Section 121 of The Insolvency and Bankruptcy Code, 2016.
- (1)An application for bankruptcy of a debtor may be made, by a creditor individually or jointly with other creditors or by a debtor, to the Adjudicating Authority in the following circumstances, namely;—
- (a)where an order has been passed by an Adjudicating Authority under sub-section 4 of section 100; or
- (b)where an order has been passed by an Adjudicating Authority under sub-section 2 of section 115; or
- (c)where an order has been passed by an Adjudicating Authority under sub-section 3 of section 118.
- (2)An application for bankruptcy shall be filed within a period of three months of the date of the order passed by the Adjudicating Authority under the sections referred to in sub-section (1).
- (3)Where the debtor is a firm, the application under sub-section (1) may be filed by any of its partners.
Summary
- An application for the bankruptcy of an individual or partnership can be submitted by a creditor, multiple creditors jointly, or the debtor themselves under specific circumstances.
- This application can only be filed if the court has already passed an order rejecting a repayment plan, terminating the insolvency process early, failing to receive a plan, or rejecting insolvency due to intent to defraud.
- The legal filing must be made within a strict timeframe of three months from the date of the Adjudicating Authority's order under the specified sections.
- If the debtor is a partnership firm, any of its partners is authorized to file the bankruptcy application.
Practical examples
FAQ
1. Who can file a bankruptcy application under Section 121 of the Insolvency and Bankruptcy Code, 2016?
Under Section 121 of the Insolvency and Bankruptcy Code, 2016, a bankruptcy application can be filed by a debtor, a creditor, or multiple creditors jointly, and if the debtor is a partnership firm, any of its partners can file it.
2. What is the time limit for filing a bankruptcy application under Section 121 of the Insolvency and Bankruptcy Code, 2016?
Under Section 121 of the Insolvency and Bankruptcy Code, 2016, the application must be filed within a period of three months from the date of the order passed by the Adjudicating Authority under the relevant sections.
3. In what specific circumstances can a person apply for bankruptcy under Section 121 of the Insolvency and Bankruptcy Code, 2016?
Under Section 121 of the Insolvency and Bankruptcy Code, 2016, an application can be filed if the Adjudicating Authority has passed an order rejecting a repayment plan, terminating the insolvency resolution process early, failing to receive a repayment plan, or rejecting an insolvency application because of an intent to defraud.
Test yourself
Q1.Under Section 121 of the Insolvency and Bankruptcy Code, 2016, what is the maximum period within which an application for bankruptcy must be filed after a relevant order is passed by the Adjudicating Authority?
Q2.Under Section 121 of the Insolvency and Bankruptcy Code, 2016, if the debtor is a partnership firm, who is authorized to file an application for bankruptcy?
Q3.Under Section 121 of the Insolvency and Bankruptcy Code, 2016, which of the following events does NOT create a valid legal ground for filing a bankruptcy application?
Q4.Under Section 121 of the Insolvency and Bankruptcy Code, 2016, if the Adjudicating Authority rejects an individual's insolvency application under Section 100 because it was made with an intent to defraud, what happens next?