Section 137: Completion of Administration under the Insolvency and Bankruptcy Code 2016

Part III - Insolvency Resolution and Bankruptcy for Individuals and Partnership Firms | Chapter IV - Administration and Distribution of the Estate of the Bankrupt

Section 137 of the Insolvency and Bankruptcy Code, 2016 sets out the procedure to be followed when the bankruptcy trustee has completed the administration and distribution of the bankrupt's estate. It requires a meeting of the committee of creditors, submission and approval of the administration report, consideration of the trustee's release, and retention of sufficient funds for the cost of the meeting.

Text of Section 137 - Completion of administration

Meaning and legal effect of Section 137

Section 137 operates at the closing stage of administration of a bankrupt's estate. The administration and distribution itself is dealt with by Section 136, while Section 137 prescribes the formal process by which the bankruptcy trustee reports completion to the committee of creditors.

1. Meeting after completion of administration

Under sub-section (1), the bankruptcy trustee must convene a meeting of the committee of creditors after administration and distribution of the bankrupt's estate have been completed in accordance with Chapter V of Part III of the Code. The requirement ensures creditor oversight at the completion stage of the bankruptcy process.

2. Administration report to creditors

Sub-section (2) requires the bankruptcy trustee to provide the committee of creditors with a report on administration of the estate at that meeting. The report enables the committee to review how the estate has been administered and distributed before deciding on its approval and the trustee's release.

3. Seven-day period for approval

Under sub-section (3), the committee of creditors must approve the report within seven days of receiving it. At the same time, the committee determines whether the bankruptcy trustee should be released under Section 148. The seven-day period is therefore an express statutory timeline connected with closure of administration.

4. Connection with Section 148 - release of bankruptcy trustee

Section 148 deals with release of the bankruptcy trustee. Section 137(3) specifically requires the committee of creditors to determine whether the trustee should be released. The completion report and the committee's decision therefore form an important step toward formally concluding the trustee's role, subject to the requirements of the Code.

5. Expenses of the completion meeting

Sub-section (4) requires the bankruptcy trustee to retain enough money from the bankrupt's estate to meet the expenses of convening and conducting the meeting required by Section 137. This prevents the estate from being fully distributed without provision for the statutory completion meeting.

Relationship with Section 138 discharge order

Section 138 links the completion of administration to the bankrupt's discharge. Where the committee of creditors approves completion of administration before expiry of one year from the bankruptcy commencement date, Section 138 requires the bankruptcy trustee to apply to the Adjudicating Authority for a discharge order within seven days of that approval. Section 137 should therefore be read together with Sections 138 and 148.

Key requirements under Section 137

• The bankruptcy trustee completes administration and distribution of the estate in accordance with the Code.
• The trustee convenes a meeting of the committee of creditors.
• The trustee provides a report on administration of the bankrupt's estate.
• The committee of creditors must approve the report within seven days of receipt.
• The committee determines whether the bankruptcy trustee should be released under Section 148.
• The trustee must retain sufficient funds to meet the expenses of the completion meeting.

Current legal framework

Section 137 forms part of the Insolvency and Bankruptcy Code, 2016 and applies within the statutory framework governing bankruptcy of individuals and partnership firms. The provisions relating to personal guarantors to corporate debtors were brought into force from 1 December 2019, and the detailed bankruptcy procedure for that class is governed by the Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, as amended from time to time.

For the latest primary material, see the IBBI legal framework - Acts and the IBBI legal framework database. These official resources should be checked for subsequent amendments, notifications and regulations.

This page is intended as a legal information resource. Always verify the current text of the Code, commencement notifications and applicable regulations before relying on it for a proceeding or professional advice.