Important Sections of Insolvency and Bankruptcy Code (IBC), 2016

Here are some of the most important sections of the IBC, 2016:

Section 7: This section provides for the initiation of insolvency proceedings by a financial creditor.

Section 9: This section provides for the initiation of insolvency proceedings by an operational creditor.

Section 10: This section provides for the initiation of insolvency proceedings by the corporate debtor.

Section 12: This section lays down the time limit for completion of the resolution process.

Section 12A: This section deals with the withdrawal of IBC applications filed under Section 7, 9 and 10.

Section 13: This section deals with declaration of the moratorium period and public announcement of the initiation of the Corporate Insolvency Resolution Process, call for claims and appointment of interim resolution professional.

Section 14: This section lays down the dos and don’ts once the moratorium period kicks in.

Section 17: This section elaborates that from the date of appointment of interim resolution professional, the management of the affairs of the corporate debtor shall vest in her.

Section 18: This section deals with the role and duties of the interim resolution professional, who is responsible for conducting the corporate insolvency resolution process.

Section 19: This section says that the personnel of the corporate debtor, its promoters or any other person associated with the management of the corporate debtor shall extend all assistance and cooperation to the interim resolution professional as may be required by him in managing the affairs of the corporate debtor.

Section 21: This Section deals with the constitution and composition of the Committee of Creditors.

Section 22: This Section deals with the either reappointment of the interim resolution professional as resolution professional or replacing the IRP with a new resolution professional.

Section 25: This Section deals with the duties of resolution professional.

Section 29A: The Section provides extensive disqualification criteria for resolution applicants enlisting those who shall not be eligible to submit a resolution plan under the IBC.

Section 30: This section deals submission of resolution plan and the important aspects of the resolution plan.

Section 31: This section lays down the process for approval or rejection of the resolution plan by the adjudicating agency.

Section 32A: This section says that the liability of a corporate debtor for an offence committed prior to the commencement of the corporate insolvency resolution process shall cease, and the corporate debtor shall not be prosecuted for such an offence from the date the resolution plan has been approved by the Adjudicating Authority under section 31.

Section 33: This section lays down the conditions under which the adjudicating agency might initiate liquidation of the corporate debtor.

Section 43-51 : These sections lays down rules for avoidance transactions.

Section 54: This section lays down the rules for dissolution of corporate debtor under the liquidation process.

Section 54A: This Section says that corporate debtors are eligible for pre-packaged insolvency resolution process if they are classified as a micro, small or medium enterprise under sub-section (1) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006. (Section 54A-O deals with the prepackaged insolvency)

Section 55-58: These sections deal with fast track corporate insolvency resolution process, the eligibility and process of the fast track insolvency resolution.

Section 59:  This Section deal with voluntarily liquidation proceedings of a corporate person.

Section 60: This section identifies the Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors.

Section 61: This section provides talks about the appeals and appellate tribunal.

Section 65: This section deal with fraudulent or malicious initiation of proceedings and the punishments for such initiating such a fraudulent proceedings.

Section 78: This section applies to matters relating to fresh start, insolvency and bankruptcy of individuals and partnership firms.

Section 80: This section deals with eligibilities for applying for the Fresh Start Process for individual insolvency cases.

Section 84: This deals with admission or rejection of a Fresh Start Process application by the adjudicating authority.

Section 85: This section elaborates the effects of admission of a Fresh Start Process application. The section lays down the moratorium period, the dos and don’ts for the insolvent person during the moratorium period.

Section 94: This section elaborates the due process and conditions for an debtor, who is a partner in a firm, to file an insolvency application.

Section 95: This section elaborates the due process and conditions for a creditor to file an insolvency application against partners of a firm or the firm.

These sections provide the legal framework for the administration and enforcement of the IBC, and play a crucial role in ensuring the effective implementation of the insolvency and bankruptcy resolution process in India.

For more details see: IBC Act

Also See: Landmark Judgements