Section 184 of The Insolvency and Bankruptcy Code, 2016.
- (1)If a debtor or creditor provides information which is false in any material particulars to the resolution professional, he shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to five lakh rupees, or with both.
- (2)If a creditor promises to vote in favour of the repayment plan dishonestly by accepting any money, property or security from the debtor, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to three times the amount or its equivalent of such money, property or security accepted by such creditor, as the case may be, or with both: Provided that where such amount is not quantifiable, the total amount of fine shall not exceed five lakh rupees.
Summary
- Under Section 184 of India's main bankruptcy law, any debtor or creditor who gives material false information to the resolution professional, who is the licensed specialist managing the debt process, can be punished.
- The penalty for providing such false details can be a jail term of up to one year, a fine of up to five lakh rupees, or both.
- A creditor who accepts a bribe such as money, property, or security from a debtor to vote in favor of a repayment plan is also penalized.
- For taking a bribe to vote, a creditor can face up to two years of jail, a fine of up to three times the value of the bribe, or both.
- If the value of the dishonest benefit cannot be measured in money, the maximum fine is capped at five lakh rupees.
Practical examples
FAQ
1. What is the punishment for a creditor who lies to a resolution professional under Section 184 of India's insolvency law?
Under Section 184 of the Insolvency and Bankruptcy Code, 2016, if a creditor provides false information in any material particulars to the resolution professional, they can be punished with imprisonment for up to one year, or a fine of up to five lakh rupees, or both.
2. Can a creditor be penalized under the 2016 Insolvency and Bankruptcy Code Section 184 for taking a bribe to vote for a repayment plan?
Yes, under Section 184 of the Insolvency and Bankruptcy Code, 2016, if a creditor dishonestly promises to vote in favor of a repayment plan after accepting any money, property, or security from the debtor, they can be imprisoned for up to two years, or fined up to three times the value of the bribe accepted, or both.
3. What happens if a creditor accepts an unquantifiable bribe to vote for an insolvency plan under India's bankruptcy law Section 184?
Under Section 184 of the Insolvency and Bankruptcy Code, 2016, if a creditor accepts a bribe whose value is not quantifiable or cannot be measured, the total fine imposed on them cannot exceed five lakh rupees.
Test yourself
Q1.Under Section 184 of the Insolvency and Bankruptcy Code, 2016, what is the maximum prison term for a debtor who provides materially false information to a resolution professional?
Q2.Under Section 184 of the Insolvency and Bankruptcy Code, 2016, if a creditor accepts a bribe of fifty thousand rupees to vote in favor of a repayment plan, what is the maximum fine they can face if convicted?
Q3.Under Section 184 of India's Insolvency and Bankruptcy Code, 2016, what is the maximum fine limit if a creditor accepts a non-monetary, unquantifiable security from a debtor to vote for a plan?
Q4.Under Section 184 of India's bankruptcy law, 2016, which of the following actions is specifically penalized when done in exchange for a dishonest promise to vote in favor of a repayment plan?