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List of Penalties

Offences and Penalties under the Insolvency and Bankruptcy Code, 2016

Section Offence Authority Penalty
65(1) If any person initiates the insolvency resolution process or liquidation proceedings fraudulently or with malicious intent for any purpose other than for the resolution of insolvency, or liquidation, as the case may be. NCLT Penalty:-
Minimum 1 lakh rupees which may extend to 1 crore rupees.
65(2) If any person initiates voluntary liquidation proceedings with the intent to defraud any person. NCLT Penalty:-
Minimum 1 lakh rupees which may extend to 1 crore rupees.
68 Where any officer of the corporate debtor has,—
(i) within the twelve months immediately preceding the insolvency commencement date,—
(a) wilfully concealed any property or part of such property of the corporate debtor or concealed any debt due to, or from, the corporate debtor, of the value of ten thousand rupees or more; or
(b) fraudulently removed any part of the property of the corporate debtor of the value of ten thousand rupees or more; or
(c) wilfully concealed, destroyed, mutilated or falsified any book or paper affecting or relating to the property of the corporate debtor or its affairs, or
(d) wilfully made any false entry in any book or paper affecting or relating to the property of the corporate debtor or its affairs, or
(e) fraudulently parted with, altered or made any omission in any document affecting or relating to the property of the corporate debtor or its affairs; or
(f) wilfully created any security interest over, transferred or disposed of any property of the corporate debtor which has been obtained on credit and has not been paid for unless such creation, transfer or disposal was in the ordinary course of the business of the corporate debtor; or
(g) wilfully concealed the knowledge of the doing by others of any of the acts mentioned in clauses (c) , (d) or clause (e) ; or
(ii) at any time after the insolvency commencement date, committed any of the acts mentioned in sub-clause (a) to (f) of clause (i) or has the knowledge of the doing by others of any of the things mentioned in sub-clauses (c) to (e) of clause (i) ; or
(iii) at any time after the insolvency commencement date, taken in pawn or pledge, or otherwise received the property knowing it to be so secured, transferred or disposed,
Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum 3 years which may extend to 5 years,
or
Fine:-
Minimum 1 lakh rupees which may extend to 1 crore rupees,
or
Both.
69 On or after the insolvency commencement date, if an officer of the corporate debtor or the corporate debtor:-
(a) has made or caused to be made any gift or transfer of, or charge on, or has caused or connived in the execution of a decree or order against, the property of the corporate debtor;
(b) has concealed or removed any part of the property of the corporate debtor within two months before the date of any unsatisfied judgment, decree or order for payment of money obtained against the corporate debtor.
Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum one year which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
70(1) On or after the insolvency commencement date, where an officer of the corporate debtor —
(a) does not disclose to the resolution professional all the details of property of the corporate debtor, and details of transactions thereof, or any such other information as the resolution professional may require; or
(b) does not deliver to the resolution professional all or part of the property of the corporate debtor in his control or custody and which he is required to deliver; or
(c) does not deliver to the resolution professional all books and papers in his control or custody belonging to the corporate debtor and which he is required to deliver; or
(d) fails to inform the resolution professional the information in his knowledge that a debt has been falsely proved by any person during the corporate insolvency resolution process; or
(e) prevents the production of any book or paper affecting or relating to the property or affairs of the corporate debtor; or
(f) accounts for any part of the property of the corporate debtor by fictitious losses or expenses, or if he has so attempted at any meeting of the creditors of the corporate debtor within the twelve months immediately preceding the insolvency commencement date.
Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum three years which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
70(2) If an insolvency professional deliberately contravenes the provisions of this code. Special Court established under the Companies Act, 2013 Imprisonment:-
which may extend to 6 months,
or
Fine:-
Minimum 1 lakh rupees which may extend to 5 lakhs rupees,
or
Both.
71 On and after the insolvency commencement date, where any person destroys, mutilates, alters or falsifies any books, papers or securities, or makes or is in the knowledge of making of any false or fraudulent entry in any register, book of account or document belonging to the corporate debtor with intent to defraud or deceive any person. Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum three years which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
72 Where an officer of the corporate debtor makes any material and wilful omission in any statement relating to the affairs of the corporate debtor. Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum three years which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
73 Where any officer of the corporate debtor —
(a) on or after the insolvency commencement date, makes a false representation or commits any fraud for the purpose of obtaining the consent of the creditors of the corporate debtor or any of them to an agreement with reference to the affairs of the corporate debtor, during the corporate insolvency resolution process, or the liquidation process;
(b) prior to the insolvency commencement date, has made any false representation, or committed any fraud, for that purpose.
Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum three years which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
74(1) Where the corporate debtor or any of its officer violates the provisions of moratorium, any such officer who knowingly or wilfully committed or authorised or permitted such contravention- Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum three years which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to three lakhs rupees,
or
Both.
74(2) Where any creditor violates the provisions of moratorium, any person who knowingly or wilfully authorised or permitted such contravention by a creditor- Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum one year which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
74(3) Where the corporate debtor, any of its officers or creditors or any person on whom the approved resolution plan is binding, knowingly and wilfully contravenes any of the terms of such resolution plan or abets such contravention, such corporate debtor, officer, creditor or person- Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum one year which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
75 Where any person furnishes information in the application made under section 7, which is false in material particulars, knowing it to be false or omits any material fact, knowing it to be material. Special Court established under the Companies Act, 2013 Fine:-
Minimum one lakh rupees which may extend to one crore rupees.
76 Where an operational creditor has wilfully or knowingly concealed in an application made by him under section 9 the fact that the corporate debtor had notified him of a dispute in respect of the unpaid operational debt or the full and final repayment of the unpaid operational debt; or any person who knowingly and willfully authorised or permitted such concealment, the operational creditor or person- Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum one year which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
77 Where a corporate debtor provides information in the application made by him, which is false in material particulars, knowing it to be false and omits any material fact, knowing it to be material or any person who knowingly and wilfully authorised or permitted the furnishing of such information, such corporate debtor or person- Special Court established under the Companies Act, 2013 Imprisonment:-
Minimum three years which may extend to five years,
or
Fine:-
Minimum one lakh rupees which may extend to one crore rupees,
or
Both.
184(1) If a debtor or creditor provides information which is false in any material particulars to the resolution professional. Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to one year,
or
Fine:-
which may extend to five lakh rupees,
or
Both.
184(2) If a creditor promises to vote in favour of the repayment plan dishonestly by accepting any money, property or security from the debtor. Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to two years,
or
Fine:-
If amount is quantifiable- maximum three times the amount or its equivalent of such money, property or security accepted by such creditor,
If amount is not quantifiable- which may extend to 5 lakhs rupees,
or
Both.
185 If an insolvency professional deliberately contravenes the provisions of the insolvency and bankruptcy for individuals and partnership firms. Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to six months,
or
Fine:-
Minimum one lakh rupees which may extend to five lakhs rupees,
or
Both.
186(a) If the bankrupt knowingly makes a false representation or wilfully omits or conceals any material information while making an application for bankruptcy by a debtor. Special Court established under the Companies Act, 2013 Imprisonment:-
Maximum six months,
or
Fine:-
Maximum five lakhs rupees,
or
Both.
186(b) If the bankrupt fraudulently has failed to provide or deliberately withheld the production of, destroyed, falsified or altered, his books of accounts, financial information and other records under his custody or control. Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to one year,
or
Fine:-
which may extend to five lakhs rupees,
or
Both.
186(c) If the bankrupt has contravened the restrictions under section 140 or the provisions of section 141 Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to six months,
or
Fine:-
which may extend to five lakhs rupees,
or
Both.
186(d) If the bankrupt has failed to deliver the possession of any property comprised in the estate of the bankrupt under his possession or control, which he is required to deliver under section 156. Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to six months,
or
Fine:-
which may extend to five lakhs rupees,
or
Both.
186(e) If the bankrupt has failed to account, without any reasonable cause or satisfactory explanation, for any loss incurred of any substantial part of his property comprised in the estate of the bankrupt from the date which is twelve months before the filing of the bankruptcy application. Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to two years,
or
Fine:-
If loss is quantifiable- up to three times of the value of the loss,
If loss is not quantifiable- which may extend to five lakhs rupees,
or
Both.
186(f) If the bankrupt has absconded or attempts to absconds after the bankruptcy commencement date. Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to one year,
or
Fine:-
which may extend to five lakhs rupees,
or
Both.
187 If a bankruptcy trustee, —
(a) has fraudulently misapplied, retained or accounted for any money or property comprised in the estate of the bankrupt; or
(b) has wilfully acted in a manner that the estate of the bankrupt has suffered any loss in consequence of breach of any duty of the bankruptcy trustee in carrying out his functions under section 149-
Special Court established under the Companies Act, 2013 Imprisonment:-
for a term which may extend to three years,
or
Fine:-
If loss is quantifiable- minimum three times of the loss caused or likely to have been caused, to persons concerned on account of such contravention,
If loss is not quantifiable- which may extend to five lakhs rupees,
or
Both.
220(3) Where any insolvency professional agency or insolvency professional or an information utility has contravened any provision of this Code or rules or regulations made thereunder. Disciplinary committee Penalty:-
Three times the amount of the loss caused, or likely to have been caused, to persons concerned on account of such contravention, or
Three times the amount of the unlawful gain on account of such contravention,
whichever is higher.
Where such loss is not quantifiable, penalty may extend to one crore rupees.
The Disciplinary Committee may suspend, or cancel the registration of insolvency professional agency or information utility as the case may be.