Section 138: Discharge Order under the Insolvency and Bankruptcy Code, 2016

Section 138 of the Insolvency and Bankruptcy Code, 2016 (IBC) governs the discharge order in the bankruptcy process under Part III of the Code. It specifies when the bankruptcy trustee must apply to the Adjudicating Authority and requires a copy of the discharge order to be provided to the Insolvency and Bankruptcy Board of India for the statutory register.

Updated: 30 September 2026

Section 138 - Discharge order

(1) The bankruptcy trustee shall apply to the Adjudicating Authority for a discharge order -

(a) on the expiry of one year from the bankruptcy commencement date; or

(b) within seven days of the approval of the committee of creditors of the completion of administration of the estates of the bankrupt under section 137, where such approval is obtained prior to the period mentioned in clause (a).

(2) The Adjudicating Authority shall pass a discharge order on an application by the bankruptcy trustee under sub-section (1).

(3) A copy of the discharge order shall be provided to the Board for the purpose of recording an entry in the register referred to in section 196.

Meaning and operation of Section 138

Section 138 creates the statutory route for discharge in the bankruptcy process. The application is made by the bankruptcy trustee to the Adjudicating Authority. Under Part III of the IBC, a bankruptcy trustee is the insolvency professional appointed as trustee for the estate of the bankrupt, while a discharge order is an order of the Adjudicating Authority discharging the debtor under the applicable provisions of the Code.

1. Application after one year

Under section 138(1)(a), the bankruptcy trustee must apply for a discharge order on the expiry of one year from the bankruptcy commencement date. The bankruptcy commencement date is linked to the date on which the bankruptcy order is passed by the Adjudicating Authority.

2. Earlier application after completion of administration

Section 138(1)(b) permits the application to arise earlier. Where the committee of creditors approves completion of administration of the bankrupt's estate under section 137 before the one-year period expires, the bankruptcy trustee must apply for the discharge order within seven days of that approval.

3. Order by the Adjudicating Authority

Section 138(2) provides that the Adjudicating Authority shall pass a discharge order on the bankruptcy trustee's application under sub-section (1). The provision therefore connects the trustee's statutory application with the formal discharge order passed by the Adjudicating Authority.

4. Entry in the statutory register

Under section 138(3), a copy of the discharge order must be provided to the Insolvency and Bankruptcy Board of India (the Board) so that an entry can be recorded in the register referred to in section 196.

Related effect: Section 139 deals with the effect of a discharge order under section 138, including the release of the bankrupt from bankruptcy debts subject to the exceptions stated in that section.

Key provisions connected with Section 138

Section 137 - Completion of administration: deals with the meeting of the committee of creditors and approval of the bankruptcy trustee's report on administration of the estate.
Section 139 - Effect of discharge: specifies the legal effect of the discharge order and the debts or matters that are not affected by discharge.
Section 196: contains powers and functions of the Board and is the provision referred to in section 138(3) for recording the relevant entry in the register.

Practical timeline under Section 138

The normal statutory point for applying for discharge is the expiry of one year from the bankruptcy commencement date. If administration of the bankrupt's estate is completed and approved by the committee of creditors under section 137 before that one-year point, section 138(1)(b) requires the bankruptcy trustee to apply within seven days of that approval.

Official legal resources

For the latest consolidated legislation, amendments, regulations and official insolvency framework, refer to the official resources listed in the sidebar. The statutory text should be read together with applicable commencement notifications, rules, regulations and judicial decisions relevant to the particular bankruptcy process.