In force · As amended up to 2026-08
31. In section 372, after the words "The provisions of this Act", the words and figures "or of the Insolvency and Bankruptcy Code, 2016, as the case may be," shall be inserted.
1. The Explanation omitted by Act 26 of 2021, s. 12 (w.e.f. 4-4-2021).
2. Ins. by s. 13, ibid ., (w.e.f. 4-4-2021).
- (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;
1. The proviso omitted by the Jammu and Kashmir Reorganization (Adaptation of Central Laws) Order, 2020, vide notification No. S.O. 1123(E) dated (18-3-2020) and vide Union Territory of Ladakh Reorganisation (Adaptation of Central Laws) Order, 2020, notification No. S.O. 3774(E), dated (23-10-2020).
(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);
1. In section 41, clause (a) shall be omitted.
THE SECOND SCHEDULE
( See section 246)
AMENDMENT TO THE CENTRAL EXCISE ACT, 1944
(1 OF 1944)
(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. In section 11E, for the words, figures and brackets "and the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002 (54 of 2002) ", the words, figures and brackets "the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002 (54 of 2002) and the Insolvency and Bankruptcy Code, 2016" shall be substituted.
THE THIRD SCHEDULE
( See section 247)
AMENDMENT TO THE INCOME-TAX ACT, 1961
(43 OF 1961)
In sub-section (6) of section 178, after the words "for the time being in force", the words and figures "except the provisions of the Insolvency and Bankruptcy Code, 2016" shall be inserted.
THE FOURTH SCHEDULE
( See section 248)
AMENDMENT TO THE CUSTOMS ACT, 1962
(52 OF 1962)
In section 142A, for the words, figures and brackets "and the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002 (54 of 2002)", the words, and figures and brackets " the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002 and the Insolvency and Bankruptcy Code, 2016" shall be substituted.
THE FIFTH SCHEDULE
( See section 249)
AMENDMENTS TO THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993
(51 OF 1993)
(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 an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any other agreement 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, or funds, goods or services, from or to the corporate debtor;
(34) "transfer" includes sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien;
(35) "transfer of property" means transfer of any property and includes a transfer of any interest in 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 the Industrial Disputes Act, 1947 (14 of 1947);
1. In the long title, after the words "financial institutions", the words ", insolvency resolution and bankruptcy of individuals and partnership firms" shall be inserted, namely:—.
(37) words and expressions used but not defined in this Code but defined in the Indian Contract Act, 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 Limited Liability Partnership Act, 2008 (6 of 2009) and the Companies Act, 2013 (18 of 2013), shall have the meanings respectively assigned to them in those Acts.
1. In section 23, in sub-sections (4), (5) and (6), after the words, figures and brackets "the Banking Regulation Act, 1949 (10 of 1949)" "the Companies Act, 2013 (18 of 2013)", the words and figures "or the Insolvency and Bankruptcy Code, 2016" shall be inserted.
1. In section 2,—
(a) for clause (23), the following clause shall be substituted, namely:—
"(23) "Company Liquidator" means a person appointed by the Tribunal as the Company Liquidator in accordance with the provisions of section 275 for the winding up of a company under this Act;";
(b) after clause (94) , the following clause shall be inserted, namely:—
"(94A) "winding up" means winding up under this Act or liquidation under the Insolvency and Bankruptcy Code, 2016, as applicable.".
Source: India Code