THE INSOLVENCY AND BANKRUPTCY CODE (AMENDMENT) ACT, 2026 PART – X (IRP – PERSONAL GUARANTORS)

Insolvency Resolution Process

Chapter III of Part III of the Code deals with the insolvency resolution process from Sections 94 to 120).   Section 94 enables the personal guarantors to file insolvency resolution process against it.  Section 94 enables the financial creditors to file insolvency resolution process against the personal guarantors in addition to the filing of CIRP against the personal guarantor.

Amendments

The Act brings many amendments in the personal guarantor processes. 

Moratorium

Section 96 provides for the declaration of interim moratorium to be declared by the Adjudicating Authority.  The Act proposed to insert a new section 96(4), which provides that the provisions of this section shall not apply where an application is filed for initiating an insolvency resolution process in respect of a personal guarantor to a corporate debtor. 

Submission of report by IRP

Section 99(1) provides that the resolution professional shall examine the application referred to in Section 94 or section 95, as the case may be, within 10 days of his appointment, and submit a report to the Adjudicating Authority recommending for approval or rejection of the application.  Now the Act proposed to extend this 10 days’ time to 21 days’ time.

Section 99(10) after amendment provides that the resolution professional shall give a copy of the report to the debtor and the creditor. 

Report on repayment plan

Section 106 provides the procedure for the submission of the report of Resolution Professional on repayment plan before the Adjudicating Authority.

The Act proposed to insert new Sections 106(1A) and 106(3A).  The newly inserted section 106(1A) provides that where no repayment plan is submitted within the period stipulated under sub-section (1), the resolution professional shall submit a report to the Adjudicating Authority, and the Adjudicating Authority shall pass an order terminating the insolvency resolution process of the debtor and the debtor or the creditors shall be entitled to file an application for bankruptcy under Chapter IV.

The newly inserted Section 106(3A) provides that where the repayment plan is in respect of the debtor who is a personal guarantor to a corporate debtor, the resolution professional shall summon the meeting of the creditors by issuing a notice in writing specifying therein the date, time and place of such meeting.

Amendments to Regulations

The Board, in order to cope up with the amendments caused to the Code in respect of insolvency resolution of personal guarantors proposed to amend the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors) Regulations, 2019.

The Act proposed to omit the definition of the term ‘form’ in regulation 2(3)(e).

Regulation 4(2), after incorporating the amendment, provides that an insolvency professional, other than who has filed an application under section 94 or 95 on behalf of a guarantor or a creditor, as the case may be, shall provide a written consent in such form as notified by the Board through circular, to the Adjudicating Authority before his appointment as resolution professional in a resolution process.

The amendment proposed to insert Regulation 6A providing for the submission of Statement of assets.  The newly inserted Regulation 6A (1) provides that for the purposes of section 94 and 95, along with the application for initiating the insolvency resolution process to be submitted to the Adjudicating Authority, a complete and true statement of all assets including the following, with supporting evidence, shall also be submitted-

• Cash and Bank Deposits - Cash in hand; balances in savings or current accounts; fixed deposits; recurring deposits; post office savings instruments; and balances held in digital wallets or similar instruments;
• Business Interests and Commercial Assets - Any ownership, whether sole or joint, in a proprietorship, partnership, limited liability partnership, or company, including all associated assets such as inventory, plant and machinery, tools of trade, professional equipment, and goodwill;
• Investments (Domestic and Overseas) - Investments in shares, debentures, bonds, mutual funds, government securities, and any other financial instruments, including investments made outside India such as foreign bank accounts, securities, and immovable properties;
• Immovable Property - All rights, title, or interest in immovable property, including residential, commercial, or industrial property, agricultural land, and leasehold or freehold interests.
• Retirement and Provident Fund Assets - Balances or entitlements in provident funds, pension funds, gratuity, superannuation funds, and any other retirement benefit schemes;
• Digital Assets - Cryptocurrencies, virtual digital assets, non-fungible tokens, digital tokens, and domain names or other digital properties having commercial value;
• Intellectual Property and Intangible Assets - Patents, trademarks, copyrights, licences, franchises, brand value, goodwill, royalty rights, and any other intangible assets;
• Valuable Movable Assets - Jewellery, precious metals and stones, works of art, antiques, collectibles, watches, and high-value electronic or personal assets;
• Receivables and Advances - Trade receivables, loans and advances given, tax refunds due, security deposits, salary arrears, and any other sums receivable;
• Claims and Contingent Assets - Claims under litigation or arbitration, insurance claims, expected inheritances, and beneficial interests under trusts or similar arrangements;
• Claims and Contingent Assets - Claims under litigation or arbitration, insurance claims, expected inheritances, and beneficial interests under trusts or similar arrangements;
• ESOPs and Beneficial Ownership Interests - Employee stock options (ESOPs) (whether vested or unvested), securities or assets held through nominees, and any beneficial interest in any entity, trust, or arrangement.

For the purposes of an application under section 95, the creditor shall file information relating to the assets of the individual to the extent available with the creditor.

Regulation 6A (2) provides that the statement of assets shall mandatorily include-

• assets owned directly or indirectly, whether in the name of the individual or otherwise;
• assets held individually or jointly with any other person;
• assets held in a fiduciary capacity, including as trustee, guardian, executor, or partner;
• assets held through beneficial ownership structures, including through nominees, trusts, partnerships, companies, Hindu Undivided Families, or any other arrangement conferring beneficial interest or control; and
• any asset over which the individual exercises control, influence, or derives economic benefit, irrespective of legal title.

Claim form

Regulation 7(1), after incorporating the amendments, provides that a creditor shall submit its claim along with proof to the resolution professional in such form as may be notified by the Board through circular, on or before the last date mentioned in the public notice issued under sub-section (1) of section 102.

Meeting of creditors

Regulation 11(3), after incorporating the amendment, provides that the resolution professional shall convene the first meeting of creditors in accordance with sub-section (3A) of section 106 and shall convene the meeting, by giving such notice to the other participants as decided by the creditors, which shall not less than forty-eight hours.

Facilitation of transfer of asset

The amendment inserted a new Regulation 11A.  This provisions provides that where the debtor is a personal guarantor who is undergoing an insolvency resolution process, the resolution professional of such debtor which has given the personal guarantee shall coordinate with the resolution professional of the corporate debtor in respect of whom such guarantee has been given, regarding transfer of asset in the corporate insolvency resolution process of the corporate debtor in respect of whom such guarantee has been given for the purposes of section 28A. 

For the purposes of section 28A, the resolution professional shall obtain approval from the meeting of creditors of the debtor which has given the personal guarantee to transfer of asset in the corporate insolvency resolution process of the corporate debtor in respect of whom such guarantee has been given.

Where approval is granted by the meeting of creditors permitting the transfer, the resolution professional of debtor shall ensure that the proposed transfer is appropriately disclosed in the report under section 106 and section 112.

Voting by proxy

Regulation 16(2), after incorporating the amendment, provides that for the purpose of sub-regulation (1), a creditor shall deliver in such form as may  be notified by the Board through Circular, duly completed to the resolution professional at least twenty-four hours prior to the meeting of creditors.

Non submission of repayment plan

Regulation 17B, after incorporating the amendments, provides that where no repayment plan has been prepared by the debtor under section 105 of the Code, the resolution professional shall file an application, with the approval of creditors, before the Adjudicating Authority in accordance with the sub section (1A) of Section 106.