Insolvency and Bankruptcy Code 2016 / Section 126

Section 126: Bankruptcy Order

Section 126 of the Insolvency and Bankruptcy Code, 2016 prescribes when the Adjudicating Authority must pass a bankruptcy order after confirmation or nomination of the bankruptcy trustee under Section 125 and specifies the documents that must then be supplied.

Current legal context: The Insolvency and Bankruptcy Code was further amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2026. Section 126 continues to form part of Chapter IV of Part III and should be read with the provisions currently in force, including Sections 125, 127 and 128 and the applicable rules and regulations.

Section 126 - Statutory provision

(1) The Adjudicating Authority shall pass a bankruptcy order within fourteen days of receiving the confirmation or nomination of the bankruptcy trustee under section 125.

(2) The Adjudicating Authority shall provide the following documents to bankrupt, creditors and the bankruptcy trustee within seven days of the passing of the bankruptcy order, namely:-

(a) a copy of the application for bankruptcy; and

(b) a copy of the bankruptcy order.

Meaning and operation of Section 126

A bankruptcy application under Chapter IV proceeds through the statutory process preceding the bankruptcy order. Under Section 125, the insolvency professional proposed as bankruptcy trustee is confirmed, or another bankruptcy trustee is nominated, in accordance with that provision. Section 126 then fixes the period within which the Adjudicating Authority is to pass the bankruptcy order.

14 daysThe bankruptcy order is to be passed within fourteen days after receipt of the confirmation or nomination of the bankruptcy trustee under Section 125.

7 daysWithin seven days after the bankruptcy order is passed, the specified documents are to be provided to the bankrupt, creditors and bankruptcy trustee.

Documents required after the bankruptcy order

Sub-section (2) requires the Adjudicating Authority to provide two documents: a copy of the application for bankruptcy and a copy of the bankruptcy order. These are to be supplied to the bankrupt, the creditors and the bankruptcy trustee within the prescribed seven-day period.

Bankruptcy commencement date

Under Part III of the Code, the "bankruptcy commencement date" means the date on which the Adjudicating Authority passes the bankruptcy order under Section 126. The passing of the order is therefore the statutory event from which provisions linked to the bankruptcy commencement date operate.

What happens after a Section 126 order?

Section 127 deals with the validity of the bankruptcy order and provides for its continuation until discharge under Section 138. Section 128 deals with the effect of the bankruptcy order, including the vesting and administration of the bankrupt's estate in accordance with the Code.

Related official resources

For the latest Act, amendments, rules, regulations, notifications, circulars and guidelines, refer to the IBBI Acts page, the IBBI Legal Framework and the India Code portal.