Practice note

Insolvency and Bankruptcy Proceedings under the IBC, 2016

The Insolvency and Bankruptcy Code, 2016 provides a time-bound process for the resolution of insolvency of corporate persons, partnership firms and individuals. Corporate insolvency matters are adjudicated by the National Company Law Tribunal (NCLT), with appeals to the National Company Law Appellate Tribunal (NCLAT) and thence to the Supreme Court on questions of law.

Statement of law as on 19 October 2026Lex Meridian · Advocates & Legal Consultants

In brief

A financial creditor may initiate the corporate insolvency resolution process (CIRP) under Section 7, an operational creditor under Section 9 after a demand notice under Section 8, and the corporate debtor itself under Section 10.
The minimum amount of default for initiating the CIRP is one crore rupees.
On admission, the moratorium under Section 14 bars the institution or continuation of suits and proceedings against the corporate debtor.
Applications under Sections 7 and 9 are governed by Article 137 of the Limitation Act, 1963, that is, three years from the date of default.

Governing law

Insolvency and Bankruptcy Code, 2016: Sections 3(11) and 3(12) (debt and default), 5(8) and 5(21) (financial and operational debt), 7 to 10 (initiation), 12 and 12A (timelines and withdrawal), 14 (moratorium), 29A (ineligible resolution applicants), 30 and 31 (resolution plan), 33 onwards (liquidation), 61 (appeal), 95 to 100 (personal guarantors).
IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016: Submission of claims, the Committee of Creditors, the information memorandum and resolution plans.
Limitation Act, 1963: Article 137 and Section 18 (acknowledgment of liability).

How the matter is handled

Stage	Steps taken	Indicative time
1. Assessment	Verification of the debt, the default, the threshold, limitation and any pre-existing dispute; choice between the Code and other recovery remedies.	First week
2. Demand or application	Demand notice under Section 8 for operational creditors, or application under Section 7, 9 or 10 in the prescribed form with evidence of default.	Filing
3. Admission	Hearing before the NCLT; on admission, declaration of the moratorium and appointment of the interim resolution professional.	Depends on the Bench
4. CIRP	Submission of claims, constitution of the Committee of Creditors, invitation and evaluation of resolution plans.	180 days, extendable; outer limit of 330 days
5. Plan or liquidation	Approval of the resolution plan under Section 31, or order of liquidation; appeal to the NCLAT under Section 61 within thirty days.	Depends on the Bench

Leading judicial authorities

Swiss Ribbons Pvt. Ltd. v. Union of India
(2019) 4 SCC 17
Upheld the constitutional validity of the Code, emphasising that its primary object is the resolution and revival of the corporate debtor and not mere recovery.
Innoventive Industries Ltd. v. ICICI Bank
(2018) 1 SCC 407
Under Section 7, the Adjudicating Authority need only be satisfied that a debt is due and a default has occurred, whereupon the application must be admitted unless it is incomplete.
Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd.
(2018) 1 SCC 353
An application by an operational creditor must be rejected if a plausible pre-existing dispute exists; the Tribunal need not be satisfied that the defence is likely to succeed.
Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta
(2020) 8 SCC 531
The commercial wisdom of the Committee of Creditors in approving a resolution plan and in the distribution thereunder is paramount and not justiciable, subject to the requirements of Section 30(2).
Dilip B. Jiwrajka v. Union of India
Supreme Court, 9 November 2023
Upheld the provisions for insolvency resolution of personal guarantors (Sections 95 to 100); no adjudicatory hearing is required before the appointment of the resolution professional.
Glas Trust Company LLC v. BYJU Raveendran
Supreme Court, 23 October 2024
Once the Committee of Creditors is constituted, the CIRP may be withdrawn only under Section 12A with the approval of ninety per cent of its voting share; the NCLAT cannot bypass that procedure through its inherent powers.

Latest judgments & updates

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Recent judgments of the Supreme Court, the High Courts and tribunals, and court reports, concerning Insolvency & Bankruptcy. Updated automatically through the day.

Documents to keep ready

Loan or supply agreements and invoices
Statement of account and record of default, including any information-utility record
Demand notice and the reply, if any
Board resolution and authorisation

Frequently asked questions

Can a promoter submit a resolution plan?

Only if not ineligible under Section 29A, which disqualifies, among others, a person in control of a corporate debtor whose account has been classified as a non-performing asset for one year or more, unless the overdue amounts are paid before submission of the plan.

Does the moratorium protect personal guarantors?

No. The moratorium under Section 14 operates in favour of the corporate debtor; proceedings against a personal guarantor are governed separately by Sections 95 to 100.

This note states the law in general terms as on 19 October 2026. It is not legal advice and does not create an advocate–client relationship. Judgments are summarised for reference and should be read in full from the official reports; the facts of each matter may alter the position.

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