The Insolvency and Bankruptcy Code, 2016.
Administered Ministry: Ministry of Corporate Affairs
Section
Section 77A Punishment for offences related to pre-packaged insolvency resolution process.
1[77A. Punishment for offences related to prepackaged insolvency resolution process.--(1) Where--
(a) a corporate debtor provides any information in the application under section 54C which is false in material particulars, knowing it to be false or omits any material fact, knowing it to be material; or
(b) a corporate debtor provides any information in the list of claims or the preliminary information memorandum submitted under sub-section (1) of section 54G which is false in material particulars, knowing it to be false or omits any material fact, knowing it to be material; or
(c) any person who knowingly and wilfully authorised or permitted the furnishing of such information under sub-clauses (a) and (b),
such corporate debtor or person, as the case may be, shall be punishable with imprisonment for a term which shall not be less than three years, but which may extend to five years or with fine which shall not be less than one lakh rupees, but which may extend to one crore rupees, or with both.
(2) If a director or partner of the corporate debtor, as the case may be, deliberately contravenes the provisions of Chapter III-A, such person shall be punishable with imprisonment for not less than three years, but which may extend to five years, or with fine which shall not be less than one lakh rupees, but which may extend to one crore rupees, or with both.
Explanation.--For the purposes of this section and sections 75, 76 and 77, an application shall be deemed to be false in material particulars in case the facts mentioned or omitted in the application, if true, or not omitted from the application, as the case may be, would have been sufficient to determine the existence of a default under this Code.]
(a) a corporate debtor provides any information in the application under section 54C which is false in material particulars, knowing it to be false or omits any material fact, knowing it to be material; or
(b) a corporate debtor provides any information in the list of claims or the preliminary information memorandum submitted under sub-section (1) of section 54G which is false in material particulars, knowing it to be false or omits any material fact, knowing it to be material; or
(c) any person who knowingly and wilfully authorised or permitted the furnishing of such information under sub-clauses (a) and (b),
such corporate debtor or person, as the case may be, shall be punishable with imprisonment for a term which shall not be less than three years, but which may extend to five years or with fine which shall not be less than one lakh rupees, but which may extend to one crore rupees, or with both.
(2) If a director or partner of the corporate debtor, as the case may be, deliberately contravenes the provisions of Chapter III-A, such person shall be punishable with imprisonment for not less than three years, but which may extend to five years, or with fine which shall not be less than one lakh rupees, but which may extend to one crore rupees, or with both.
Explanation.--For the purposes of this section and sections 75, 76 and 77, an application shall be deemed to be false in material particulars in case the facts mentioned or omitted in the application, if true, or not omitted from the application, as the case may be, would have been sufficient to determine the existence of a default under this Code.]
1Ins. by Act 26 of 2021, s. 13 (w.e.f. 4-4-2021).
Section 78 Application.
This Part shall apply to matters relating to fresh start, insolvency and bankruptcy of individuals and partnership firms where the amount of the default is not less than one thousand rupees:
Provided that the Central Government may, by notification, specify the minimum amount of default of higher value which shall not be more than one lakh rupees.
Provided that the Central Government may, by notification, specify the minimum amount of default of higher value which shall not be more than one lakh rupees.
Section 79 Definitions.
In this Part, unless the context otherwise requires,—
(1) “Adjudicating Authority” means the Debt Recovery Tribunal constituted under sub-section (1) of section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993);
(2) “associate” of the debtor means—
(a) a person who belongs to the immediate family of the debtor;
(b) a person who is a relative of the debtor or a relative of the spouse of the debtor;
(c) a person who is in partnership with the debtor;
(d) a person who is a spouse or a relative of any person with whom the debtor is in partnership;
(e) a person who is employer of the debtor or employee of the debtor;
(f) a person who is a trustee of a trust in which the beneficiaries of the trust include a debtor, or the terms of the trust confer a power on the trustee which may be exercised for the benefit of the debtor; and
(g) a company, where the debtor or the debtor along with his associates, own more than fifty per cent. of the share capital of the company or control the appointment of the board of directors of the company.
Explanation.—For the purposes of this clause, “relative”, with reference to any person, means anyone who is related to another, if—
(i) they are members of a Hindu Undivided Family;
(ii) one person is related to the other in such manner as may be prescribed;
(3) “bankrupt” means—
(a) a debtor who has been adjudged as bankrupt by a bankruptcy order under section 126;
(b) each of the partners of a firm, where a bankruptcy order under section 126 has been made against a firm; or
(c) any person adjudged as an undischarged insolvent;
(4) “bankruptcy” means the state of being bankrupt;
(5) “bankruptcy debt”, in relation to a bankrupt, means—
(a) any debt owed by him as on the bankruptcy commencement date;
(b) any debt for which he may become liable after bankruptcy commencement date but before his discharge by reason of any transaction entered into before the bankruptcy commencement date; and
(c) any interest which is a part of the debt under section 171;
(6) “bankruptcy commencement date” means the date on which a bankruptcy order is passed by the Adjudicating Authority under section 126;
(7) “bankruptcy order” means an order passed by an Adjudicating Authority under section 126;
(8) “bankruptcy process” means a process against a debtor under Chapters IV and V of this Part;
(9) “bankruptcy trustee” means the insolvency professional appointed as a trustee for the estate of the bankrupt under section 125;
(10) “Chapter” means a chapter under this Part;
(11) “committee of creditors” means a committee constituted under section 134;
(12) “debtor” includes a judgment-debtor;
(13) “discharge order” means an order passed by the Adjudicating Authority discharging the debtor under sections 92, 119 and section 138, as the case may be;
(14) “excluded assets” for the purposes of this part includes—
(a) unencumbered tools, books, vehicles and other equipment as are necessary to the debtor or bankrupt for his personal use or for the purpose of his employment, business or vocation,
(b) unencumbered furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his immediate family;
(c) any unencumbered personal ornaments of such value, as may be prescribed, of the debtor or his immediate family which cannot be parted with, in accordance with religious usage;
(d) any unencumbered life insurance policy or pension plan taken in the name of debtor or his immediate family; and
(e) an unencumbered single dwelling unit owned by the debtor of such value as may be prescribed;
(15) “excluded debt” means—
(a) liability to pay fine imposed by a court or tribunal;
(b) liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other legal obligation;
(c) liability to pay maintenance to any person under any law for the time being in force;
(d) liability in relation to a student loan; and
(e) any other debt as may be prescribed;
(16) “firm” means a body of individuals carrying on business in partnership whether or not registered under section 59 of the Indian Partnership Act, 1932 (9 of 1932);
(17) “immediate family” of the debtor means his spouse, dependent children and dependent parents;
(18) “partnership debt” means a debt for which all the partners in a firm are jointly liable;
(19) “qualifying debt” means amount due, which includes interest or any other sum due in respect of the amounts owed under any contract, by the debtor for a liquidated sum either immediately or at certain future time and does not include—
(a) an excluded debt;
(b) a debt to the extent it is secured; and
(c) any debt which has been incurred three months prior to the date of the application for fresh start process;
(20) “repayment plan” means a plan prepared by the debtor in consultation with the resolution professional under section 105 containing a proposal to the committee of creditors for restructuring of his debts or affairs;
(21) “resolution professional” means an insolvency professional appointed under this part as a resolution professional for conducting the fresh start process or insolvency resolution process;
(22) “undischarged bankrupt” means a bankrupt who has not received a discharge order under section 138.
(1) “Adjudicating Authority” means the Debt Recovery Tribunal constituted under sub-section (1) of section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993);
(2) “associate” of the debtor means—
(a) a person who belongs to the immediate family of the debtor;
(b) a person who is a relative of the debtor or a relative of the spouse of the debtor;
(c) a person who is in partnership with the debtor;
(d) a person who is a spouse or a relative of any person with whom the debtor is in partnership;
(e) a person who is employer of the debtor or employee of the debtor;
(f) a person who is a trustee of a trust in which the beneficiaries of the trust include a debtor, or the terms of the trust confer a power on the trustee which may be exercised for the benefit of the debtor; and
(g) a company, where the debtor or the debtor along with his associates, own more than fifty per cent. of the share capital of the company or control the appointment of the board of directors of the company.
Explanation.—For the purposes of this clause, “relative”, with reference to any person, means anyone who is related to another, if—
(i) they are members of a Hindu Undivided Family;
(ii) one person is related to the other in such manner as may be prescribed;
(3) “bankrupt” means—
(a) a debtor who has been adjudged as bankrupt by a bankruptcy order under section 126;
(b) each of the partners of a firm, where a bankruptcy order under section 126 has been made against a firm; or
(c) any person adjudged as an undischarged insolvent;
(4) “bankruptcy” means the state of being bankrupt;
(5) “bankruptcy debt”, in relation to a bankrupt, means—
(a) any debt owed by him as on the bankruptcy commencement date;
(b) any debt for which he may become liable after bankruptcy commencement date but before his discharge by reason of any transaction entered into before the bankruptcy commencement date; and
(c) any interest which is a part of the debt under section 171;
(6) “bankruptcy commencement date” means the date on which a bankruptcy order is passed by the Adjudicating Authority under section 126;
(7) “bankruptcy order” means an order passed by an Adjudicating Authority under section 126;
(8) “bankruptcy process” means a process against a debtor under Chapters IV and V of this Part;
(9) “bankruptcy trustee” means the insolvency professional appointed as a trustee for the estate of the bankrupt under section 125;
(10) “Chapter” means a chapter under this Part;
(11) “committee of creditors” means a committee constituted under section 134;
(12) “debtor” includes a judgment-debtor;
(13) “discharge order” means an order passed by the Adjudicating Authority discharging the debtor under sections 92, 119 and section 138, as the case may be;
(14) “excluded assets” for the purposes of this part includes—
(a) unencumbered tools, books, vehicles and other equipment as are necessary to the debtor or bankrupt for his personal use or for the purpose of his employment, business or vocation,
(b) unencumbered furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his immediate family;
(c) any unencumbered personal ornaments of such value, as may be prescribed, of the debtor or his immediate family which cannot be parted with, in accordance with religious usage;
(d) any unencumbered life insurance policy or pension plan taken in the name of debtor or his immediate family; and
(e) an unencumbered single dwelling unit owned by the debtor of such value as may be prescribed;
(15) “excluded debt” means—
(a) liability to pay fine imposed by a court or tribunal;
(b) liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other legal obligation;
(c) liability to pay maintenance to any person under any law for the time being in force;
(d) liability in relation to a student loan; and
(e) any other debt as may be prescribed;
(16) “firm” means a body of individuals carrying on business in partnership whether or not registered under section 59 of the Indian Partnership Act, 1932 (9 of 1932);
(17) “immediate family” of the debtor means his spouse, dependent children and dependent parents;
(18) “partnership debt” means a debt for which all the partners in a firm are jointly liable;
(19) “qualifying debt” means amount due, which includes interest or any other sum due in respect of the amounts owed under any contract, by the debtor for a liquidated sum either immediately or at certain future time and does not include—
(a) an excluded debt;
(b) a debt to the extent it is secured; and
(c) any debt which has been incurred three months prior to the date of the application for fresh start process;
(20) “repayment plan” means a plan prepared by the debtor in consultation with the resolution professional under section 105 containing a proposal to the committee of creditors for restructuring of his debts or affairs;
(21) “resolution professional” means an insolvency professional appointed under this part as a resolution professional for conducting the fresh start process or insolvency resolution process;
(22) “undischarged bankrupt” means a bankrupt who has not received a discharge order under section 138.
Section 80 Eligibility for making an application.
(1) A debtor, who is unable to pay his debt and fulfils the conditions specified in sub-section (2), shall be entitled to make an application for a fresh start for discharge of his qualifying debt under this Chapter.
(2) A debtor may apply, either personally or through a resolution professional, for a fresh start under this Chapter in respect of his qualifying debts to the Adjudicating Authority if —
(a) the gross annual income of the debtor does not exceed sixty thousand rupees;
(b) the aggregate value of the assets of the debtor does not exceed twenty thousand rupees;
(c) the aggregate value of the qualifying debts does not exceed thirty-five thousand rupees;
(d) he is not an undischarged bankrupt;
(e) he does not own a dwelling unit, irrespective of whether it is encumbered or not;
(f) a fresh start process, insolvency resolution process or bankruptcy process is not subsisting against him; and
(g) no previous fresh start order under this Chapter has been made in relation to him in the preceding twelve months of the date of the application for fresh start.
(2) A debtor may apply, either personally or through a resolution professional, for a fresh start under this Chapter in respect of his qualifying debts to the Adjudicating Authority if —
(a) the gross annual income of the debtor does not exceed sixty thousand rupees;
(b) the aggregate value of the assets of the debtor does not exceed twenty thousand rupees;
(c) the aggregate value of the qualifying debts does not exceed thirty-five thousand rupees;
(d) he is not an undischarged bankrupt;
(e) he does not own a dwelling unit, irrespective of whether it is encumbered or not;
(f) a fresh start process, insolvency resolution process or bankruptcy process is not subsisting against him; and
(g) no previous fresh start order under this Chapter has been made in relation to him in the preceding twelve months of the date of the application for fresh start.
Section 81 Application for fresh start order.
(1) When an application is filed under section 80 by a debtor, an interim-moratorium shall commence on the date of filing of said application in relation to all the debts and shall cease to have effect on the date of admission or rejection of such application, as the case may be.
(2) During the interim-moratorium period,—
(i) any legal action or legal proceeding pending in respect of any of his debts shall be deemed to have been stayed; and
(ii) no creditor shall initiate any legal action or proceedings in respect of such debt.
(3) The application under section 80 shall be in such form and manner and accompanied by such fee, as may be prescribed.
(4) The application under sub-section (3) shall contain the following information supported by an affidavit, namely:—
(a) a list of all debts owed by the debtor as on the date of the said application along with details relating to the amount of each debt, interest payable thereon and the names of the creditors to whom each debt is owed;
(b) the interest payable on the debts and the rate thereof stipulated in the contract;
(c) a list of security held in respect of any of the debts;
(d) the financial information of the debtor and his immediate family up to two years prior to the date of the application;
(e) the particulars of the debtor's personal details, as may be prescribed;
(f) the reasons for making the application;
(g) the particulars of any legal proceedings which, to the debtor's knowledge has been commenced against him;
(h) the confirmation that no previous fresh start order under this Chapter has been made in respect of the qualifying debts of the debtor in the preceding twelve months of the date of the application.
(2) During the interim-moratorium period,—
(i) any legal action or legal proceeding pending in respect of any of his debts shall be deemed to have been stayed; and
(ii) no creditor shall initiate any legal action or proceedings in respect of such debt.
(3) The application under section 80 shall be in such form and manner and accompanied by such fee, as may be prescribed.
(4) The application under sub-section (3) shall contain the following information supported by an affidavit, namely:—
(a) a list of all debts owed by the debtor as on the date of the said application along with details relating to the amount of each debt, interest payable thereon and the names of the creditors to whom each debt is owed;
(b) the interest payable on the debts and the rate thereof stipulated in the contract;
(c) a list of security held in respect of any of the debts;
(d) the financial information of the debtor and his immediate family up to two years prior to the date of the application;
(e) the particulars of the debtor's personal details, as may be prescribed;
(f) the reasons for making the application;
(g) the particulars of any legal proceedings which, to the debtor's knowledge has been commenced against him;
(h) the confirmation that no previous fresh start order under this Chapter has been made in respect of the qualifying debts of the debtor in the preceding twelve months of the date of the application.
Section 82 Appointment of resolution professional.
(1) Where an application under section 80 is filed by the debtor through a resolution professional, the Adjudicating Authority shall direct the Board within seven days of the date of receipt of the application and shall seek confirmation from the Board that there are no disciplinary proceedings against the resolution professional who has submitted such application.
(2) The Board shall communicate to the Adjudicating Authority in writing either—
(a) confirmation of the appointment of the resolution professional who filed an application under sub-section (1); or
(b) rejection of the appointment of the resolution professional who filed an application under sub-section (1) and nominate a resolution professional suitable for the fresh start process.
(3) Where an application under section 80 is filed by the debtor himself and not through the resolution professional, the Adjudicating Authority shall direct the Board within seven days of the date of the receipt of an application to nominate a resolution professional for the fresh start process.
(4) The Board shall nominate a resolution professional within ten days of receiving the direction issued by the Adjudicating Authority under sub-section (3).
(5) The Adjudicating Authority shall by order appoint the resolution professional recommended or nominated by the Board under sub-section (2) or sub-section (4), as the case may be.
(6) A resolution professional appointed by the Adjudicating Authority under sub-section (5) shall be provided a copy of the application for fresh start.
(2) The Board shall communicate to the Adjudicating Authority in writing either—
(a) confirmation of the appointment of the resolution professional who filed an application under sub-section (1); or
(b) rejection of the appointment of the resolution professional who filed an application under sub-section (1) and nominate a resolution professional suitable for the fresh start process.
(3) Where an application under section 80 is filed by the debtor himself and not through the resolution professional, the Adjudicating Authority shall direct the Board within seven days of the date of the receipt of an application to nominate a resolution professional for the fresh start process.
(4) The Board shall nominate a resolution professional within ten days of receiving the direction issued by the Adjudicating Authority under sub-section (3).
(5) The Adjudicating Authority shall by order appoint the resolution professional recommended or nominated by the Board under sub-section (2) or sub-section (4), as the case may be.
(6) A resolution professional appointed by the Adjudicating Authority under sub-section (5) shall be provided a copy of the application for fresh start.
Section 83 Examination of application by resolution professional.
(1) The resolution professional shall examine the application made under section 80 within ten days of his appointment, and submit a report to the Adjudicating Authority, either recommending acceptance or rejection of the application.
(2) The report referred to in sub-section (1) shall contain the details of the amounts mentioned in the application which in the opinion of the resolution professional are—
(a) qualifying debts; and
(b) liabilities eligible for discharge under sub-section (3) of section 92.
(3) The resolution professional may call for such further information or explanation in connection with the application as may be required from the debtor or any other person who, in the opinion of the resolution professional, may provide such information.
(4) The debtor or any other person, as the case may be, shall furnish such information or explanation within seven days of receipt of the request under sub-section (3).
(5) The resolution professional shall presume that the debtor is unable to pay his debts at the date of the application if—
(a) in his opinion the information supplied in the application indicates that the debtor is unable to pay his debts and he has no reason to believe that the information supplied is incorrect or incomplete; and
(b) he has reason to believe that there is no change in the financial circumstances of the debtor since the date of the application enabling the debtor to pay his debts.
(6) The resolution professional shall reject the application, if in his opinion—
(a) the debtor does not satisfy the conditions specified under section 80; or
(b) the debts disclosed in the application by the debtor are not qualifying debts; or
(c) the debtor has deliberately made a false representation or omission in the application or with respect to the documents or information submitted.
(7) The resolution professional shall record the reasons for recommending the acceptance or rejection of the application in the report to the Adjudicating Authority under sub-section (1) and shall give a copy of the report to the debtor.
(2) The report referred to in sub-section (1) shall contain the details of the amounts mentioned in the application which in the opinion of the resolution professional are—
(a) qualifying debts; and
(b) liabilities eligible for discharge under sub-section (3) of section 92.
(3) The resolution professional may call for such further information or explanation in connection with the application as may be required from the debtor or any other person who, in the opinion of the resolution professional, may provide such information.
(4) The debtor or any other person, as the case may be, shall furnish such information or explanation within seven days of receipt of the request under sub-section (3).
(5) The resolution professional shall presume that the debtor is unable to pay his debts at the date of the application if—
(a) in his opinion the information supplied in the application indicates that the debtor is unable to pay his debts and he has no reason to believe that the information supplied is incorrect or incomplete; and
(b) he has reason to believe that there is no change in the financial circumstances of the debtor since the date of the application enabling the debtor to pay his debts.
(6) The resolution professional shall reject the application, if in his opinion—
(a) the debtor does not satisfy the conditions specified under section 80; or
(b) the debts disclosed in the application by the debtor are not qualifying debts; or
(c) the debtor has deliberately made a false representation or omission in the application or with respect to the documents or information submitted.
(7) The resolution professional shall record the reasons for recommending the acceptance or rejection of the application in the report to the Adjudicating Authority under sub-section (1) and shall give a copy of the report to the debtor.
Section 84 Admission or rejection of application by Adjudicating Authority.
(1) The Adjudicating Authority may within fourteen days from the date of submission of the report by the resolution professional, pass an order either admitting or rejecting the application made under sub-section (1) of section 81.
(2) The order passed under sub-section (1) accepting the application shall state the amount which has been accepted as qualifying debts by the resolution professional and other amounts eligible for discharge under section 92 for the purposes of the fresh start order.
(3) A copy of the order passed by the Adjudicating Authority under sub-section (1) along with a copy of the application shall be provided to the creditors mentioned in the application within seven days of the passing of the order.
(2) The order passed under sub-section (1) accepting the application shall state the amount which has been accepted as qualifying debts by the resolution professional and other amounts eligible for discharge under section 92 for the purposes of the fresh start order.
(3) A copy of the order passed by the Adjudicating Authority under sub-section (1) along with a copy of the application shall be provided to the creditors mentioned in the application within seven days of the passing of the order.
Section 85 Effect of admission of application.
(1) On the date of admission of the application, the moratorium period shall commence in respect of all the debts.
(2) During the moratorium period--
(a) any pending legal action or legal proceeding in respect of any debt shall be deemed to have been stayed; and
(b) subject to the provisions of section 86, the creditors shall not initiate any legal action or proceedings in respect of any debt.
(3) During the moratorium period, the debtor shall--
(a) not act as a director of any company, or directly or indirectly take part in or be concerned in the promotion, formation or management of a company;
(b) not dispose of or alienate any of his assets;
(c) inform his business partners that he is undergoing a fresh start process;
(d) be required to inform prior to entering into any financial or commercial transaction of such value as may be notified by the Central Government, either individually or jointly, that he is undergoing a fresh start process;
(e) disclose the name under which he enters into business transactions, if it is different from the name in the application admitted under section 84;
(f) not travel outside India except with the permission of the Adjudicating Authority.
(4) The moratorium ceases to have effect at the end of the period of one hundred and eighty days beginning with the date of admission unless the order admitting the application is revoked under sub-section (2) of section 91.
(2) During the moratorium period--
(a) any pending legal action or legal proceeding in respect of any debt shall be deemed to have been stayed; and
(b) subject to the provisions of section 86, the creditors shall not initiate any legal action or proceedings in respect of any debt.
(3) During the moratorium period, the debtor shall--
(a) not act as a director of any company, or directly or indirectly take part in or be concerned in the promotion, formation or management of a company;
(b) not dispose of or alienate any of his assets;
(c) inform his business partners that he is undergoing a fresh start process;
(d) be required to inform prior to entering into any financial or commercial transaction of such value as may be notified by the Central Government, either individually or jointly, that he is undergoing a fresh start process;
(e) disclose the name under which he enters into business transactions, if it is different from the name in the application admitted under section 84;
(f) not travel outside India except with the permission of the Adjudicating Authority.
(4) The moratorium ceases to have effect at the end of the period of one hundred and eighty days beginning with the date of admission unless the order admitting the application is revoked under sub-section (2) of section 91.
Section 86 Objections by creditor and their examination by resolution professional.
(1) Any creditor mentioned in the order of the Adjudicating Authority under section 84 to whom a qualifying debt is owed may, within a period of ten days from the date of receipt of the order under section 84, object only on the following grounds, namely:—
(a) inclusion of a debt as a qualifying debt; or
(b) incorrectness of the details of the qualifying debt specified in the order under section 84.
(2) A creditor may file an objection under sub-section (1) by way of an application to the resolution professional.
(3) The application under sub-section (2) shall be supported by such information and documents as may be prescribed.
(4) The resolution professional shall consider every objection made under this section.
(5) The resolution professional shall examine the objections under sub-section (2) and either accept or reject the objections, within ten days of the date of the application.
(6) The resolution professional may examine any matter that appears to him to be relevant to the making of a final list of qualifying debts for the purposes of section 92.
(7) On the basis of the examination under sub-section (5) or sub-section (6), the resolution professional shall—
(a) prepare an amended list of qualifying debts for the purpose of the discharge order;
(b) make an application to the Adjudicating Authority for directions under section 90; or
(c) take such other steps as he considers necessary in relation to the debtor.
(a) inclusion of a debt as a qualifying debt; or
(b) incorrectness of the details of the qualifying debt specified in the order under section 84.
(2) A creditor may file an objection under sub-section (1) by way of an application to the resolution professional.
(3) The application under sub-section (2) shall be supported by such information and documents as may be prescribed.
(4) The resolution professional shall consider every objection made under this section.
(5) The resolution professional shall examine the objections under sub-section (2) and either accept or reject the objections, within ten days of the date of the application.
(6) The resolution professional may examine any matter that appears to him to be relevant to the making of a final list of qualifying debts for the purposes of section 92.
(7) On the basis of the examination under sub-section (5) or sub-section (6), the resolution professional shall—
(a) prepare an amended list of qualifying debts for the purpose of the discharge order;
(b) make an application to the Adjudicating Authority for directions under section 90; or
(c) take such other steps as he considers necessary in relation to the debtor.
Section 87 Application against decision of resolution professional.
(1) The debtor or the creditor who is aggrieved by the action taken by the resolution professional under section 86 may, within ten days of such decision, make an application to the Adjudicating Authority challenging such action on any of the following grounds, namely:—
(a) that the resolution professional has not given an opportunity to the debtor or the creditor to make a representation; or
(b) that the resolution professional colluded with the other party in arriving at the decision; or
(c) that the resolution professional has not complied with the requirements of section 86.
(2) The Adjudicating Authority shall decide the application referred to in sub-section (1) within fourteen days of such application, and make an order as it deems fit.
(3) Where the application under sub-section (1) has been allowed by the Adjudicating Authority, it shall forward its order to the Board and the Board may take such action as may be required under Chapter VI of Part IV against the resolution professional.
(a) that the resolution professional has not given an opportunity to the debtor or the creditor to make a representation; or
(b) that the resolution professional colluded with the other party in arriving at the decision; or
(c) that the resolution professional has not complied with the requirements of section 86.
(2) The Adjudicating Authority shall decide the application referred to in sub-section (1) within fourteen days of such application, and make an order as it deems fit.
(3) Where the application under sub-section (1) has been allowed by the Adjudicating Authority, it shall forward its order to the Board and the Board may take such action as may be required under Chapter VI of Part IV against the resolution professional.
Section 88 General duties of debtor.
The debtor shall—
(a) make available to the resolution professional all information relating to his affairs, attend meetings and comply with the requests of the resolution professional in relation to the fresh start process.
(b) inform the resolution professional as soon as reasonably possible of—
(i) any material error or omission in relation to the information or document supplied to the resolution professional; or
(ii) any change in financial circumstances after the date of application, where such change has an impact on the fresh start process.
(a) make available to the resolution professional all information relating to his affairs, attend meetings and comply with the requests of the resolution professional in relation to the fresh start process.
(b) inform the resolution professional as soon as reasonably possible of—
(i) any material error or omission in relation to the information or document supplied to the resolution professional; or
(ii) any change in financial circumstances after the date of application, where such change has an impact on the fresh start process.
Section 89 Replacement of resolution professional.
(1) Where the debtor or the creditor is of the opinion that the resolution professional appointed under section 82 is required to be replaced, he may apply to the Adjudicating Authority for the replacement of such resolution professional.
(2) The Adjudicating Authority shall within seven days of the receipt of the application under sub-section (1) make a reference to the Board for replacement of the resolution professional.
(3) The Board shall, within ten days of the receipt of a reference from the Adjudicating Authority under sub-section (2), recommend the name of an insolvency professional to the Adjudicating Authority against whom no disciplinary proceedings are pending.
(4) The Adjudicating Authority shall appoint another resolution professional for the purposes of the fresh start process on the basis of the recommendation by the Board.
(5) The Adjudicating Authority may give directions to the resolution professional replaced under sub-section (4)—
(a) to share all information with the new resolution professional in respect of the fresh start process; and
(b) to co-operate with the new resolution professional as may be required.
(2) The Adjudicating Authority shall within seven days of the receipt of the application under sub-section (1) make a reference to the Board for replacement of the resolution professional.
(3) The Board shall, within ten days of the receipt of a reference from the Adjudicating Authority under sub-section (2), recommend the name of an insolvency professional to the Adjudicating Authority against whom no disciplinary proceedings are pending.
(4) The Adjudicating Authority shall appoint another resolution professional for the purposes of the fresh start process on the basis of the recommendation by the Board.
(5) The Adjudicating Authority may give directions to the resolution professional replaced under sub-section (4)—
(a) to share all information with the new resolution professional in respect of the fresh start process; and
(b) to co-operate with the new resolution professional as may be required.
Section 90 Directions for compliances of restrictions, etc.
(1) The resolution professional may apply to the Adjudicating Authority for any of the following directions, namely:—
(a) compliance of any restrictions referred to in sub-section (3) of section 85, in case of non-compliance by the debtor; or
(b) compliance of the duties of the debtor referred to in section 88, in case of non-compliance by the debtor.
(2) The resolution professional may apply to the Adjudicating Authority for directions in relation to any other matter under this Chapter for which no specific provisions have been made.
(a) compliance of any restrictions referred to in sub-section (3) of section 85, in case of non-compliance by the debtor; or
(b) compliance of the duties of the debtor referred to in section 88, in case of non-compliance by the debtor.
(2) The resolution professional may apply to the Adjudicating Authority for directions in relation to any other matter under this Chapter for which no specific provisions have been made.
Section 91 Revocation of order admitting application.
(1) The resolution professional may submit an application to the Adjudicating Authority seeking revocation of its order made under section 84 on the following grounds, namely :—
(a) if due to any change in the financial circumstances of the debtor, the debtor is ineligible for a fresh start process; or
(b) non-compliance by the debtor of the restrictions imposed under sub-section (3) of section 85; or
(c) if the debtor has acted in a mala fide manner and has wilfully failed to comply with the provisions of this Chapter.
(2) The Adjudicating Authority shall, within fourteen days of the receipt of the application under subsection
(1), may by order admit or reject the application.
(3) On passing of the order admitting the application referred to in sub-section (1) , the moratorium and the fresh start process shall cease to have effect.
(4) A copy of the order passed by the Adjudicating Authority under this section shall be provided to the Board for the purpose of recording an entry in the register referred to in section 196.
(a) if due to any change in the financial circumstances of the debtor, the debtor is ineligible for a fresh start process; or
(b) non-compliance by the debtor of the restrictions imposed under sub-section (3) of section 85; or
(c) if the debtor has acted in a mala fide manner and has wilfully failed to comply with the provisions of this Chapter.
(2) The Adjudicating Authority shall, within fourteen days of the receipt of the application under subsection
(1), may by order admit or reject the application.
(3) On passing of the order admitting the application referred to in sub-section (1) , the moratorium and the fresh start process shall cease to have effect.
(4) A copy of the order passed by the Adjudicating Authority under this section shall be provided to the Board for the purpose of recording an entry in the register referred to in section 196.
Section 92 Discharge order.
(1) The resolution professional shall prepare a final list of qualifying debts and submit such list to the Adjudicating Authority at least seven days before the moratorium period comes to an end.
(2) The Adjudicating Authority shall pass a discharge order at the end of the moratorium period for discharge of the debtor from the qualifying debts mentioned in the list under sub-section (1).
(3) Without prejudice to the provisions of sub-section (2), the Adjudicating Authority shall discharge the debtor from the following liabilities, namely:
(a) penalties in respect of the qualifying debts from the date of application till the date of the discharge order;
(b) interest including penal interest in respect of the qualifying debts from the date of application till the date of the discharge order; and
(c) any other sums owed under any contract in respect of the qualifying debts from the date of application till the date of the discharge order.
(4) The discharge order shall not discharge the debtor from any debt not included in sub-section (2) and from any liability not included under sub-section (3).
(5) The discharge order shall be forwarded to the Board for the purpose of recording an entry in the register referred to in section 196.
(6) A discharge order under sub-section (2) shall not discharge any other person from any liability in respect of the qualifying debts.
(2) The Adjudicating Authority shall pass a discharge order at the end of the moratorium period for discharge of the debtor from the qualifying debts mentioned in the list under sub-section (1).
(3) Without prejudice to the provisions of sub-section (2), the Adjudicating Authority shall discharge the debtor from the following liabilities, namely:
(a) penalties in respect of the qualifying debts from the date of application till the date of the discharge order;
(b) interest including penal interest in respect of the qualifying debts from the date of application till the date of the discharge order; and
(c) any other sums owed under any contract in respect of the qualifying debts from the date of application till the date of the discharge order.
(4) The discharge order shall not discharge the debtor from any debt not included in sub-section (2) and from any liability not included under sub-section (3).
(5) The discharge order shall be forwarded to the Board for the purpose of recording an entry in the register referred to in section 196.
(6) A discharge order under sub-section (2) shall not discharge any other person from any liability in respect of the qualifying debts.
Section 93 Standard of conduct.
The resolution professional shall perform his functions and duties in compliance with the code of conduct provided under section 208.
Section 94 Application by debtor to initiate insolvency resolution process.
(1) A debtor who commits a default may apply, either personally or through a resolution professional, to the Adjudicating Authority for initiating the insolvency resolution process, by submitting an application.
(2) Where the debtor is a partner of a firm, such debtor shall not apply under this Chapter to the Adjudicating Authority in respect of the firm unless all or a majority of the partners of the firm file the application jointly.
(3) An application under sub-section (1) shall be submitted only in respect of debts which are not excluded debts.
(4) A debtor shall not be entitled to make an application under sub-section (1) if he is—
(a) an undischarged bankrupt;
(b) undergoing a fresh start process;
(c) undergoing an insolvency resolution process; or
(d) undergoing a bankruptcy process.
(5) A debtor shall not be eligible to apply under sub-section (1) if an application under this Chapter has been admitted in respect of the debtor during the period of twelve months preceding the date of submission of the application under this section.
(6) The application referred to in sub-section (1) shall be in such form and manner and accompanied with such fee as may be prescribed.
(2) Where the debtor is a partner of a firm, such debtor shall not apply under this Chapter to the Adjudicating Authority in respect of the firm unless all or a majority of the partners of the firm file the application jointly.
(3) An application under sub-section (1) shall be submitted only in respect of debts which are not excluded debts.
(4) A debtor shall not be entitled to make an application under sub-section (1) if he is—
(a) an undischarged bankrupt;
(b) undergoing a fresh start process;
(c) undergoing an insolvency resolution process; or
(d) undergoing a bankruptcy process.
(5) A debtor shall not be eligible to apply under sub-section (1) if an application under this Chapter has been admitted in respect of the debtor during the period of twelve months preceding the date of submission of the application under this section.
(6) The application referred to in sub-section (1) shall be in such form and manner and accompanied with such fee as may be prescribed.
Section 95 Application by creditor to initiate insolvency resolution process.
(1) A creditor may apply either by himself, or jointly with other creditors, or through a resolution professional to the Adjudicating Authority for initiating an insolvency resolution process under this section by submitting an application.
(2) A creditor may apply under sub-section (1) in relation to any partnership debt owed to him for initiating an insolvency resolution process against—
(a) any one or more partners of the firm; or
(b) the firm.
(3) Where an application has been made against one partner in a firm, any other application against another partner in the same firm shall be presented in or transferred to the Adjudicating Authority in which the first mentioned application is pending for adjudication and such Adjudicating Authority may give such directions for consolidating the proceedings under the applications as it thinks just.
(4) An application under sub-section (1) shall be accompanied with details and documents relating to—
(a) the debts owed by the debtor to the creditor or creditors submitting the application for insolvency resolution process as on the date of application;
(b) the failure by the debtor to pay the debt within a period of fourteen days of the service of the notice of demand; and
(c) relevant evidence of such default or non-repayment of debt.
(5) The creditor shall also provide a copy of the application made under sub-section (1) to the debtor.
(6) The application referred to in sub-section (1) shall be in such form and manner and accompanied by such fee as may be prescribed.
(7) The details and documents required to be submitted under sub-section (4) shall be such as may be specified.
(2) A creditor may apply under sub-section (1) in relation to any partnership debt owed to him for initiating an insolvency resolution process against—
(a) any one or more partners of the firm; or
(b) the firm.
(3) Where an application has been made against one partner in a firm, any other application against another partner in the same firm shall be presented in or transferred to the Adjudicating Authority in which the first mentioned application is pending for adjudication and such Adjudicating Authority may give such directions for consolidating the proceedings under the applications as it thinks just.
(4) An application under sub-section (1) shall be accompanied with details and documents relating to—
(a) the debts owed by the debtor to the creditor or creditors submitting the application for insolvency resolution process as on the date of application;
(b) the failure by the debtor to pay the debt within a period of fourteen days of the service of the notice of demand; and
(c) relevant evidence of such default or non-repayment of debt.
(5) The creditor shall also provide a copy of the application made under sub-section (1) to the debtor.
(6) The application referred to in sub-section (1) shall be in such form and manner and accompanied by such fee as may be prescribed.
(7) The details and documents required to be submitted under sub-section (4) shall be such as may be specified.
Section 96 Interim moratorium.
(1) When an application is filed under section 94 or section 95—
(a) an interim-moratorium shall commence on the date of the application in relation to all the debts and shall cease to have effect on the date of admission of such application; and
(b) during the interim-moratorium period—
(i) any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and
(ii) the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt.
(2) Where the application has been made in relation to a firm, the interim-moratorium under sub-section (1) shall operate against all the partners of the firm as on the date of the application.
(3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
(a) an interim-moratorium shall commence on the date of the application in relation to all the debts and shall cease to have effect on the date of admission of such application; and
(b) during the interim-moratorium period—
(i) any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and
(ii) the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt.
(2) Where the application has been made in relation to a firm, the interim-moratorium under sub-section (1) shall operate against all the partners of the firm as on the date of the application.
(3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.