Section 107 Summoning of Meeting of Creditors under the Insolvency and Bankruptcy Code, 2016

Section 107 of the Insolvency and Bankruptcy Code, 2016 sets out the procedure for summoning a meeting of creditors during the insolvency resolution process for individuals and partnership firms. It prescribes the minimum notice period, identifies the creditors who must receive notice, specifies the documents that accompany the notice and recognises proxy voting, including electronic proxy voting.

Text of Section 107 - Summoning of meeting of creditors

Meaning and purpose of Section 107

The provision is designed to ensure that creditors receive adequate advance notice and the principal documents needed to consider the repayment plan before participating in the meeting. It connects the list of creditors prepared under Section 104, the repayment plan under Section 105 and the resolution professional's report under Section 106 with the deliberation and voting process that follows.

Minimum fourteen-day notice

Under Section 107(1), the resolution professional must issue notice calling the meeting at least fourteen days before the date fixed for the meeting. This is a statutory minimum notice period and should be read with the meeting timetable specified under Section 106.

Who must receive the notice?

Section 107(2) requires the resolution professional to send the notice to the creditors appearing in the list of creditors prepared under Section 104. The accuracy and completeness of that list are therefore important to the meeting process.

Information and documents accompanying the notice

Address of the Adjudicating Authority

The notice must state the address of the Adjudicating Authority to which the repayment plan and the resolution professional's report on that plan have been submitted.

Copy of the repayment plan

Creditors must receive a copy of the repayment plan prepared under Section 105. This enables them to examine the proposed restructuring before deciding whether it should be approved, modified or rejected.

Statement of affairs of the debtor

The notice must also be accompanied by a copy of the debtor's statement of affairs. This provides financial information relevant to the creditors' consideration of the repayment proposal.

Resolution professional's report

A copy of the report prepared under Section 106 must accompany the notice. The report addresses matters including legal compliance and the prospect of approval and implementation of the repayment plan.

Forms for proxy voting

Section 107(3)(d) requires forms for proxy voting to accompany the meeting notice. Section 107(4) expressly recognises proxy voting, including electronic proxy voting, in the manner and form specified under the applicable regulatory framework.

Personal guarantors to corporate debtors

For personal guarantors to corporate debtors, the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 supplement the Code. The current regulations should be consulted for procedural requirements concerning notices, meetings, voting and other steps in the insolvency resolution process.

What happens at the meeting?

Section 108 governs conduct of the meeting. Creditors may decide to approve, modify or reject the repayment plan. If creditors suggest modifications, the resolution professional must obtain the debtor's consent to each modification. Voting rights are governed by Section 109 and related provisions.

Key points at a glance

• The resolution professional issues the notice calling the creditors' meeting.
• At least fourteen days' notice must be given before the date fixed for the meeting.
• The notice is sent to the creditors included in the list prepared under Section 104.
• The notice must identify the address of the Adjudicating Authority to which the repayment plan and report were submitted.
• The repayment plan, debtor's statement of affairs, resolution professional's report and proxy-voting forms must accompany the notice.
• Proxy voting and electronic proxy voting are recognised, subject to the prescribed or specified procedure.
• Section 108 governs the conduct of the meeting and Section 109 governs creditors' voting rights.

Related provisions

Section 107 should be read with Section 104 on preparation of the list of creditors, Section 105 on the repayment plan, Section 106 on the resolution professional's report, Section 108 on conduct of the creditors' meeting, Section 109 on voting rights, Section 110 on secured creditors and Section 111 on approval of the repayment plan by creditors.

This page provides statutory reference material and general legal information. The current Code, applicable rules, regulations, notifications and binding judicial decisions should be checked for a particular proceeding.