IBC (Amendment) Act 2026: What Changed and What Is Still Pending

The Insolvency and Bankruptcy Code (Amendment) Act 2026 (Act No. 6 of 2026) received the President's assent on 6 April 2026 and is the widest revision of the Insolvency and Bankruptcy Code 2016 since its enactment. It did not take effect on assent. Section 1(2) left commencement to notification, with different dates permitted for different provisions, and the Ministry of Corporate Affairs' notification S.O. 2625(E), dated 22 May 2026 and published in the Gazette on 25 May 2026, appointed 26 May 2026 for most of it. A smaller group — the creditor-initiated process, group insolvency, cross-border insolvency and an electronic portal among them — was left out.

This note maps what operates today, what still awaits commencement, and the transitional rules that decide whether a pending case is caught. The linked notes treat the larger changes in depth.

Key points

• Most of the Amendment Act has been in force since 26 May 2026; Chapter IV-A (creditor-initiated process), Chapter VA (group insolvency) and Sections 240B and 240C have not been notified.
• Admission under Section 7 is now mandatory within fourteen days once default, completeness and the proposed resolution professional's clean record are shown.
• Section 12A withdrawal is moved by the resolution professional and is barred before the committee of creditors exists and after the first invitation for resolution plans.
• Dissenting financial creditors get at least the lower of their liquidation value and their waterfall share (Section 30(2)(ba)); an approved plan now extinguishes prior claims by statute (Section 31(6)).
• Liquidation has been rebuilt around a continuing committee of creditors, a fresh liquidator, a moratorium and a 180-day deadline.
• Sections 74 and 76 are gone; civil penalties imposed by the Adjudicating Authority replace them.

When did the IBC Amendment Act 2026 come into force?

The notification lists sections of the Amendment Act, not the sections of the Code they amend — the usual source of confusion. Section 4 of the Amendment Act rewrites Section 7 of the Code; section 40 inserts Chapter IV-A. The table translates one into the other.

Within section 34, only sub-clause (iii) of clause (a) and clause (b) were notified — the fall in two pre-pack approval thresholds from 66 to 51 per cent. Within section 69 only clause (a) was notified, and within section 70 everything except sub-clause (xx) of clause (b), which concerns regulations for the creditor-initiated process.

What changed at admission under Sections 7, 9 and 10?

Section 7. The substituted Section 7(5) says the Adjudicating Authority "shall", within fourteen days of receipt, admit the application if satisfied that a default has occurred, the application is complete and no disciplinary proceeding is pending against the proposed resolution professional — and reject it otherwise, after a seven-day notice to rectify. Explanation I: where those requirements are complied with, "no other ground shall be considered" to reject. Explanation II: a record of default in respect of a financial debt owed to a financial institution, recorded with an information utility and filed with that institution's application, is sufficient to ascertain default. The old proviso to Section 7(4) is omitted; a new proviso requires reasons to be recorded if the order is not passed within fourteen days. The mechanics are in the note on Section 7 admission.

Section 9. The same reasons-for-delay proviso is added to Section 9(5). Section 215(3) now says an operational creditor shall, before filing under Section 9, submit financial information to an information utility, and new Section 215(4) deems that information authenticated if the debtor does not respond within the specified period. Section 76, which made concealment of a notified dispute an offence, is omitted; Section 67C instead allows a penalty of one lakh to two crore rupees on an operational creditor that concealed a dispute or a full and final payment. The demand-notice stage is covered in the note on the Section 9 demand notice.

Section 10. A corporate applicant no longer proposes its own interim resolution professional. Section 10(3)(b) is omitted, the disciplinary-proceedings test leaves Section 10(4), and new Section 16(3A) requires the Adjudicating Authority to seek the Board's recommendation.

A new proviso to Section 5(11) also fixes the "initiation date", where several applications against one corporate debtor are pending on the insolvency commencement date, as the date the first of them was made.

Can an admitted CIRP still be withdrawn under Section 12A?

Yes, within a narrower window. The substituted Section 12A allows withdrawal on an application by the resolution professional (no longer the applicant creditor) with the approval of ninety per cent of the voting share of the committee of creditors. Section 12A(2) bars withdrawal before the committee is constituted under Section 21(1) and after the first invitation for resolution plans has been issued. The Adjudicating Authority must decide within thirty days. The settlement window is discussed in the note on Section 12A withdrawal.

What did the amendment do to the moratorium and to guarantors?

A new Explanation to Section 14(3)(b) declares that the moratorium also applies where a surety seeks to initiate or continue action against the corporate debtor under a contract of guarantee. The surety's own exposure is untouched: Section 14(3)(b) still keeps guarantors outside the corporate moratorium. The scope question is developed in the note on the Section 14 moratorium.

New Section 28A allows a creditor that has taken possession of a personal or corporate guarantor's asset, by enforcing a security interest under a law empowering it to transfer the asset, to permit its transfer as part of the corporate debtor's resolution, with the committee's prior approval. If the corporate guarantor is itself in CIRP or liquidation, its own committee must approve by sixty-six per cent; if a personal guarantor is in an insolvency or bankruptcy process, more than three-fourths in value of that guarantor's creditors must approve. Proceeds are adjusted against the guarantor's debt, and any surplus goes to the guarantor.

What changed in the conduct of the CIRP?

• Professionals. Under Section 16(2) the professional proposed by a financial creditor becomes the interim resolution professional if no disciplinary proceedings are pending. Under Section 22(3)(a), when the committee resolves to continue that professional, the person is deemed appointed resolution professional from the date of the resolution, and the Board, not the Adjudicating Authority, is informed.
• Claims. Section 18(b) requires claims to be collated in the specified manner, and the interim professional must verify them and, if required, determine their value.
• Cooperation. Section 19(1) now binds anyone who is or has been personnel of the corporate debtor or its promoter, anyone associated with its management, and anyone engaged under a contract for service.
• Voting share. Section 5(28) measures voting share against the debt owed to committee members eligible to vote.
• Plans. The Explanation to Section 5(26) allows a plan to provide for the sale of one or more assets through one or more plans by one or more resolution applicants. Section 30(4) requires the committee to record reasons for approving a plan.

How must a resolution plan treat dissenting financial creditors?

Before 26 May 2026, Section 30(2)(b) guaranteed a dissenting financial creditor not less than its liquidation entitlement under Section 53(1). Clause (b) now deals only with operational creditors, and new clause (ba) guarantees dissenting financial creditors not less than the lower of (i) the amount payable to them in a liquidation under Section 53, or (ii) the amount they would have received had the plan amount been distributed in the Section 53(1) order of priority. Explanation I declares that distribution fair and equitable. Section 30(2)(d) now requires the plan to provide for a committee to implement and supervise it, made up of a resolution or other insolvency professional, creditor representatives and the resolution applicant.

What does approval of a resolution plan now extinguish?

A second proviso to Section 31(1) allows the Adjudicating Authority, on the professional's application backed by sixty-six per cent of the committee, to approve implementation first and the manner of distribution within thirty days after. A proviso to Section 31(2) allows notice to the committee to rectify defects before rejection, and Section 31(2A) requires the order within thirty days of receipt of the plan. Where a plan contains a combination under Section 5 of the Competition Act 2002, the Competition Commission's approval must now come before the plan is submitted under Section 30(6), not before the committee approves it.

New Section 31(5) protects licences, permits, registrations, quotas, concessions and clearances associated with the approved plan from suspension or termination for their remaining period, if the attached obligations are met. New Section 31(6) puts the clean slate into the statute: unless the plan provides otherwise, claims against the corporate debtor and its assets under any law, prior to approval, are extinguished, and no proceedings, including assessment proceedings, may be continued or instituted on them. Explanation I preserves claims against promoters, those in management or control, guarantors and co-obligors; Explanation II extinguishes a co-obligor's right of indemnity for payments made after approval. The guarantor position is examined in the note on personal guarantees after plan approval.

Avoidance transactions and fraudulent or wrongful trading

"Avoidance transaction" (Section 5(2A)) and "fraudulent or wrongful trading" (Section 5(9A)) are now defined terms. The look-back periods in Sections 43(4), 46(1) and 50(1) now run from a point before the initiation date to the insolvency commencement date, catching transactions in the gap between filing and admission. Substituted Section 26 provides that these applications do not affect the CIRP or liquidation, and that completion of either does not end them. Substituted Section 47 lets a creditor, member or partner apply where the professional has not reported such a transaction, and if the professional had the information and failed to report, the Board must be directed to begin disciplinary proceedings. Section 66 now extends to applications by a liquidator, and Section 49's protection for good-faith purchasers no longer covers an interest acquired from a related party of the corporate debtor.

What changed in liquidation, pre-packs and voluntary liquidation?

The committee of creditors now continues and supervises (Sections 21(11) and 35(2)); the Board recommends a liquidator, who cannot be the CIRP's resolution professional (Section 34); the committee can replace the liquidator by sixty-six per cent (Section 34A); a moratorium accompanies the liquidation order (Section 33(1)(b)(iv)); the CIRP can be restored once (Section 33(1A) and (1B)); Sections 38 to 42 are omitted; secured creditors have fourteen days to elect to realise (Section 52(2)); and the liquidator has 180 days, extendable by up to 90 (Section 54(1)). An Explanation to Section 3(31) confines "security interest" to one created by agreement or arrangement between parties, not merely by operation of law, and an Explanation to Section 53(1)(e) ranks government dues for the two years before liquidation at clause (e)(i) whether secured or not, with the rest at clause (f). Each step is set out in Liquidation under the IBC after the 2026 Amendment.

The fast-track process in Sections 55 to 58 (Chapter IV of Part II) is omitted. In the MSME pre-pack, the creditor approvals in Sections 54A(2)(e) and 54A(3) fall from sixty-six to fifty-one per cent, and Sections 54C, 54F, 54L and 54N are amended, as explained in Pre-Packaged Insolvency for MSMEs. A voluntary liquidation under Section 59 must now finish within a specified period not exceeding one year, and new Section 59(5A) to (5C) lets it be terminated by special resolution approved within seven days by creditors holding two-thirds in value of the company's debt.

Penalties instead of prosecutions

Sections 74 and 76 are omitted. Section 67B provides penalties of one lakh to two crore rupees for contraventions of the Section 14 moratorium and, for contravention of an approved plan, one lakh rupees up to one crore rupees or twenty per cent of the amount to be distributed under the plan, whichever is higher. Section 235A is now a civil penalty imposed by the Adjudicating Authority: at least one lakh rupees for each day of contravention, up to three times the loss caused or the unlawful gain, whichever is higher, and capped at five crore rupees where neither is quantifiable. Sections 64A and 183A allow a penalty of one lakh to two crore rupees for initiating a frivolous or vexatious proceeding under Part II or Part III.

Personal guarantors and individual insolvency

• Sections 96(4) and 124(4): no interim moratorium on filing an insolvency or bankruptcy application concerning a personal guarantor to a corporate debtor. The consequences are traced in Section 95: defending a personal guarantor application.
• Section 99: the resolution professional's examination period rises from ten to twenty-one days, and the report goes to both the debtor and the creditor.
• Section 106(1A) and (3A): if no repayment plan is submitted in time, the process is terminated and bankruptcy may follow (now recognised in Section 121(1)(d)); a personal guarantor's creditors' meeting is summoned by written notice.
• Section 164A: undervalued transactions deliberately entered into to defeat creditors can be reversed, with protection for good-faith purchasers for value.
• Section 178: government dues in bankruptcy are ranked on the same two-year basis as in liquidation.

Regulators, information utilities and appeals

Section 61(6) directs the NCLAT to dispose of an appeal within three months of receipt. Section 196 now speaks of "service providers" (insolvency professionals, their agencies, information utilities, registered valuers and other notified categories) and lets the Board specify standards of conduct and decision timelines for committees of creditors. Sections 219 and 220 move enforcement to disciplinary committees, with an appeal to the NCLAT within thirty days, extendable by fifteen. Section 242(1A) gives the Central Government five years to remove difficulties.

What is enacted but not yet in force?

Until a further notification issues, none of the following can be invoked: Chapter IV-A, the creditor-initiated insolvency resolution process, with its cross-references; Chapter VA on group insolvency; Section 240B on an electronic portal; Section 240C on cross-border insolvency; and the Section 224 changes to the Insolvency and Bankruptcy Fund. The Section 239(2) rule-making powers that serve them were held back too.

Which pending cases do the new provisions reach?

The Amendment Act answers this provision by provision:

• Section 30(2)(ba) does not apply where, on or before 26 May 2026, the committee had approved a plan, a liquidation order had been passed, or the committee had approved liquidation.
• Section 31(5) and (6) are deemed to apply to plans approved since the Code's commencement, except matters that have attained finality.
• Section 33(1A) and (1B) apply to processes begun before 26 May 2026 in which no liquidation order has been passed.
• Section 21(11) applies to liquidations begun after that date and to ongoing ones in which the liquidator has not yet applied for dissolution.
• Section 35(1)(a) and (j), the omission of Sections 38 to 42, and new Section 52(2) do not apply to liquidations begun on or before that date.
• Prosecutions under Sections 74 and 76 instituted and pending on that date continue as if the Amendment Act had not been enacted.

A note on scope

This article is general information on the Insolvency and Bankruptcy Code 2016 as amended, and is not legal advice. Several amended provisions depend on regulations made by the Board, and the transitional clauses turn on the dates in a particular file. Check the current regulations and the process record before acting.

The related practice areas are NPA resolution and banking disputes. Enquiries may be directed through the contact page.

Related reading: IBC Guide | Filing Claims in a CIRP | For Banks and NBFCs | Legal Glossary