Background & Significance
Why the IBC (Amendment) Act, 2026 Is a Landmark Reform
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 — No. 6 of 2026 — having received Presidential assent on April 6, 2026, is the most comprehensive revision of India’s insolvency framework since the original IBC was enacted in 2016. Originally introduced as Bill No. 107-F of 2025, it was passed by both Houses of Parliament and comprises 72 amendment clauses covering virtually every stage of the insolvency and bankruptcy lifecycle from initial application to dissolution.
Three persistent problems drove the 2026 overhaul: (1) excessive delays in NCLT adjudication timelines with no accountability mechanism; (2) structural gaps for certain debtor categories — SME clusters operating as groups, and entities with cross-border exposure; and (3) governance deficiencies in how insolvency professionals, liquidators, and Committees of Creditors (CoC) conduct themselves during proceedings.
Commencement Note: The Act shall come into force on such date(s) as the Central Government appoints by notification in the Official Gazette — with the explicit provision that different commencement dates may be appointed for different provisions. Several amendments also expressly state they apply to ongoing proceedings as on the commencement date where specific conditions are met. Corpzo tracks all commencement notifications and will update clients accordingly.
72 amendments
Most comprehensive IBC overhaul since 2016
The 2026 Act touches definitions, CIRP timelines, withdrawal, resolution plan approval, liquidation, avoidance transactions, pre-pack insolvency, voluntary liquidation, the disciplinary framework for IPs, the IBC fund, and electronic portal provisions.
Retrospective applicability
Several provisions apply to ongoing proceedings
Provisions relating to the CoC supervising liquidation (Sec 21(11)), CIRP restoration (Sec 33(1A)), secured creditor timelines (Sec 52(2)), and resolution plan claimant extinguishment (Sec 31(6)) contain specific provisions on their application to ongoing cases.
New legal concepts
Avoidance transaction, service provider, CIRP
The Act formally defines “avoidance transaction,” “service provider,” “fraudulent or wrongful trading,” and “registered valuer” — resolving interpretive ambiguities that had generated substantial NCLT and Supreme Court litigation.
Decriminalisation
Sections 74 & 76 omitted; civil penalties replace criminal
Consistent with the broader legislative trend, criminal sanctions for certain IBC violations in Sections 74 and 76 are replaced with a civil penalty regime under the overhauled Section 235A, with NCLT having enhanced penalty powers.
Sections 2, 3 & 5 — New Definitions
New Statutory Definitions That Reshape IBC Interpretation
The Act inserts and clarifies multiple critical definitions, many resolving interpretive disputes litigated at the NCLT, NCLAT, and Supreme Court levels:
Sec 3(27A) — Inserted
Registered Valuer
Defined by cross-reference to Chapter XVII of the Companies Act, 2013 — aligning IBC with IBBI’s Registered Valuers framework. Addresses valuation ambiguities during CIRP and liquidation proceedings.
Sec 3(31) — Explanation Inserted
Security Interest Clarified
Security interest requires creation by agreement between two or more parties. Expressly excludes interests created merely by operation of law — resolving disputes about government statutory charges claiming secured creditor priority.
Sec 3(31A) — Inserted
Service Provider
Omnibus definition covering IPs, insolvency professional agencies, information utilities, registered valuers, and notified persons — enabling unified IBBI regulation, investigation, and discipline of all key ecosystem participants.
Sec 5(2A) — Inserted
Avoidance Transaction
Formally defined as transactions covered under Sections 43 (preferential), 45 (undervalued), 49 (extortionate credit), and 50 — providing a single statutory term replacing inconsistent references across the Code.
Sec 5(9A) — Inserted
Fraudulent or Wrongful Trading
Formally defined by reference to Section 66 — now extended to include liquidators alongside resolution professionals. Enables consistent use across all provisions and expands accountability for wrongful trading to the liquidation stage.
Sec 5(26) — Expanded
Resolution Plan — Asset Sale Included
Expanded to include sale of one or more assets through one or more plans by one or more resolution applicants. Opens the door for partial asset-specific resolutions — a significant toolkit expansion for complex CIRP proceedings.
Insolvency Commencement Date Clarified (Sec 5(11)): Where multiple CIRP applications are pending against the same corporate debtor on the insolvency commencement date, the initiation date is the date of the first application. This has significant implications for the look-back period for avoidance transactions under Sections 43, 46, and 50.
Sections 7, 9, 10, 12A, 31, 33, 54 — Timeline Accountability
Mandatory CIRP Timeline Reforms — Adjudicating Authorities Must Record Reasons for Delay
The most practically impactful changes insert mandatory reasons-recording obligations across multiple sections. Where the NCLT does not pass an order within the specified period, it must now record reasons for delay in writing — creating formal accountability for what has been the IBC’s most persistent operational failure.
| Section | Stage | Prescribed Timeline | Delay Obligation |
|---|
| Sec 7(5) | Admit/reject financial creditor application | 14 days | Record reasons in writing |
| Sec 9(5) | Admit/reject operational creditor application | 14 days | Record reasons in writing |
| Sec 10(4) | Admit/reject corporate debtor application | 14 days | Record reasons in writing |
| Sec 12A(3) | Order on withdrawal application | 30 days | Record reasons in writing |
| Sec 31(2A) | Approve/reject resolution plan | 30 days | Record reasons in writing |
| Sec 33(2A) | Pass liquidation order | 30 days | Record reasons in writing |
| Sec 54(4) | Pass dissolution order | 30 days | Record reasons in writing |
Other Key CIRP Process Amendments
Section 7(5) overhauled
Cleaner admission/rejection criteria for financial creditors
Subsection (5) is substituted to provide: admit if default occurred and application is complete; reject otherwise. A 7-day rectification notice must precede rejection. Critically, Explanation I clarifies that where admission criteria are met, no other ground can be used to reject — ending NCLT discretion to reject on non-statutory grounds.
Section 7(5) Explanation II
IU default record is sufficient to establish default
Where a financial institution has furnished a record of default from an Information Utility with its application, such record is deemed sufficient for the NCLT to ascertain existence of default — significantly streamlining the admission process for bank creditors.
Section 12A overhauled
New withdrawal restrictions introduced
Withdrawal is now expressly barred before constitution of the CoC AND after the first invitation for submission of a resolution plan has been issued. This narrows the withdrawal window significantly, protecting the integrity of the resolution process against tactical withdrawals.
Section 31 — Split approval
Implementation approved first, distribution plan follows within 30 days
The NCLT may, on application by the RP with 66% CoC approval, first approve implementation of the resolution plan and thereafter approve the distribution plan within 30 days — enabling faster operational handover of businesses while distribution remains under review.
Section 31(5) — New
Licences and permits cannot be suspended after plan approval
Where a resolution plan is approved, licences, permits, registrations, quotas, concessions, and regulatory clearances associated with the plan cannot be suspended or terminated during the remaining period of such grants — a major protection for resolution applicants who acquire regulated businesses.
Section 31(6) — New
Claims against the corporate debtor extinguished on plan approval
Claims against the corporate debtor and its assets under any law prior to plan approval are extinguished. No further proceedings on such claims can be continued or instituted against the corporate debtor or its assets — including pending assessment proceedings. However, personal liability of promoters, guarantors, and persons with joint liability is unaffected.
Section 33 — CIRP Restoration & Liquidation Reforms
CIRP Restoration Mechanism & Major Liquidation Overhaul
The Amendment introduces a new mechanism to restore a CIRP that has reached liquidation triggers — providing one last opportunity for creditor-driven rescue before a company is sent to liquidation:
Section 33(1A) — CIRP Restoration (New): Before passing a liquidation order (where grounds in Clause (a) or (b) of Section 33(1) exist), the NCLT must consider an application by the CoC (minimum 66% voting share) to restore the CIRP. If restoration is granted, the CIRP can be continued for up to 120 days. If no resolution plan is received within the extended period, or the plan is rejected, the liquidation order must follow. Restoration can be granted only once. This applies to ongoing CIRPs as on the commencement date where a liquidation order has not yet been passed.
Liquidation Process — Key Reforms
Sec 21(11) — Inserted
CoC Supervises Liquidation
The Committee of Creditors, once constituted during CIRP, shall also supervise the conduct of the liquidation process by the liquidator under Chapter III. This is a fundamental governance reform — the CoC no longer exits the picture when liquidation begins.
Sec 34 — Substituted
NCLT Refers to IBBI for Liquidator Appointment
The NCLT must now refer to the IBBI for recommendation of an IP to be appointed as liquidator — removing the discretionary appointment power. Crucially, Sec 34(4) prevents the resolution professional of the CIRP from being appointed as liquidator for the same case, ensuring independence.
Sec 34A — New
CoC Can Replace Liquidator
At any time during liquidation, the CoC may resolve by 66% voting share to replace the liquidator with another IP. Upon application, the NCLT shall replace the liquidator if no disciplinary proceedings are pending against the proposed replacement.
Sec 33 Dissolution Option
CoC Can Vote to Dissolve Instead of Liquidate
The CoC can now vote to dissolve the corporate debtor rather than liquidate it — a faster wind-up option for cases with no realisable assets. Dissolution order must be passed by NCLT within 30 days of CoC’s decision. Surplus assets (after dissolution costs) are credited to the IBC Fund.
Sec 52(2) — Substituted
14-Day Deadline for Secured Creditor to Identify Assets
Secured creditors intending to realise their security interest outside liquidation estate must inform the liquidator within 14 days of the liquidation commencement date. Failure means deemed relinquishment. Where multiple secured creditors have interest over one asset, 66% consent is required to realise it.
Sec 54 — Timeline
180 Days to Complete Liquidation + 90-Day Extension
The liquidator must complete liquidation and apply for dissolution within 180 days of the liquidation commencement date. Extension up to 90 more days may be granted by NCLT on application with sufficient reasons. This replaces earlier open-ended liquidation timelines.
Sections 38-42 Omitted: Sections 38 to 42, which previously governed the procedure for submission and verification of claims in liquidation, are omitted. The liquidator is now instead required to maintain an updated list of claims under Section 35(1)(a) in a specified manner. This simplifies the claims framework and removes procedural duplication that had slowed liquidation proceedings.
New Chapter IV-A — Sections 58A to 58K
Creditor-Initiated Insolvency Resolution Process — A New Pathway for Targeted Debtors
The most structurally significant introduction in the 2026 Amendment is the entirely new Chapter IV-A: Creditor-Initiated Insolvency Resolution Process (Creditor-IRSP), replacing the omitted Chapter IV (Fast-Track CIRP). This is a bank-led, out-of-court initiated insolvency resolution mechanism for designated categories of corporate debtors — designed to be faster, lighter, and less court-driven than the traditional CIRP:
Eligible Debtors (Section 58A): The Central Government will notify the classes of corporate debtors eligible for the Creditor-IRSP. Eligibility criteria include: debtors with assets or income below specified levels; debtors with a specified class of creditors or amount of debt; or other notified categories. The process cannot be initiated against debtors already in CIRP/liquidation, or those that have undergone any insolvency process in the preceding 3 years.
How the Creditor-Initiated Process Works — Key Steps
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Sec 58B(2)(a) — First 51% Approval
Initiating Financial Creditor Obtains 51% Financial Creditor Approval
A financial creditor belonging to a notified class (expected to be banks/FIs) seeks 51% approval in value from other financial creditors of the same notified class — to proceed with initiating the Creditor-IRSP against the debtor.
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Sec 58B(2)(b) — 30-Day Notice to Debtor
Corporate Debtor Given 30-Day Notice & Right to Represent
The initiating financial creditor informs the corporate debtor of its intention and provides a minimum 30-day window to make any representation. This is a key debtor-protection mechanism absent from standard CIRP.
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Sec 58B(2)(c) — Second 51% Approval
Post-Representation: Second 51% Creditor Approval Within 30 Days
After considering the debtor’s representation, if the creditor continues to pursue initiation, fresh 51% creditor approval must be obtained within 30 days. Failure to obtain approval requires restarting from Step 1.
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Sec 58B(3) — IP Appointment
Resolution Professional Appointed; Process Commences with Public Announcement
The initiating financial creditor directly appoints an IP as Resolution Professional (no NCLT involvement needed at this stage). The RP makes a public announcement — the Creditor-IRSP is deemed to commence from the date of that announcement.
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Sec 58D — 150 Days + 45 Extension
Process Must Complete Within 150 Days (45-Day Extension Permitted, Once)
The Creditor-IRSP must be completed within 150 days from commencement, with a single 45-day extension permitted on 66% CoC approval. If no plan is approved within this period, mandatory conversion to regular CIRP under Chapter II occurs.
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Sec 58J — Plan Approval
CoC Approves Plan (66% Vote); NCLT Approves Under Section 31
The CoC approves the resolution plan by 66% vote. The RP submits it to the NCLT along with a compliance report. NCLT applies Section 31 (mutatis mutandis) to approve or reject. If rejected, or plan not received, the Creditor-IRSP converts to a full CIRP.
Key Governance Features of the Creditor-IRSP
Management stays in place
Board of Directors continues to manage (Sec 58F)
Unlike CIRP, the management of the corporate debtor’s affairs continues to vest in the Board of Directors during the Creditor-IRSP period. The RP attends board meetings and can reject any resolution inconsistent with the process — but does not take over management.
Moratorium is optional (Sec 58G)
RP applies for moratorium; NCLT confirms if required
Unlike standard CIRP where moratorium is automatic, under Creditor-IRSP the moratorium is optional — the RP applies and NCLT confirms only if satisfied it is required for proper conduct of the process. Moratorium commences from the date of application.
Debtor can object (Sec 58C)
Corporate debtor has 30 days to challenge at NCLT
The corporate debtor can file an objection to the NCLT within 30 days of commencement. If the NCLT finds no default occurred AND the process was in contravention of Sections 58A/58B, it declares commencement void ab initio. If default occurred but process was irregular, it converts to CIRP.
Conversion to CIRP (Sec 58H)
Automatic conversion in three scenarios
Mandatory conversion to full CIRP occurs if: no resolution plan is received within the period; the corporate debtor or its personnel fail to cooperate with the RP; or the NCLT rejects the plan. The CoC can also voluntarily convert by 66% vote at any stage during the process.
New Chapter V-A — Section 59A
Group Insolvency — A Long-Awaited Framework for Connected Corporate Debtors
The Amendment inserts Chapter V-A providing the Central Government with rule-making power to frame a framework for conducting insolvency proceedings against two or more corporate debtors that form part of a group. This fills a critical gap that had led to fragmented, uncoordinated proceedings across multiple NCLT benches for companies with group relationships:
What Constitutes a “Group” (Explanation to Section 59A): “Group” means two or more corporate debtors interconnected by control or significant ownership — including holding companies, subsidiaries, and associate companies as defined in the Companies Act, 2013. “Significant ownership” includes the right to exercise 26% or more voting rights. “Control” is defined broadly to include direct/indirect control through shareholding, management rights, ownership interest, shareholders agreements, voting agreements, or articles/LLP agreements.
What the Group Insolvency Rules May Provide
Clause (a)
Common NCLT Bench for Group
A common bench for insolvency proceedings of all corporate debtors in a group, with power to transfer pending proceedings from other benches to the designated common bench — eliminating fragmentation and contradictory orders.
Clause (b)
Coordination Between Proceedings
Mechanisms for coordination between different group entities’ CIRP and liquidation proceedings — including coordination between their respective CoCs, IRP/RPs, and liquidators to enable value-maximising group-level solutions.
Clause (c)
Common Insolvency Professional
Rules may provide for appointment and replacement of a common IP to facilitate coordination between insolvency proceedings of different group entities — enabling a single professional to oversee and align the resolution strategies across the group.
Clause (d)
Group-Level CoC Committee
A meta-committee comprising the CoCs of individual group companies — enabling coordinated decision-making at the group level while preserving each individual CoC’s autonomy for its own entity’s proceedings.
Clause (e)
Binding Group Coordination Agreement
Rules may provide for a binding coordination agreement approved by group companies’ CoCs — setting out synchronized aspects of their proceedings. NCLT can issue orders to implement approved agreements.
Clause (f)
Treatment of Coordination Costs
Rules will specify how costs incurred for coordination measures between group insolvency proceedings are treated — ensuring cost clarity and appropriate allocation across the participating group entities.
Parliamentary Oversight: Rules under Chapter V-A (and Section 240C for cross-border insolvency) require a draft to be laid before both Houses of Parliament. The rules are subject to a parliamentary review period of 30 days across one or more sessions — both Houses must agree to any modifications. This is a heightened legislative oversight mechanism for these landmark new frameworks.
Section 240C — New
Cross-Border Insolvency — India Finally Gets a Statutory Framework
After years of UNCITRAL Model Law advocacy and committee recommendations, the 2026 Amendment inserts Section 240C, empowering the Central Government to prescribe rules for administering cross-border insolvency proceedings. This is a foundational first step toward India adopting a formal cross-border insolvency framework:
What the rules may cover
Recognition, relief, judicial cooperation & coordination
The Central Government may prescribe the manner and conditions for: recognition of foreign insolvency proceedings; granting relief in India; judicial cooperation with foreign courts; assistance and coordination for proceedings involving cross-border debtors in notified countries/territories.
Expanded “corporate debtor” definition
Includes entities incorporated with limited liability outside India
For the purposes of Section 240C, “corporate debtor” expressly includes any person incorporated with limited liability outside India — ensuring the cross-border framework can apply to foreign limited liability entities with operations or assets in India.
Modification power
Rules may modify IBC and Companies Act provisions
The Central Government rules under Section 240C may provide that any provision of the IBC or Companies Act, 2013 shall apply with exceptions, modifications, and adaptations as required for cross-border proceedings — ensuring existing Indian insolvency law does not impede international coordination.
Designated benches
Specific NCLT benches may be designated for cross-border cases
The rules may designate specific NCLT bench(es) for dealing with cross-border insolvency proceedings — ensuring expertise and consistency in handling what are expected to be complex, high-stakes international insolvency cases.
Electronic Portal (Section 240B — New): The Central Government may also provide an electronic portal and related procedures for all insolvency and bankruptcy processes under the IBC — signalling a push toward fully digital, paperless insolvency proceedings. This builds on and formalises the existing IBBI digital infrastructure initiatives.
Avoidance, Penalties & Governance
Avoidance Transaction Reforms, New Penalties & Service Provider Discipline
Avoidance Transaction Reforms
Section 26 — Substituted
Avoidance proceedings survive CIRP/liquidation completion
Filings for avoidance transactions or wrongful trading do not affect ongoing CIRP or liquidation proceedings. Crucially, completion of CIRP or liquidation does not affect continuation of pending avoidance proceedings — ensuring avoidance claims are not lost when the main proceedings close.
Section 47 — Substituted
Creditors can file avoidance applications if RP/liquidator fails to act
Where the RP or liquidator has not reported an avoidance transaction or wrongful trading to the NCLT, a creditor (individually or jointly), member, or partner may directly apply to the NCLT. If the NCLT finds the RP/liquidator failed to act despite sufficient information, it must order IBBI to initiate disciplinary proceedings.
Look-back period clarified
Period starts from initiation date, ends on insolvency commencement date
For Sections 43 (preferential), 46 (undervalued), and 50 (extortionate credit), the look-back period is now expressly stated to start from the initiation date and end on the insolvency commencement date — resolving ambiguity about the exact period and aligning with the new Section 5(11) insolvency commencement date definition.
Section 53 — Sec. cred. clarification
Partial security relinquishment: secured to that extent, unsecured for balance
Where the value of security relinquished is less than total debt owed, the secured creditor is treated as secured only to the extent of the relinquished security value, and as an unsecured creditor for the remaining debt — eliminating the disparity in treatment that had generated litigation.
New Penalty Provisions
Section 64A — New
Penalty for Frivolous Proceedings (Part II)
NCLT may impose a penalty of ₹1 lakh to ₹2 crore on any person who initiates a frivolous or vexatious proceeding under Part II of the IBC. A key deterrent against abuse of the insolvency process as a debt collection mechanism.
Section 67B — New
Penalty for Moratorium Violations
₹1 lakh to ₹2 crore penalty for officers of the corporate debtor who violate the moratorium under Section 14, and for any person who authorises or permits a creditor to contravene the moratorium. Also covers violations of approved resolution plan terms by the corporate debtor, officers, or creditors.
Section 67C — New
Penalty for Operational Creditor Concealment
₹1 lakh to ₹2 crore penalty against an operational creditor who conceals, in a Section 9 application, the fact that the corporate debtor had notified it of a dispute or made full and final payment. Addresses a persistent abuse of the operational creditor CIRP route.
Section 235A — Substituted
Enhanced Civil Penalties Replace Sections 74 & 76
The substituted Section 235A empowers the NCLT to impose civil penalties of minimum ₹1 lakh/day (extendable to 3x loss caused or 3x unlawful gain, whichever is higher) on persons who contravene IBC provisions. Cap of ₹5 crore where loss/gain is not quantifiable. Prosecutions under Secs 74 and 76 pending before courts on the commencement date continue to proceed.
Section 183A — New
Penalty for Frivolous Proceedings (Part III)
NCLT may impose ₹1 lakh to ₹2 crore penalty for frivolous or vexatious proceedings under Part III (individual insolvency and bankruptcy) — mirroring the Section 64A protection in Part II proceedings.
NCLAT: 3-Month Disposal
Section 61(6) — Appellate Tribunal Timeline
The NCLAT shall dispose of IBC appeals within 3 months from the date of receipt — addressing appellate-level delays that had been undermining the IBC’s time-bound objective. A mandatory timeline with implied recording-of-reasons obligation for delays.
IBBI Disciplinary Framework Overhauled — Service Provider Regulation
Sections 217, 218, 219, and 220 are substantially amended. IBBI can now issue show-cause notices to any “service provider” (the new omnibus term replacing the earlier limited references to IPs, IPAs, and information utilities). A new Disciplinary Committee structure is introduced within IBBI, with separate investigation and adjudication functions. Disciplinary Committee orders can be appealed to the NCLAT within 30 days (with a further 15-day condonation window for sufficient cause). Penalty ceiling for service provider contraventions increased from ₹1 crore to ₹2 crore.
Other Significant Amendments
Additional Amendments: Voluntary Liquidation, Personal Guarantors, Section 28A & More
Sec 59 — Voluntary Liquidation
Completion within 1 year + new termination mechanism
Voluntary liquidation must now be completed within 1 year from commencement. A new Sec 59(5A) allows termination of ongoing voluntary liquidation: by special resolution of members, with 2/3 creditor approval (in value) where debts exist, within 7 days. The liquidator intimates IBBI and the ROC to terminate — enabling revival of solvent companies that initiated voluntary liquidation unnecessarily.
Sec 28A — New
Guarantor asset transfer permitted during CIRP
A significant new provision: where a creditor has taken possession of an asset of a personal or corporate guarantor under security enforcement laws, the creditor may permit transfer of that asset as part of the guarantor’s insolvency resolution — with prior CoC approval. For corporate guarantors undergoing CIRP, 66% CoC approval required. For personal guarantors, 75% creditor approval (by value) required.
Pre-Packaged Insolvency (Sec 54A)
Eligibility threshold reduced to 51%; CIRP added as bar
The threshold for creditor approval to initiate pre-packaged insolvency reduced from 66% to 51% — making the pre-pack route more accessible. The eligibility conditions now also exclude debtors for which a creditor-initiated insolvency resolution process is ongoing as an additional bar to pre-pack.
Sec 215 — Information Utilities
Operational creditors must submit to IU before Section 9 filing
Operational creditors must now submit operational debt information to the Information Utility before filing a Section 9 application — strengthening the IU ecosystem and providing documentary evidence of the debt before the NCLT application stage. Corporate debtors must authenticate or be deemed to have authenticated within the specified period.
Sec 96 & 124 — Personal Guarantors
Interim moratorium excluded for personal guarantors in CIRP
Section 96 (interim moratorium) and Section 124 (fresh start process moratorium) are amended so they do not apply where an application is filed for initiating insolvency or bankruptcy proceedings in respect of a personal guarantor to a corporate debtor — preventing personal guarantors from using interim moratorium protections to delay creditor recovery.
Section 53 — Illustrations Added
Contractual override of waterfall is void (workmen protection)
New illustrations clarify that a contractual arrangement between secured creditors and workmen that subordinates workmen dues to secured creditor payment is void (Illustration I). But a contractual arrangement between two secured creditors providing for inter-se payment priority is valid (Illustration II) — an important clarification for inter-creditor agreement structuring.
Navigate the IBC Amendment Act 2026 with Corpzo
From impact assessment of ongoing proceedings to advisory on the new Creditor-IRSP, group insolvency structuring, and post-amendment compliance — Corpzo’s insolvency compliance team is ready to support companies, creditors, and insolvency professionals.
Frequently Asked Questions
IBC Amendment Act 2026 — Key Questions Answered
Q1
Has the IBC Amendment Act 2026 come into force?
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) received Presidential assent on April 6, 2026 and was published in the Gazette of India on that date. However, the Act shall come into force on such date(s) as the Central Government appoints by notification in the Official Gazette — with explicit provision for different commencement dates for different provisions. As of April 2026, stakeholders must watch for the Central Government’s commencement notification(s). Corpzo’s compliance monitoring tracks all commencement notifications and provides immediate alerts to registered clients.
Q2
How does the new Creditor-Initiated Insolvency Resolution Process (Creditor-IRSP) differ from the standard CIRP?
The key differences are: (1) Creditor-IRSP is initiated by banks/FIs without filing in NCLT — the RP is appointed directly by the creditor; (2) The corporate debtor’s management is not displaced — the Board of Directors continues to manage the company, with the RP attending meetings and having veto power; (3) The moratorium is optional and court-confirmed rather than automatic; (4) The debtor has a 30-day notice period and right of representation before the process commences; (5) The timeline is 150 days (vs. 180 days for CIRP) with a single 45-day extension; (6) Creditor-IRSP converts to full CIRP if no plan is approved, giving it a “soft landing” into the main framework if the lighter process fails. Essentially, it is a bank-led, management-preserving restructuring process with built-in conversion to CIRP as a backstop.
Q3
What does the Section 31(6) claims extinguishment provision mean for creditors in ongoing cases?
Section 31(6) provides that upon NCLT approval of a resolution plan, all claims against the corporate debtor and its assets under any law, prior to the date of approval, are extinguished — and no further proceedings (including assessment proceedings) can be commenced or continued on the basis of such claims. This is a significant creditor and acquirer protection. The Explanation to Section 31(6) clarifies that the extinguishment does not affect: (1) claims against the promoters, management, or guarantors of the corporate debtor; or (2) claims against persons with joint or joint-and-several liability with the corporate debtor. Importantly, the Act declares that sub-sections (5) and (6) shall be deemed to apply from the date of commencement of the IBC 2016 (with limited exceptions for matters that have attained finality), giving it retrospective effect for pending approvals.
Q4
Are the liquidation amendments applicable to ongoing liquidation proceedings?
The Act provides specific applicability rules for liquidation amendments. The CoC supervision of liquidation (Section 21(11)) and Section 34A (CoC power to replace liquidator) apply to: (a) liquidation processes initiated after the commencement date; and (b) ongoing liquidation processes as on the commencement date where the liquidator has not yet made an application under Section 54 for dissolution. The changes to claims submission procedure (former Sections 38-42 now omitted) do not apply to liquidation processes initiated on or before the commencement date. The 14-day secured creditor identification deadline in Section 52(2) also does not apply to ongoing liquidation processes. Parties in ongoing liquidation proceedings should urgently assess which new provisions apply to their proceedings.
Q5
What is the significance of the new Section 64A penalty for frivolous proceedings?
Section 64A empowers the NCLT to impose a penalty of ₹1 lakh to ₹2 crore on any person who initiates a frivolous or vexatious proceeding under Part II of the IBC. This is a significant deterrent against what has become a well-documented problem — operational creditors and even some financial creditors using IBC filings as a debt collection tool or as a strategic pressure tactic, rather than as a genuine insolvency resolution mechanism. The companion Section 183A applies the same penalty to Part III proceedings. Combined with the new Section 67C (penalty for concealment of dispute by operational creditors), these provisions substantially raise the compliance bar for creditors filing IBC applications and should reduce frivolous filings at the NCLT.
Q6
How can Corpzo help companies, creditors, and IPs navigate the IBC Amendment Act 2026?
Corpzo.com provides comprehensive IBC compliance advisory services covering: (1) Impact assessment for ongoing CIRP and liquidation proceedings against the new amendments; (2) Advisory on the Creditor-IRSP — structuring eligibility assessments, debtor notice drafting, 51% creditor approval processes, RP coordination, and moratorium applications; (3) Group insolvency preparedness — mapping group structures, identifying coordination opportunities, and preparing for the Central Government’s group insolvency rules; (4) Cross-border insolvency advisory for companies with international operations or assets; (5) Monitoring of Central Government commencement notifications and IBBI regulation updates; and (6) General IBC compliance management for companies, directors, secured creditors, and insolvency professionals. Contact reach@corpzo.com, call +91 9999 139 391, or visit www.corpzo.com.
IBC Amendment Act 2026Insolvency Bankruptcy Code 2026
Creditor Initiated Insolvency IndiaGroup Insolvency India
Cross-Border Insolvency IndiaCIRP Timeline Reform 2026
Section 31 Resolution Plan 2026Section 33 CIRP Restoration
IBC Liquidation Reform 2026IBBI Service Provider 2026
Section 64A Frivolous ProceedingsIBC Section 235A Penalty
Corpzo Insolvency ComplianceIBC 2016 Amendment
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