Most of the 2026 amendments to the Code, across admission, withdrawal, resolution plans, liquidation and personal insolvency, came into force on 26 May 2026. The creditor-initiated process, group insolvency and the cross-border framework did not. This page sets out which is which, from the Act and the commencement notification.
Most of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 has been in force since 26 May 2026, under S.O. 2625(E) dated 22 May 2026.
The creditor-initiated insolvency resolution process (Chapter IV-A) is enacted but not in force. Section 40 of the Amendment Act, which inserts it, is not in the notification, and neither the eligible debtors nor the creditor class has been notified.
Once default is shown, the NCLT must admit a Section 7 application; no other ground may be used to reject it. It is to decide within 14 days and record reasons if it does not.
A CIRP can be withdrawn under Section 12A only between the constitution of the CoC and the first invitation for resolution plans, with 90% of the CoC’s vote.
Tax and other statutory dues no longer make the Government a secured creditor. A security interest now exists only where it is created by agreement or arrangement.
Personal guarantors to corporate debtors no longer get an interim moratorium.
A good deal of what has been published about the 2026 amendments does not match the notified text. On 26 May 2026 some reports described the creditor-initiated process as “operationalised”; the commencement notification does not include the section that inserts it. What follows is taken from Act No. 6 of 2026 and S.O. 2625(E), not from commentary, and it separates what is in force from what is enacted but waiting.
What is in force, and what is not
Commenced 26 May 2026
In force
Admission, withdrawal, plans, liquidation and personal insolvency
S.O. 2625(E) brings into force sections 2 to 6, 8 to 33, 35 to 39, 41, 43, 44, 46, 48 to 59, 61 to 66, 68 and 72 of the Amendment Act, together with sub-clause (iii) of clause (a) and clause (b) of section 34, clause (a) of section 69, clause (a) of section 70, and sub-clauses (i) to (xxvi) of clause (b) of section 70 other than sub-clause (xx). In terms of the Code, that covers:
Admission. Section 7(5) substituted: admit or reject within 14 days; once default and completeness are shown, no other ground may be considered; an information utility record of default is sufficient. Reasons must be recorded for delay, now under Sections 9 and 10 as well (Act ss.4–6).
Withdrawal. New Section 12A (Act s.8).
Claims and cooperation. The IRP verifies claims and, where required, determines their value (s.18); the duty to cooperate reaches former personnel and those engaged under a contract for service (s.19) (Act ss.11–12).
Resolution plans. Plans may provide for merger, amalgamation, demerger or sale of assets, through one or more plans (s.5(26)); a floor for dissenting financial creditors (s.30(2)(ba)); a 30-day period for the NCLT’s decision on approval, protection of licences, and a codified clean slate (s.31); transfer of guarantor assets inside the CIRP (s.28A) (Act ss.3, 17–19).
Liquidation. The CoC supervises the liquidation (s.21(11)); one-time restoration of the CIRP (s.33); the liquidator appointed on the IBBI’s recommendation and replaceable by 66% of the CoC (ss.34, 34A); claims verified in the CIRP carried into liquidation (ss.35, 38–42 omitted); the secured creditor’s 14-day election (s.52); Government dues and the waterfall (s.53); 180 days plus up to 90 (s.54); voluntary liquidation within one year (s.59) (Act ss.13, 20–25, 31–33, 41).
Avoidance. Look-back periods re-anchored to the initiation date (ss.43, 46, 50); creditors may apply where the RP or liquidator does not (s.47); applications survive the end of the process (s.26); liquidators may bring fraudulent or wrongful trading applications (s.66) (Act ss.16, 26–30, 46).
Procedure and penalties. Fast-track CIRP omitted (Chapter IV, Act s.39); the NCLAT directed to dispose of appeals within three months (s.61, Act s.43); a penalty for frivolous or vexatious proceedings (s.64A, Act s.44); civil penalties for contravening the moratorium or a plan in place of prosecution (ss.67B–67C; ss.74 and 76 omitted; Act ss.48–50).
Personal insolvency. No interim moratorium for personal guarantors (s.96(4)); termination where no repayment plan is filed, and the route to bankruptcy (ss.106, 121); undervalued transactions and a frivolous-proceedings penalty in Part III (ss.164A, 183A) (Act ss.51–58).
Information utilities. An operational creditor must submit specified information to an information utility before filing under Section 9 (s.215, Act s.62).
Enacted Not notified
Not in force
The creditor-initiated process, group insolvency and cross-border insolvency
Chapter IV-A, the creditor-initiated insolvency resolution process (Sections 58A to 58K), inserted by section 40 of the Amendment Act, with the linked amendments in sections 7, 45, 47 and 60.
Chapter VA, group insolvency (Section 59A), inserted by section 42.
Section 240C, the power to make rules for cross-border insolvency proceedings.
Also outside the notification: section 67, the rest of clause (a) of section 34, clause (b) of section 69, sub-clause (xx) of clause (b) of section 70, and section 71.
Each of these needs a further notification under section 1(2) of the Amendment Act before it has any effect.
Awaited Rules and regulations
Subordinate legislation
What still has to be made
Even after section 40 is notified, the creditor-initiated process needs a notification of the corporate debtors eligible for it and of the class of financial institutions that may use it (Sections 58A and 58B), together with the IBBI’s CIIRP Regulations. The IBBI published a discussion paper on draft regulations on 15 April 2026, and comments closed on 28 April 2026. Group insolvency and cross-border insolvency each depend on rules to be made by the Central Government.
Several provisions that are in force also work through regulations “as may be specified”, including the information an operational creditor must lodge with an information utility before filing under Section 9.
On the claim that the creditor-initiated process is already operational
Reports on 26 May 2026 described the creditor-initiated process as operationalised. S.O. 2625(E) does not bring section 40 of the Amendment Act into force, and section 40 is the provision that inserts Chapter IV-A. Even once it is notified, nothing can be initiated until eligible corporate debtors and the class of financial institutions are notified and the IBBI’s regulations are in place. What to watch for: a further notification under section 1(2) naming section 40, the eligibility notifications, and final CIIRP Regulations.
Where are you in the process?
Choose your role and the stage your matter has reached. The points that apply appear below, with links to the detail on this page.
Choose your role and stage to see the points that apply.
What changed, by who you are
Each block states the change, the section of the Code, and whether it is in force. Everything below is in force unless marked otherwise.
Banks, NBFCs and ARCs
Admission is now mandatory once default and completeness are shown, and an information utility record is sufficient proof of default (s.7(5)). The earlier discretion to refuse admission despite a proven default no longer has a textual basis.
Only a security interest created by agreement or arrangement counts, so a statutory charge for tax dues does not rank alongside a lender’s security (s.3(31), Explanation).
A dissenting financial creditor receives not less than the lower of its liquidation value and what it would receive if the plan’s distribution followed the Section 53 waterfall (s.30(2)(ba)).
In liquidation, a secured creditor that wants to realise outside the estate must inform the liquidator and identify the asset within 14 days of the liquidation commencement date, or the security interest is deemed relinquished. An asset charged to several lenders can be realised only if lenders holding at least 66% of the claims it secures agree (s.52).
The CoC supervises the liquidation and can replace the liquidator by 66% of the voting share (ss.21(11), 34A).
The creditor-initiated process is not yet available (see below).
Operational creditors: suppliers, MSMEs and service providers
The route is unchanged in outline: a demand notice under Section 8, ten days for the debtor to pay or point to a pre-existing dispute, then a Section 9 application where the default is at least ₹1 crore.
An operational creditor must now submit specified information to an information utility before filing under Section 9, and the corporate debtor is asked to authenticate it (s.215). The detail is left to IBBI regulations.
The NCLT must record reasons if a Section 9 application is not decided within 14 days (s.9).
Concealing a dispute or a payment when applying now attracts a civil penalty of ₹1 lakh to ₹2 crore (s.67C).
Once a CIRP starts, the claim goes to the IRP by the date in the public announcement, and the IRP may determine its value (s.18).
Settlement after admission now has a narrow door. Withdrawal under Section 12A is possible only after the CoC is constituted and before the first invitation for resolution plans, with 90% of the CoC, and the NCLT decides within 30 days. A settlement reached before the CoC exists has to wait for it.
The defences to a Section 7 application are confined to default and completeness; no other ground may be considered (s.7(5)).
The duty to cooperate with the IRP now reaches anyone who is or has been personnel of the company or its promoter, anyone associated with its management, and anyone engaged under a contract for service (s.19).
Look-back periods now run from one or two years before the filing (initiation) date up to admission, so transactions in the gap between filing and admission are caught (ss.43, 46, 50). Creditors and members can apply if the RP does not, and those applications survive the end of the CIRP (ss.26, 47).
A petition initiated fraudulently or maliciously can be met with an application under Section 65 before the NCLT, and a frivolous or vexatious one now carries a penalty of ₹1 lakh to ₹2 crore (s.64A).
Contravening the moratorium is now a matter for civil penalties (s.67B) rather than prosecution under the omitted Section 74.
No interim moratorium arises on an application concerning a personal guarantor to a corporate debtor (s.96(4)), so the filing alone no longer stays a lender’s proceedings.
A creditor that has taken possession of a guarantor’s asset by enforcing its security may transfer it as part of the company’s resolution, with the CoC’s prior approval. The amount is adjusted against the guarantor’s debt and any surplus is returned (s.28A).
The clean slate under an approved plan does not extend to guarantors: claims against them survive (s.31(6)).
If no repayment plan is filed within the period, the insolvency resolution process is terminated and the bankruptcy route opens (ss.106(1A), 121).
A resolution plan may provide for merger, amalgamation, demerger and the sale of one or more assets, through one or more plans from one or more applicants (s.5(26)).
The NCLT is to decide on approval within 30 days of receiving the plan (s.31(2A)).
On approval, claims against the company and its assets arising before approval are extinguished, including claims under other laws; claims against promoters, guarantors and co-obligors survive (s.31(6)). Licences, permits and registrations continue for their remaining term, subject to compliance after approval (s.31(5)).
Implementation can be supervised by a committee of an insolvency professional, creditor representatives and the resolution applicant (s.30(2)(d)).
A failed plan need not end in liquidation: before a liquidation order, the CoC may apply by 66% to restore the CIRP, once, for up to 120 days (s.33(1A)–(1B)).
The IRP verifies claims while collating them and, where required, determines their value (s.18).
In liquidation the CoC supervises the liquidator, the liquidator is appointed on the IBBI’s recommendation, and the CoC can replace the liquidator by 66% (ss.21(11), 34, 34A).
Liquidators no longer invite claims afresh; the claims verified in the CIRP carry into the liquidation (ss.35, 38–42 omitted).
The liquidator may bring fraudulent and wrongful trading applications (s.66), and avoidance applications continue after the process ends (s.26).
Disciplinary proceedings go before disciplinary committees, with an appeal to the NCLAT (s.220).
A foreign creditor files a claim in an Indian CIRP or liquidation in the same way as any other creditor.
Section 240C enables the Central Government to make rules on cross-border insolvency (recognition of foreign proceedings, relief, and cooperation) for notified classes of debtors and notified countries. It is not in force, and no rules have been published.
Where the claim rests on a foreign arbitral award, enforcement in India is a separate route under Part II of the Arbitration and Conciliation Act, 1996; see Mediate.co.in on award enforcement.
Chapter IV-A creates an out-of-court start to insolvency for defaults owed to notified financial institutions, with the company’s board left in place. Everything below is the process as enacted. None of it can be used until section 40 is notified and the eligibility notifications and regulations follow.
Eligibility
Only corporate debtors in a notified category (by assets, income, class of creditors or amount of debt) and financial creditors in a notified class of financial institutions can use it. It is barred where Part II proceedings are already pending, or where the company has been through a CIRP, a pre-packaged process or a CIIRP in the preceding three years (s.58A).
Initiation
The initiating creditors need the approval of financial creditors of the notified class holding at least 51% of the debt owed to that class. The debtor then has 30 days to make a representation. If the creditors still wish to proceed, a fresh 51% approval is taken within 30 days of receiving it, and a resolution professional is appointed (s.58B).
Commencement
The process starts on the date of the resolution professional’s public announcement. From then on, no application under Sections 7, 9, 10 or 54C can be filed against the company (s.58B).
Objection
The company can object before the NCLT within 30 days of commencement. If there was no default, or the conditions were not met, the NCLT can declare the commencement void; where there was a default but a procedural failure, it can convert the process into a CIRP. The NCLT is to decide within 30 days (s.58C).
Management and moratorium
The board stays in charge. The resolution professional attends board meetings and can reject resolutions (s.58F). There is no automatic moratorium: the resolution professional applies for one after the CoC is constituted, or earlier with 51% approval, and the NCLT may grant or refuse it (s.58G).
Time limit
150 days from commencement, extendable once by up to 45 days with 66% of the CoC (s.58D).
Plan
Approved by 66% of the CoC and then by the NCLT, which applies Section 31 (s.58J).
Exit
The process converts to a CIRP if no plan is received, the company fails to cooperate, or the plan is rejected, and the CoC can resolve to convert by 66% at any time (s.58H). Withdrawal needs 90% of the CoC, and only between the CoC’s constitution and the first invitation for plans; the NCLT decides within 14 days (s.58I).
What an institution can prepare now
Map which borrowers are likely to fall within the notified categories. Review inter-creditor arrangements to see whether 51% of the notified class is attainable in practice. Build the default record with an information utility. Settle internal approvals for the 30-day representation window, so that a process can begin as soon as the notifications issue.
Where the Code attaches a consequence to delay, it is stated. For the NCLT’s 14-day periods the consequence is a duty to record reasons, not a loss of jurisdiction.
Step
Time limit
Provision
Status
Reply to a demand notice
10 days from receipt
s.8(2)
Unchanged
Admit or reject a Section 7 application
14 days from receipt; reasons to be recorded if exceeded
s.7(5)
In force
Cure defects after the NCLT’s notice
7 days from receipt of the notice
Proviso to s.7(5)
In force
Decide a Section 9 or 10 application
14 days; reasons to be recorded if exceeded
ss.9, 10
In force
Complete the CIRP
180 days, extendable once by up to 90; the 330-day outer limit in the proviso has been treated as directory, not mandatory
s.12
Unchanged
Decide a withdrawal application
30 days from receipt
s.12A
In force
Decide on approval of a resolution plan
30 days from receipt of the plan
s.31(2A)
In force
Restored CIRP
Up to 120 days, once
s.33(1A)–(1B)
In force
Secured creditor’s election in liquidation
14 days from the liquidation commencement date, or the security is deemed relinquished
s.52(2)
In force
Complete liquidation and apply for dissolution
180 days; extendable by up to 90 days
s.54(1)
In force
Complete a voluntary liquidation
As specified by the IBBI, not more than one year
s.59
In force
Appeal to the NCLAT
30 days; up to 15 more on sufficient cause
s.61(2)
Unchanged
NCLAT to dispose of an appeal
3 months from receipt; no consequence stated
s.61, new sub-section
In force
CIIRP: debtor’s representation
30 days
s.58B
Not in force
CIIRP: completion
150 days, plus one extension of up to 45
s.58D
Not in force
On a narrow screen, the table scrolls sideways.
How this practice assists
Advice and representation for creditors, companies, promoters and guarantors, before the NCLT benches and the NCLAT, New Delhi:
Demand notices under Section 8, and replies to them
Section 7 and Section 9 applications, and replies opposing them
Claims in a CIRP or liquidation, and disputes over admission or value
Settlement and withdrawal under Section 12A within the new window
Resolution plans: submissions for applicants, and objections and dissenting-creditor entitlements for creditors
Avoidance, fraudulent-trading and wrongful-trading applications, including by creditors where the RP or liquidator does not act
Secured creditors’ Section 52 elections and realisation in liquidation
Personal guarantor proceedings, and lenders’ recovery against guarantors
Applications under Sections 64A and 65 against frivolous, fraudulent or malicious proceedings
CIIRP readiness for financial institutions, ahead of notification
Appeals before the NCLAT
Cross-border claims, including enforcement of foreign awards
No outcome can be promised, and what is required in any matter depends on its facts.
If a deadline is running
A demand notice gives ten days to reply. A Section 7 or Section 9 application is to be decided within fourteen days of filing. An appeal to the NCLAT must be filed within thirty days of the order. If one of these clocks is running, say so in the first line of your enquiry, or message on WhatsApp or call +91 92055 72322.
Mostly. Act No. 6 of 2026 received assent on 6 April 2026, and S.O. 2625(E) dated 22 May 2026 brought most of its provisions into force on 26 May 2026. The creditor-initiated process (Chapter IV-A), group insolvency (Chapter VA) and the cross-border rule-making power in Section 240C were not notified and are not in force.
Is the creditor-initiated insolvency resolution process (CIIRP) in force?
No. Section 40 of the Amendment Act, which inserts Chapter IV-A, is not among the provisions brought into force by S.O. 2625(E). The Central Government has also not notified the eligible corporate debtors or the class of financial institutions that may use it, and the IBBI’s CIIRP Regulations were still at the discussion-paper stage as at September 2026.
Can a CIRP be withdrawn before the committee of creditors is constituted?
No. Under Section 12A as substituted in 2026, an admitted application can be withdrawn only after the CoC is constituted and before the first invitation for resolution plans, with the approval of 90% of the CoC’s voting share, and the NCLT is to decide within 30 days.
How long does the NCLT take to admit a Section 7 or Section 9 petition now?
The Code directs the NCLT to admit or reject within 14 days of receiving the application, and to record its reasons in writing if it does not (Sections 7(5), 9 and 10). That is a direction with a reasons requirement, not a hard deadline, so listing time still matters. Under Section 7, once default and completeness are shown, no other ground may be used to reject the application.
What is the minimum default for filing under the IBC?
₹1 crore, for applications against a corporate debtor under Sections 7, 9 and 10, under the Central Government’s notification of 24 March 2020 under Section 4. The 2026 amendments did not change it.
How do I reply to a demand notice under Section 8 of the IBC?
Within ten days of receiving it. The reply should bring to the creditor’s notice any pre-existing dispute, such as a suit or arbitration filed before the notice, or proof that the amount has been paid (Section 8(2)). A dispute raised this way is a ground on which the NCLT must reject a Section 9 application (Section 9(5)(ii)(d)).
How do I file a claim in a CIRP?
With the interim resolution professional named in the public announcement, by the date it states, in the form set by the IBBI’s CIRP Regulations: Form B for operational creditors, Form C for financial creditors and Form D for workmen and employees, with proof of the debt. Under amended Section 18 the IRP verifies claims and, where required, determines their value, so the supporting record matters.
Can a personal guarantor stop a bank’s recovery by filing for insolvency?
Not any more. New Section 96(4) provides that no interim moratorium arises where the application concerns a personal guarantor to a corporate debtor, so filing no longer stays the lender’s proceedings.
Are GST, income tax and other government dues secured under the amended IBC?
No. The Explanation added to Section 3(31) provides that a security interest exists only where it is created by agreement or arrangement, not by operation of law, so a statutory charge does not make the Government a secured creditor. In liquidation, Government dues for the two years before the liquidation commencement date rank under Section 53(1)(e); older dues fall to clause (f).
What does a dissenting financial creditor get under a resolution plan now?
Not less than the lower of two amounts: what it would receive in a liquidation under Section 53, and what it would receive if the amount distributed under the plan were distributed in the Section 53 order of priority (Section 30(2)(ba)).
How long can liquidation take now?
The liquidator must complete the liquidation and apply for dissolution within 180 days of the liquidation commencement date, which the NCLT may extend, on the liquidator’s application, by up to 90 days (Section 54). A voluntary liquidation must be completed within the period the IBBI specifies, which cannot exceed one year (Section 59).
Can a creditor file an avoidance application itself?
Yes. Where a preferential, undervalued or extortionate transaction, or fraudulent or wrongful trading, has not been reported by the resolution professional or liquidator, a creditor or member may apply to the NCLT under the substituted Section 47. Under the new Section 26, such applications continue even after the CIRP or liquidation has ended.
What is the penalty for filing a frivolous or vexatious insolvency case?
Under new Section 64A, a person who initiates a frivolous or vexatious proceeding before the NCLT under Part II is liable to a penalty of not less than ₹1 lakh, which may extend to ₹2 crore. It has been in force since 26 May 2026. Section 183A makes parallel provision for personal insolvency proceedings.
Do the 2026 amendments apply to cases already pending?
It depends on the provision. The answer turns on the wording of the amendment and the stage the matter has reached, so it should be checked matter by matter.
How long do I have to appeal to the NCLAT?
Thirty days from the NCLT’s order, with up to fifteen more if sufficient cause is shown (Section 61(2)); that is unchanged. What is new is a direction that the NCLAT dispose of an appeal within three months of receiving it.
What is S.O. 2625(E)?
It is the Ministry of Corporate Affairs notification dated 22 May 2026, issued under Section 1(2) of the Amendment Act, that appointed 26 May 2026 as the date on which most of the Act’s provisions came into force. It leaves out, among others, section 40 (the creditor-initiated process) and section 42 (group insolvency).
Can a foreign creditor claim in an Indian insolvency, and is cross-border insolvency in force?
A foreign creditor can file a claim in a CIRP or liquidation like any other creditor. What is not in force is Section 240C, which enables the Central Government to make rules on recognising foreign insolvency proceedings and on cooperation with foreign courts; no such rules have been published.
Law stated as at 30 September 2026, from the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) and S.O. 2625(E) dated 22 May 2026.
Reviewed by Gaurav Rohilla, Advocate — enrolled with the Bar Council of Delhi, 2007. LL.B., LL.M. Insolvency Professional registered with the Insolvency and Bankruptcy Board of India (Regn. No. IBBI/IPA-003/ICAIN00303/2020-2021/13293).
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