of--

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(i) participation in policy making processes of the corporate debtor; or

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(ii) having more than two directors in common between the corporate debtor and such person; or

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(iii) interchange of managerial personnel between the corporate debtor and such person; or

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(iv) provision of essential technical information to, or from, the corporate debtor;

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⁸[(24A) related party, in relation to an individual, means--

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(a) a person who is a relative of the individual or a relative of the spouse of the individual;

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(b) a partner of a limited liability partnership, or a limited liability partnership or a partnership firm, in which the individual is a partner;

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(c) a person who is a trustee of a trust in which the beneficiary of the trust includes the individual, or the terms of the trust confers a power on the trustee which may be exercised for the benefit of the individual;

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(d) a private company in which the individual is a director and holds along with his relatives, more than two per cent. of its share capital;

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(e) a public company in which the individual is a director and holds along with relatives, more than two per cent. of its paid-up share capital;

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(f) a body corporate whose board of directors, managing director or manager, in the ordinary course of business, acts on the advice, directions or instructions of the individual; (g) a limited liability partnership or a partnership firm whose partners or employees in the ordinary course of business, act on the advice, directions or instructions of the individual;

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(h) a person on whose advice, directions or instructions, the individual is accustomed to act;

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(i) a company, where the individual or the individual along with its related party, own more than fifty per cent. of the share capital of the company or controls the appointment of the board of directors of the company.

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Explanation.--For the purposes of this clause,--

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(a) relative, with reference to any person, means anyone who is related to another, in the following manner, namely:--

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(i) members of a Hindu Undivided Family,

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(ii) husband,

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(iii) wife,

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(iv) father,

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(v) mother,

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(vi) son,

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(vii) daughter,

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(viii) sons daughter and son,

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(ix) daughters daughter and son,

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(x) grandsons daughter and son,

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(xi) granddaughters daughter and son,

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(xii) brother,

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(xiii) sister,

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(xiv) brothers son and daughter,

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(xv) sisters son and daughter,

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(xvi) fathers father and mother,

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(xvii) mothers father and mother,

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(xviii) fathers brother and sister,

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(xix) mothers brother and sister, and

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(b) wherever the relation is that of a son, daughter, sister or brother, their spouses shall also be included;.

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⁹[(25) resolution applicant means a person, who individually or jointly with any other person, submits a resolution plan to the resolution professional pursuant to the invitation made under clause (h) of sub-section (2) of section 25] ¹⁰[or pursuant to section 54K, as the case may be];

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(26) resolution plan means a plan proposed by ¹¹[resolution applicant] for insolvency resolution of the corporate debtor as a going concern in accordance with Part II;

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¹²[Explanation.--For the removal of doubts, it is hereby clarified that a resolution plan may include provisions for the restructuring of the corporate debtor, including by way of merger, amalgamation and demerger;]

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(27) resolution professional, for the purposes of this Part, means an insolvency professional appointed to conduct the corporate insolvency resolution process ¹⁰[or the pre-packaged insolvency resolution process, as the case may be,] and includes an interim resolution professional; and

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(28) voting share means the share of the voting rights of a single financial creditor in the committee of creditors which is based on the proportion of the financial debt owed to such financial creditor in relation to the financial debt owed by the corporate debtor.

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Where any corporate debtor commits a default, a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate debtor in the manner as provided under this Chapter.

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(1) A financial creditor either by itself or jointly with ¹[other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government,] may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred.

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²[Provided that for the financial creditors, referred to in clauses (a) and (b) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class, whichever is less:

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Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent. of the total number of such allottees under the same real estate project, whichever is less:

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Provided also that where an application for initiating the corporate insolvency resolution process against a corporate debtor has been filed by a financial creditor referred to in the first and second provisos and has not been admitted by the Adjudicating Authority before the commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2020, such application shall be modified to comply with the requirements of the first or second proviso within thirty days of the commencement of the said Act, failing which the application shall be deemed to be withdrawn before its admission.]

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Explanation.--For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor.

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(2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed.

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(3) The financial creditor shall, along with the application furnish--

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(a) record of the default recorded with the information utility or such other record or evidence of default as may be specified;

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(b) the name of the resolution professional proposed to act as an interim resolution professional; and

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(c) any other information as may be specified by the Board.

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(4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3).

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³[Provided that if the Adjudicating Authority has not ascertained the existence of default and passed an order under sub-section (5) within such time, it shall record its reasons in writing for the same.]

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(5) Where the Adjudicating Authority is satisfied that--

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(a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or

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(b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application:

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Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority.

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(6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5).

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(7) The Adjudicating Authority shall communicate--

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(a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor;

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(b) the order under clause (b) of sub-section (5) to the financial creditor,

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within seven days of admission or rejection of such application, as the case may be.

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(1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed.

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(2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor

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(a) existence of a dispute, ¹ [if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute;

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(b) the ² [payment] of unpaid operational debt

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(i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or

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(ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor.

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Explanation.--For the purposes of this section, a "demand notice" means a notice served by an operational creditor to the corporate debtor demanding ²[payment] of the operational debt in respect of which the default has occurred.

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(1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process.

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(2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed.

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(3) The operational creditor shall, along with the application furnish--

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(a) a copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor;

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(b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt;

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(c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt ¹ [by the corporate debtor; if available;]

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² [(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and

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(e) any other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information, as may be prescribed.]

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(4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional.

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(5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order

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(i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,--

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(a) the application made under sub-section (2) is complete;

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(b) there is no ³ [payment] of the unpaid operational debt;

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(c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor;

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(d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and

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(e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any;

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(ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if--

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(a) the application made under sub-section (2) is incomplete;

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(b) there has been ³[payment] of the unpaid operational debt;

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(c) the creditor has not delivered the invoice or notice for payment to the corporate debtor;

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(d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or

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(e) any disciplinary proceeding is pending against any proposed resolution professional:

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Provided that Adjudicating Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the Adjudicating Authority.

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(6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section.

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(1) Where a corporate debtor has committed a default, a corporate applicant thereof may file an application for initiating corporate insolvency resolution process with the Adjudicating Authority.

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(2) The application under sub-section (1) shall be filed in such form, containing such particulars and in such manner and accompanied with such fee as may be prescribed.

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¹ [(3) The corporate applicant shall, along with the application furnish the information relating to--

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(a) its books of account and such other documents relating to such period as may be specified; and

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(b) the resolution professional proposed to be appointed as an interim resolution professional.

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(c) the special resolution passed by shareholders of the corporate debtor or the resolution passed by at least three-fourth of the total number of partners of the corporate debtor, as the case may be, approving filing of the application.]

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(4) The Adjudicating Authority shall, within a period of fourteen days of the receipt of the application, by an order--

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(a) admit the application, if it is complete; ²[and no disciplinary proceeding is pending against the proposed resolution professional]; or

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(b) reject the application, if it is incomplete: ²[or any disciplinary proceeding is pending against the proposed resolution professional:]

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Provided that Adjudicating Authority shall, before rejecting an application, give a notice to the applicant to rectify the defects in his application within seven days from the date of receipt of such notice from the Adjudicating Authority.

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(5) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (4) of this section.

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¹[10A. Suspension of initiation of corporate insolvency resolution process.--- Notwithstanding anything contained in sections 7, 9 and 10, no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf:

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Provided that no application shall ever be filed for initiation of corporate insolvency resolution process of a corporate debtor for the said default occurring during the said period.

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Explanation.--- For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020.]

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The following persons shall not be entitled to make an application to initiate corporate insolvency resolution process under this Chapter, namely:---

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(a) a corporate debtor undergoing a corporate insolvency resolution process ¹[ or a pre-packaged insolvency resolution process]; or

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¹[(aa) a financial creditor or an operational creditor of a corporate debtor undergoing a prepackaged insolvency resolution process; or]

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(b) a corporate debtor having completed corporate insolvency resolution process twelve months preceding the date of making of the application; or

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¹[(ba) a corporate debtor in respect of whom a resolution plan has been approved under Chapter III-A, twelve months preceding the date of making of the application; or]

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(c) a corporate debtor or a financial creditor who has violated any of the terms of resolution plan which was approved twelve months before the date of making of an application under this Chapter; or

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(d) a corporate debtor in respect of whom a liquidation order has been made.

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²[Explanation I].--- For the purposes of this section, a corporate debtor includes a corporate applicant in respect of such corporate debtor.

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³[Explanation II.--- For the purposes of this section, it is hereby clarified that nothing in this section shall prevent a corporate debtor referred to in clauses (a) to (d) from initiating corporate insolvency resolution process against another corporate debtor.]

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¹[11A. Disposal of applications under section 54C and under section 7 or section 9 or section10.(1) Where an application filed under section 54C is pending, the Adjudicating Authority shall pass an order to admit or reject such application, before considering any application filed under section 7 or section 9 or section 10 during the pendency of such application under section 54C, in respect of the same corporate debtor.

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(2) Where an application under section 54C is filed within fourteen days of filing of any application under section 7 or section 9 or section 10, which is pending, in respect of the same corporate debtor, then, notwithstanding anything contained in sections 7, 9 and 10, the Adjudicating Authority shall first dispose of the application under section 54C.

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(3) Where an application under section 54C is filed after fourteen days of the filing of any application under section 7 or section 9 or section 10, in respect of the same corporate debtor, the Adjudicating Authority shall first dispose of the application under section 7or section 9 or section 10.

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(4) The provisions of this section shall not apply where an application under section 7 or section 9 or section 10 is filed and pending as on the date of the commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2021.]

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(1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process.

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(2) The resolution professional shall file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyond one hundred and eighty days, if instructed to do so by a resolution passed at a meeting of the committee of creditors by a vote of ¹[sixty-six] per cent. of the voting shares.

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(3) On receipt of an application under sub-section (2), if the Adjudicating Authority is satisfied that the subject matter of the case is such that corporate insolvency resolution process cannot be completed within one hundred and eighty days, it may by order extend the duration of such process beyond one hundred and eighty days by such further period as it thinks fit, but not exceeding ninety days:

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Provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once.

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²[Provided further that the corporate insolvency resolution process shall mandatorily be completed within a period of three hundred and thirty days from the insolvency commencement date, including any extension of the period of corporate insolvency resolution process granted under this section and the time taken in legal proceedings in relation to such resolution process of the corporate debtor:

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Provided also that where the insolvency resolution process of a corporate debtor is pending and has not been completed within the period referred to in the second proviso, such resolution process shall be completed within a period of ninety days from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019.]

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¹[12A. Withdrawal of application admitted under section 7, 9 or 10.—The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an application made by the applicant with the approval of ninety per cent. voting share of the committee of creditors, in such manner as may be specified.]

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(1) The Adjudicating Authority, after admission of the application under section 7 or section 9 or section 10, shall, by an order—

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(a) declare a moratorium for the purposes referred to in section 14;

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(b) cause a public announcement of the initiation of corporate insolvency resolution process and call for the submission of claims under section 15; and

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(c) appoint an interim resolution professional in the manner as laid down in section 16.

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(2) The public announcement referred to in clause (b) of sub-section (1) shall be made immediately after the appointment of the interim resolution professional.

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(1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:--

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(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

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(b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;

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(c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

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(d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

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¹[Explanation.--For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period;]

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(2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.

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¹[(2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified;]

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²[(3) The provisions of sub-section (1) shall not apply to--

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³[(a) such transactions, agreements or other arrangements as may be notified by the Central Government in consultation with any financial sector regulator or any other authority;]

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(b) a surety in a contract of guarantee to a corporate debtor.].

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(4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process:

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Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be.

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(1) The public announcement of the corporate insolvency resolution process under the order referred to in section 13 shall contain the following information, namely:—

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(a) name and address of the corporate debtor under the corporate insolvency resolution process;

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(b) name of the authority with which the corporate debtor is incorporated or registered;

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(c) the last date for submission of ¹ [claims, as may be specified] ;

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(d) details of the interim resolution professional who shall be vested with the management of the corporate debtor and be responsible for receiving claims;

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(e) penalties for false or misleading claims; and

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(f) the date on which the corporate insolvency resolution process shall close, which shall be the one hundred and eightieth day from the date of the admission of the application under sections 7, 9 or section 10, as the case may be.

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(2) The public announcement under this section shall be made in such manner as may be specified.

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(1) The Adjudicating Authority shall appoint an interim resolution professional ¹[on the insolvency commencement date].

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(2) Where the application for corporate insolvency resolution process is made by a financial creditor or the corporate debtor, as the case may be, the resolution professional, as proposed respectively in the application under section 7 or section 10, shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him.

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(3) Where the application for corporate insolvency resolution process is made by an operational creditor and--

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(a) no proposal for an interim resolution professional is made, the Adjudicating Authority shall make a reference to the Board for the recommendation of an insolvency professional who may act as an interim resolution professional;

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(b) a proposal for an interim resolution professional is made under sub-section (4) of section 9, the resolution professional as proposed, shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him.

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(4) The Board shall, within ten days of the receipt of a reference from the Adjudicating Authority under sub-section (3), recommend the name of an insolvency professional to the Adjudicating Authority against whom no disciplinary proceedings are pending.

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(5) The term of the interim resolution professional ²[shall continue till the date of appointment of the resolution professional under section 22].

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(1) From the date of appointment of the interim resolution professional,---

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(a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional;

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(b) the powers of the board of directors or the partners of the corporate debtor, as the case may be, shall stand suspended and be exercised by the interim resolution professional;

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(c) the officers and managers of the corporate debtor shall report to the interim resolution professional and provide access to such documents and records of the corporate debtor as may be required by the interim resolution professional;

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(d) the financial institutions maintaining accounts of the corporate debtor shall act on the instructions of the interim resolution professional in relation to such accounts and furnish all information relating to the corporate debtor available with them to the interim resolution professional.

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(2) The interim resolution professional vested with the management of the corporate debtor shall---

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(a) act and execute in the name and on behalf of the corporate debtor all deeds, receipts, and other documents, if any;

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(b) take such actions, in the manner and subject to such restrictions, as may be specified by the Board;

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(c) have the authority to access the electronic records of corporate debtor from information utility having financial information of the corporate debtor;

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(d) have the authority to access the books of account, records and other relevant documents of corporate debtor available with government authorities, statutory auditors, accountants and such other persons as ¹[may be specified; and].

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²[(e) be responsible for complying with the requirements under any law for the time being in force on behalf of the corporate debtor.].

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