Insolvency Resolution Process of Partnership Firm before DRT (Under I&B

Code)
(Refer- PART III of Insolvency and Bankruptcy Code, 2016)

(Applicable legal provision, if the IRP application is filed by firm/partners through their

Section Main Provision Remarks (If Any)

94 (2) Debtor (partnership firm) files an application All or majority of
partners to file
jointly.
96 Interim-moratorium: Shall commence on date Relief includes:
of the application till the date of admission of (i) pending legal
application proceedings in
respect of debt to
be stayed.
(ii) creditor shall
As per S. 96(2): Interim-moratorium to not initiate any
operate against all the partners of firm legal action
97 (3) Appointment of resolution professional:
Adjudicating Authority (here DRT) within
7 days of application- directs the board
(IBBI) to nominate resolution professional.

97(4) Board to nominate resolution professional-

within 10 days of receiving direction as
above
99 Submission of report by resolution Recommending for
professional: The resolution professional to either approval or
submit report to DRT within 10 days of his rejection of
appointment application

advocate and not through resolution professional)

100 Admission or Rejection of application: At the request of

The DRT to pass an order, either admitting resolution
or rejecting the application, within 14 days of professional, the
submission of report by resolution DRT may instruct
professional for conducting
negotiation b/w
100 (3) DRT to provide the above copy of order and debtor & creditors
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 report of resolution professional to creditors
within 7 days

100 (4) If application is rejected by DRT- the above

order to state that creditor is entitled to file
for Bankruptcy.
101 If application admitted: a moratorium shall i. pending legal
commence w.r.t. all debts from date of action to stay
admission of application till 180 days (or ii. creditors to not
an order of repayment plan u/s 114, initiate any legal
whichever is earlier) proceedings
iii. debtor to not
transfer, dispose,
alienate property.
102 DRT to issue public notice within 7 days of
passing the order u/s 100

Inviting claims from all creditors within 21

days of notice.
103-104 Registration of claims & preparation of list of
creditors.
105 Repayment Plan: Debtor & resolution
professional to work out a restructured plan
of his debts.
106. Report of resolution professional:
resolution professional to submit repayment
plan(under S. 105) along with his report
within 21 days from last date of submission
of claims by creditor (under S. 102)
107-113 Summoning, conduct of meeting of creditors,
voting rights, rights of secured creditors,
approval of repayment plan, report of meeting
and notice of decision of meeting.
114 Order of DRT on repayment plan: DRT shall If approved, issuing
by order approve or reject repayment plan directions for
on the basis of report of creditors meeting. implementation
115 (1) Effect of Order on repayment plan:
If approved- to take effect and be binding on
creditors.

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115(2) If rejected- the debtor & creditor entitled
to file an application for bankruptcy under
Chapter IV of the Code.
116-117 Implementation & supervision, completion of
repayment plan and provisions w.r.t. plan
ending prematurely.
118 (3) DRT to pass an order- based on the report of
resolution professional that repayment plan
has not been completely implemented.

118 (4) If the claims of debtor or creditor under

repayment plan have not been fully satisfied:
entitled to apply for bankruptcy order.
119 Discharge Order: On the basis of repayment
plan, the resolution professional to apply for
discharge order.

Circumstances when application for Bankruptcy Order under Chapter IV can

be filed by creditor or debtor
DRT order under S. 100(4) When the IRP application is rejected by DRT
DRT order under S. 115(2) When the repayment plan is rejected by DRT
DRT order under S. 118(3) When repayment plan has not been completely
implemented.
Remark: The application for bankruptcy order under Chapter IV shall be filed
within a period of 3 months of the date of order as stated in the above three
circumstances.

Note: Rules for Part-III of the Code has not yet been notified.

Legends:

i. IBBI- Insolvency & Bankruptcy Board of India

ii. DRT- Debt Recovery Tribunal
iii. IRP- Insolvency Resolution Process
iv. Adjudication Authority- DRT in case of partnership firms & individuals

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