Section 129 - Statement of Financial Position under the Insolvency and Bankruptcy Code 2016

Section 129 of the Insolvency and Bankruptcy Code, 2016 deals with the statement of financial position that must be submitted after a bankruptcy order is passed on a creditor's bankruptcy application under Section 123.

Key requirement: Where the bankruptcy order results from an application by a creditor under Section 123, the bankrupt must submit the statement of financial position to the bankruptcy trustee within seven days from the bankruptcy commencement date.

Text and requirements of Section 129

Section 129(1): Where a bankruptcy order is passed on an application for bankruptcy by a creditor under Section 123, the bankrupt shall submit his statement of financial position to the bankruptcy trustee within seven days from the bankruptcy commencement date.

Section 129(2): The statement of financial position is to be submitted in the form and manner prescribed under the applicable legal framework.

Section 129(3): Where the bankrupt is a firm, the persons who are partners on the date of the bankruptcy order must submit a joint statement of the financial position of the firm. Each such partner must also submit a statement of his own financial position.

Section 129(4): The bankruptcy trustee may require the bankrupt or any other person to provide further information in writing explaining or modifying any matter contained in the statement of financial position.

Meaning and purpose of the statement of financial position

The statement of financial position is intended to provide the bankruptcy trustee with financial information necessary for administration of the bankruptcy process. Section 129 is particularly relevant where the bankruptcy proceeding was initiated by a creditor, because the bankrupt is expressly required to furnish the statement after the bankruptcy order.

The seven-day period under Section 129(1) runs from the bankruptcy commencement date. Under the Code, that expression is connected with the date on which the bankruptcy order is passed by the Adjudicating Authority.

Section 123 - Creditor's application for bankruptcy

Section 129(1) applies where the bankruptcy order has been passed on an application made by a creditor under Section 123. Section 123 governs an application for bankruptcy by a creditor in the circumstances specified by the Code.

Role of the bankruptcy trustee

The statement is submitted to the bankruptcy trustee. In addition to receiving the statement, Section 129(4) expressly empowers the trustee to seek further written information from the bankrupt or another person where clarification, explanation or modification of information in the statement is required.

Special rule where the bankrupt is a firm

Section 129(3) creates a two-level disclosure requirement for a firm. The partners on the date of the bankruptcy order must provide a joint statement concerning the firm's financial position, while each partner must separately provide a statement concerning that partner's own financial position.

Related provisions

Official legal resources

For the current statutory text, amendments, rules, regulations and official forms, readers should verify the latest material published by the Insolvency and Bankruptcy Board of India - Acts, the IBBI Legal Framework and India Code.

Note: Bankruptcy provisions concerning individuals and partnership firms operate subject to the commencement notifications and the applicable rules and regulations. For a particular proceeding, the category of debtor and the legal framework brought into force for that category should be checked.

This page is an informational presentation of Section 129 and connected provisions of the Insolvency and Bankruptcy Code, 2016. Official statutory and regulatory sources should be consulted for the text applicable to a particular matter.