The Insolvency and Bankruptcy Code, 2016.

(1) This Code may be called the Insolvency and Bankruptcy Code, 2016. (2) It extends to the whole of India: 1* * * * *. (3) It shall come into force on such date2 as the Central Government may, by notification in the Official Gazette, appoint: 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.

The provisions of this Code shall apply to-- (a) any company incorporated under the Companies Act, 2013 (18 of 2013) or under any previouscompany law; (b) any other company governed by any special Act for the time being in force, except in so far asthe said provisions are inconsistent with the provisions of such special Act; (c) any Limited Liability Partnership incorporated under the Limited Liability PartnershipAct, 2008 (6 of 2009); (d) such other body incorporated under any law for the time being in force, as the CentralGovernment may, by notification, specify in this behalf; 1*** 2[(e) personal guarantors to corporate debtors; (f) partnership firms and proprietorship firms; and (g) individuals, other than persons referred to in clause (e),]

In this Code, unless the context otherwise requires,-- (1) "Board" means the Insolvency and Bankruptcy Board of India established undersub-section (1) of section 188; (2) "bench" means a bench of the Adjudicating Authority; (3) "bye-laws" mean the bye-laws made by the insolvency professional agency under section 205; (4) "charge" means an interest or lien created on the property or assets of any person or any of itsundertakings or both, as the case may be, as security and includes a mortgage; (5) "Chairperson" means the Chairperson of the Board; (6) "claim" means-- (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed,undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if suchbreach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed,matured, unmatured, disputed, undisputed, secured or unsecured; (7) "corporate person" means a company as defined in clause (20) of section 2 of the CompaniesAct, 2013 (18 of 2013), a limited liability partnership, as defined in clause (n) of sub-section (1) ofsection 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or any other person incorporatedwith limited liability under any law for the time being in force but shall not include any financialservice provider; (8) "corporate debtor" means a corporate person who owes a debt to any person; (9) "core services" means services rendered by an information utility for-- (a) accepting electronic submission of financial information in such form and manner as may bespecified; (b) safe and accurate recording of financial information; (c) authenticating and verifying the financial information submitted by a person; and (d) providing access to information stored with the information utility to persons as may bespecified; (10) "creditor" means any person to whom a debt is owed and includes a financial creditor, anoperational creditor, a secured creditor, an unsecured creditor and a decree-holder; (11) "debt" means a liability or obligation in respect of a claim which is due from any person andincludes a financial debt and operational debt; (12) "default" means non-payment of debt when whole or any part or instalment of the amount ofdebt has become due and payable and is not 1[paid] by the debtor or the corporate debtor, as the casemay be; (13) "financial information", in relation to a person, means one or more of the followingcategories of information, namely:-- (a) records of the debt of the person; (b) records of liabilities when the person is solvent; (c) records of assets of person over which security interest has been created; (d) records, if any, of instances of default by the person against any debt; (e) records of the balance sheet and cash-flow statements of the person; and (f) such other information as may be specified; (14) "financial institution" means-- (a) a scheduled bank; (b) financial institution as defined in section 45-I of the Reserve Bank of IndiaAct, 1934 (2 of 1934); (c) public financial institution as defined in clause (72) of section 2 of the CompaniesAct, 2013 (18 of 2013); and (d) such other institution as the Central Government may by notification specify as a financialinstitution; (15) "financial product" means securities, contracts of insurance, deposits, credit arrangementsincluding loans and advances by banks and financial institutions, retirement benefit plans, smallsavings 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 asmay be prescribed; (16) "financial service" includes any of the following services, namely: (a) accepting of deposits; (b) safeguarding and administering assets consisting of financial products, belonging toanother person, or agreeing to do so; (c) effecting contracts of insurance; (d) offering, managing or agreeing to manage assets consisting of financial productsbelonging to another person; (e) rendering or agreeing, for consideration, to render advice on or soliciting for the purposesof-- (i) buying, selling, or subscribing to, a financial product; (ii) availing a financial service; or (iii) exercisfing any right associated with a financial product or financial service; (f) establishing or operating an investment scheme; (g) maintaining or transferring records of ownership of a financial product; (h) underwriting the issuance or subscription of a financial product; or (i) selling, providing, or issuing stored value or payment instruments or providing paymentservices; (17) "financial service provider" means a person engaged in the business of providing financialservices in terms of authorisation issued or registration granted by a financial sector regulator; (18) "financial sector regulator" means an authority or body constituted under any law for thetime being in force to regulate services or transactions of financial sector and includes the ReserveBank of India, the Securities and Exchange Board of India, the Insurance Regulatory andDevelopment Authority of India, the Pension Fund Regulatory Authority and such other regulatoryauthorities as may be notified by the Central Government; (19) "insolvency professional" means a person enrolled under section 206 with an insolvencyprofessional agency as its member and registered with the Board as an insolvency professional undersection 207; (20) "insolvency professional agency" means any person registered with the Board undersection 201 as an insolvency professional agency; (21) "information utility" means a person who is registered with the Board as an informationutility under section 210; (22) "notification" means a notification published in the Official Gazette, and the terms notifiedand "notify" shall be construed accordingly; (23) "person" includes-- (a) an individual; (b) a Hindu Undivided Family; (c) a company; (d) a trust; (e) a partnership; (f) a limited liability partnership; and (g) any other entity established under a statute, and includes a person resident outside India; (24) "person resident in India" shall have the meaning as assigned to such term in clause (v) ofsection 2 of the Foreign Exchange Management Act, 1999 (42 of 1999); (25) "person resident outside India" means a person other than a person resident in India; (26) "prescribed" means prescribed by rules made by the Central Government; (27) "property" includes money, goods, actionable claims, land and every description of propertysituated in India or outside India and every description of interest including present or future or vestedor contingent interest arising out of, or incidental to, property; (28) "regulations" means the regulations made by the Board under this Code; (29) "Schedule" means the Schedule annexed to this Code; (30) "secured creditor" means a creditor in favour of whom security interest is created; (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 anobligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any otheragreement or arrangement securing payment or performance of any obligation of any person: Provided that security interest shall not include a performance guarantee; (32) "specified" means specified by regulations made by the Board under this Code and the term"specify" shall be construed accordingly; (33) "transaction" includes a agreement or arrangement in writing for the transfer of assets, orfunds, goods or services, from or to the corporate debtor; (34) "transfer" includes sale, purchase, exchange, mortgage, pledge, gift, loan or any other formof transfer of right, title, possession or lien; (35) "transfer of property" means transfer of any property and includes a transfer of any interestin the property and creation of any charge upon such property; (36) "workman" shall have the same meaning as assigned to it in clause (s) of section 2 of theIndustrial Disputes Act, 1947 (14 of 1947); (37) words and expressions used but not defined in this Code but defined in the Indian ContractAct, 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 LimitedLiability Partnership Act, 2008 (6 of 2009) and the Companies Act, 2013 (18 of 2013), shall have themeanings respectively assigned to them in those Acts.

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]: 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. 2[Provided further that the Central Government may, by notification, specify such minimum amountof 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.]

In this Part, unless the context otherwise requires,-- (1) Adjudicating Authority, for the purposes of this Part, means National Company LawTribunal constituted under section 408 of the Companies Act, 2013 (18 of 2013); (2) auditor means a chartered accountant certified to practice as such by the Institute ofChartered Accountants of India under section 6 of the Chartered Accountants Act, 1949 (38 of 1949); 1[(2A) “base resolution plan” means a resolution plan provided by the corporate debtor under clause (c) of sub-section (4) of section 54A;] (3) Chapter means a Chapter under this Part; (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 LiabilityPartnership; (5) corporate applicant means-- (a) corporate debtor; or (b) a member or partner of the corporate debtor who is authorised to make an application forthe corporate insolvency resolution processs 1[or the pre-packaged insolvency resolution process, as the case may be,] under the constitutional document of the corporatedebtor; or (c) an individual who is in charge of managing the operations and resources of the corporatedebtor; or (d) a person who has the control and supervision over the financial affairs of the corporatedebtor; 2[(5A) corporate guarantor means a corporate person who is the surety in a contract ofguarantee to a corporate debtor;] (6) dispute includes a suit or arbitration proceedings relating to-- (a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty; (7) financial creditor means any person to whom a financial debt is owed and includes a personto whom such debt has been legally assigned or transferred to; (8) financial debt means a debt along with interest, if any, which is disbursed against theconsideration for the time value of money and includes-- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or itsde-materialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes,debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which isdeemed as a finance or capital lease under the Indian Accounting Standards or such otheraccounting standards as may be prescribed; (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 purchaseagreement, having the commercial effect of a borrowing; 3[Explanation----For the purposes of this sub-clause,-- (i) any amount raised from an allottee under a real estate project shall be deemed to be anamount having the commercial effect of a borrowing; and (ii) the expressions, allottee and real estate project shall have the meaningsrespectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate(Regulation and Development) Act, 2016 (16 of 2016);] (g) any derivative transaction entered into in connection with protection against or benefitfrom 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; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentaryletter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of theitems referred to in sub-clauses (a) to (h) of this clause; (9) financial position, in relation to any person, means the financial information of a person ason a certain date; (10) information memorandum means a memorandum prepared by resolution professionalunder sub-section (1) of section 29; (11) initiation date means the date on which a financial creditor, corporate applicant oroperational creditor, as the case may be, makes an application to the Adjudicating Authority forinitiating corporate insolvency resolution process 4[or pre-packaged insolvency resolution process, asthe case may be]; (12) insolvency commencement date means the date of admission of an application forinitiating corporate insolvency resolution process by the Adjudicating Authority under sections 7, 9 orsection 10, as the case may be; 3* * * * * (13) insolvency resolution process costs means-- (a) the amount of any interim finance and the costs incurred in raising such finance; (b) the fees payable to any person acting as a resolution professional; (c) any costs incurred by the resolution professional in running the business of the corporatedebtor as a going concern; (d) any costs incurred at the expense of the Government to facilitate the insolvency resolutionprocess; and (e) any other costs as may be specified by the Board; (14) insolvency resolution process period means the period of one hundred and eighty daysbeginning from the insolvency commencement date and ending on one hundred and eightieth day; (15) interim finance means any financial debt raised by the resolution professional during theinsolvency 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]; (16) liquidation cost means any cost incurred by the liquidator during the period of liquidationsubject to such regulations, as may be specified by the Board; (17) liquidation commencement date means the date on which proceedings for liquidationcommence in accordance with section 33 or section 59, as the case may be; (18) liquidator means an insolvency professional appointed as a liquidator in accordance withthe provisions of Chapter III or Chapter V of this Part, as the case may be; (19) officer for the purposes of 5[Chapter VI and] Chapter VII of this Part, means an officer who is in default, asdefined in clause (60) of section 2 of the Companies Act, 2013 (18 of 2013) or a designated partner asdefined in clause (j) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), as thecase may be; (20) operational creditor means a person to whom an operational debt is owed and includes anyperson to whom such debt has been legally assigned or transferred; (21) operational debt means a claim in respect of the provision of goods or services includingemployment or a debt in respect of the 4[payment] of dues arising under any law for the time being inforce and payable to the Central Government, any State Government or any local authority; (22) personal guarantor means an individual who is the surety in a contract of guarantee to acorporate debtor; (23) personnel includes the directors, managers, key managerial personnel, designated partnersand employees, if any, of the corporate debtor; 5](23A) “preliminary information memorandum” means a memorandum submitted by the corporate debtor under clause (b) of sub-section (1) of section 54G; (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; (23C) “pre-packaged insolvency resolution process costs” means (a) the amount of any interim finance and the costs incurred in raising such finance; (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; (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; (d) any costs incurred at the expense of the Government to facilitate the pre-packaged insolvency resolution process; and (e) any other costs as may be specified; (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;] (24) related party, in relation to a corporate debtor, means-- (a) a director or partner of the corporate debtor or a relative of a director or partner of thecorporate debtor; (b) a key managerial personnel of the corporate debtor or a relative of a key managerialpersonnel of the corporate debtor; (c) a limited liability partnership or a partnership firm in which a director, partner, or managerof the corporate debtor or his relative is a partner; (d) a private company in which a director, partner or manager of the corporate debtor is adirector and holds along with his relatives, more than two per cent. of its share capital; (e) a public company in which a director, partner or manager of the corporate debtor is adirector and holds along with relatives, more than two per cent. of its paid-up share capital; (f) any body corporate whose board of directors, managing director or manager, in theordinary course of business, acts on the advice, directions or instructions of a director, partner ormanager of the corporate debtor; (g) any limited liability partnership or a partnership firm whose partners or employees in theordinary course of business, acts on the advice, directions or instructions of a director, partner ormanager of the corporate debtor; (h) any person on whose advice, directions or instructions, a director, partner or manager ofthe corporate debtor is accustomed to act; (i) a body corporate which is a holding, subsidiary or an associate company of the corporatedebtor, or a subsidiary of a holding company to which the corporate debtor is a subsidiary; (j) any person who controls more than twenty per cent. of voting rights in the corporatedebtor on account of ownership or a voting agreement; (k) any person in whom the corporate debtor controls more than twenty per cent. of votingrights on account of ownership or a voting agreement; (l) any person who can control the composition of the board of directors or correspondinggoverning body of the corporate debtor; (m) any person who is associated with the corporate debtor on account of-- (i) participation in policy making processes of the corporate debtor; or (ii) having more than two directors in common between the corporate debtor and suchperson; or (iii) interchange of managerial personnel between the corporate debtor and such person;or (iv) provision of essential technical information to, or from, the corporate debtor; 8[(24A) related party, in relation to an individual, means-- (a) a person who is a relative of the individual or a relative of the spouse of theindividual; (b) a partner of a limited liability partnership, or a limited liability partnership or apartnership firm, in which the individual is a partner; (c) a person who is a trustee of a trust in which the beneficiary of the trust includes theindividual, or the terms of the trust confers a power on the trustee which may be exercised forthe benefit of the individual; (d) a private company in which the individual is a director and holds along with hisrelatives, more than two per cent. of its share capital; (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; (f) a body corporate whose board of directors, managing director or manager, in theordinary 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 theordinary course of business, act on the advice, directions or instructions of the individual; (h) a person on whose advice, directions or instructions, the individual is accustomed toact; (i) a company, where the individual or the individual along with its related party, ownmore than fifty per cent. of the share capital of the company or controls the appointment ofthe board of directors of the company. Explanation.--For the purposes of this clause,-- (a) relative, with reference to any person, means anyone who is related to another, inthe following manner, namely:-- (i) members of a Hindu Undivided Family, (ii) husband, (iii) wife, (iv) father, (v) mother, (vi) son, (vii) daughter, (viii) sons daughter and son, (ix) daughters daughter and son, (x) grandsons daughter and son, (xi) granddaughters daughter and son, (xii) brother, (xiii) sister, (xiv) brothers son and daughter, (xv) sisters son and daughter, (xvi) fathers father and mother, (xvii) mothers father and mother, (xviii) fathers brother and sister, (xix) mothers brother and sister, and (b) wherever the relation is that of a son, daughter, sister or brother, their spouses shallalso be included;. 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]; (26) resolution plan means a plan proposed by 11[resolution applicant] for insolvency resolutionof the corporate debtor as a going concern in accordance with Part II; 12[Explanation.--For the removal of doubts, it is hereby clarified that a resolution plan mayinclude provisions for the restructuring of the corporate debtor, including by way of merger,amalgamation and demerger;] (27) resolution professional, for the purposes of this Part, means an insolvency professionalappointed to conduct the corporate insolvency resolution process 10[or the pre-packaged insolvency resolution process, as the case may be,] and includes an interim resolutionprofessional; and (28) voting share means the share of the voting rights of a single financial creditor in thecommittee of creditors which is based on the proportion of the financial debt owed to such financialcreditor in relation to the financial debt owed by the corporate debtor.