Section 113: Notice of Decisions Taken at Meeting of Creditors

Section 113 of the Insolvency and Bankruptcy Code, 2016 deals with communication of the report of the meeting of creditors. It requires the resolution professional to provide a copy of the prescribed report to the debtor, all creditors including creditors who did not attend the meeting, and the Adjudicating Authority.

Text of Section 113

Meaning and purpose of Section 113

The provision ensures that the outcome of the creditors' meeting is formally communicated beyond the creditors who actually attended. The duty is placed on the resolution professional, who must provide a copy of the report to each class of recipient specified by the section.

The requirement supports transparency in the individual insolvency resolution process by ensuring that the debtor, absent as well as participating creditors, and the Adjudicating Authority receive the meeting report.

Who must receive the report?

1. The debtor

The debtor is expressly entitled to receive a copy of the report. This keeps the debtor informed of the decisions emerging from the creditors' meeting and the status of the repayment-plan process.

2. All creditors, including absent creditors

The obligation is not confined to creditors who attended or were represented at the meeting. Section 113 specifically includes creditors who were not present. Accordingly, absence from the meeting does not exclude a creditor from receiving the report.

3. The Adjudicating Authority

A copy must also be provided to the Adjudicating Authority. Under the Code, the Adjudicating Authority for insolvency resolution and bankruptcy of individuals and partnership firms is governed by the applicable provisions of Part III and the commencement framework of the Code.

Relationship with Sections 111, 112 and 114

Section 111 prescribes the creditor voting requirement for approval of the repayment plan or a modification to it. Section 112 deals with the report of the meeting of creditors on the repayment plan and specifies information that the report must contain.

Section 113 addresses distribution of the meeting report to the debtor, creditors and the Adjudicating Authority. The process then moves to Section 114, which deals with the order of the Adjudicating Authority on the repayment plan.

Why notice to absent creditors matters

The express inclusion of creditors who were not present at the meeting prevents the statutory communication process from being restricted to meeting participants. It gives all creditors covered by the provision access to the formal report and the decisions recorded through the insolvency process.

Related provisions after Section 113

Following the notice requirement, Sections 114 to 120 address the Adjudicating Authority's order on the repayment plan, the effect of that order, implementation and supervision of the plan, completion of the plan, premature termination, discharge and the standard of conduct applicable to the resolution professional.

Official legal resources

For the current text of the Code, amendments, rules, regulations, notifications and other insolvency materials, refer to the IBBI Legal Framework and the India Code portal. The effective date and scope of any notification or amendment should be checked for the particular insolvency proceeding.

This article is for legal information. Application of the Code may depend on the category of debtor or guarantor, commencement notifications, applicable rules and regulations, and the facts of the proceeding.