Section 130 - Public Notice Inviting Claims from Creditors under IBC 2016

Section 130 of the Insolvency and Bankruptcy Code, 2016 provides for notice to identified creditors and a public notice inviting claims after commencement of bankruptcy. It forms part of Chapter IV dealing with bankruptcy orders for individuals and partnership firms.

Key requirement: The Adjudicating Authority must send notices within ten days of the bankruptcy commencement date to the creditors specified in Section 130(1)(a) and must issue a public notice inviting claims from creditors.

Section 130 - Statutory requirements

Section 130(1): The Adjudicating Authority shall:

(a) send notices within ten days of the bankruptcy commencement date to the creditors mentioned in:

(i) the statement of affairs submitted by the bankrupt under Section 129; or

(ii) the application for bankruptcy submitted by the bankrupt under Section 122; and

(b) issue a public notice inviting claims from creditors.

Section 130(2): The public notice must include the last date up to which claims are to be submitted and such other prescribed matters and details. It must be published in leading newspapers, one in English and another in the vernacular having sufficient circulation where the bankrupt resides, affixed on the premises of the Adjudicating Authority and placed on the website of the Adjudicating Authority.

Section 130(3): The individual notice sent to creditors under Section 130(1)(a) must contain the matters and details prescribed under the applicable rules.

Purpose of the public notice

The public notice provides a formal opportunity for creditors to come forward and submit their claims in the bankruptcy process. It supplements direct notice to creditors already identifiable from the bankrupt's financial disclosures or bankruptcy application.

Ten-day requirement for notice to creditors

Section 130(1)(a) expressly requires notices to be sent within ten days from the bankruptcy commencement date. The creditors covered by this requirement are those identified from the statement referred to in Section 129 or the debtor's bankruptcy application under Section 122, as applicable.

Publication of the public notice

Section 130(2) requires publication through more than one channel. The notice is to appear in leading English and vernacular newspapers having sufficient circulation where the bankrupt resides. It is also to be displayed at the premises of the Adjudicating Authority and on its website. These publication requirements are intended to give creditors reasonable notice of the bankruptcy and the deadline for claims.

Last date for submission of claims

The public notice must state the last date up to which creditor claims may be submitted. The detailed procedure for submission and registration of claims must be read with the provisions following Section 130 and the applicable rules and regulations governing the relevant bankruptcy process.

Meaning of Adjudicating Authority

The expression Adjudicating Authority is defined by the Insolvency and Bankruptcy Code according to the class of debtor and the proceeding concerned. For bankruptcy proceedings to which these provisions have been brought into force, jurisdiction must therefore be determined from the Code, commencement notifications and the applicable rules.

Connected provisions

Section 122 - Application by debtor Section 123 - Application by creditor Section 126 - Bankruptcy order Section 128 - Effect of bankruptcy order Section 129 - Statement of financial position Insolvency and Bankruptcy Code 2016

Official legal resources

For the current statutory text and applicable subordinate legislation, refer to the Insolvency and Bankruptcy Board of India - Acts, the IBBI Updated Legal Framework and India Code.

Important: The individual and partnership bankruptcy provisions of the Code are subject to commencement notifications and category-specific rules and regulations. Their application should be checked for the particular class of debtor involved.

This article is intended as a legal information resource. The current official text, commencement notifications, rules, regulations and orders applicable to the particular bankruptcy proceeding should be verified.