Section 152: General Powers of Bankruptcy Trustee
Section 152 of the Insolvency and Bankruptcy Code, 2016 sets out the general powers that a bankruptcy trustee may exercise while discharging functions relating to the estate of a bankrupt under the relevant Chapter of the Code.
Meaning and scope of Section 152
A bankruptcy trustee administers the bankruptcy estate in accordance with the Insolvency and Bankruptcy Code, 2016 and the applicable rules and regulations. Section 152 identifies powers that enable the trustee to realise, protect, recover, transfer and otherwise deal with property forming part of the bankrupt's estate.
These powers operate within the statutory bankruptcy framework and should be read with related provisions, including Section 151 on the rights of the bankruptcy trustee, Section 153 on acts requiring approval of the committee of creditors, and Section 154 on vesting of the bankrupt's estate in the bankruptcy trustee.
Text of Section 152 - General powers of bankruptcy trustee
The bankruptcy trustee may while discharging his functions under this Chapter,-
(a) sell any part of the estate of the bankrupt;
(b) give receipts for any money received by him;
(c) prove, rank, claim and draw a dividend in respect of such debts due to the bankrupt as are comprised in his estate;
(d) where any property comprised in the estate of the bankrupt is held by any person by way of pledge or hypothecation, exercise the right of redemption in respect of any such property subject to the relevant contract by giving notice to the said person;
(e) where any part of the estate of the bankrupt consists of securities in a company or any other property which is transferable in the books of a person, exercise the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt; and
(f) deal with any property comprised in the estate of the bankrupt to which the bankrupt is beneficially entitled in the same manner as he might have dealt with it.
Explanation of the bankruptcy trustee's powers
Sale of property of the bankrupt estate
Clause (a) authorises the bankruptcy trustee to sell any part of the estate of the bankrupt. This power facilitates realisation of estate assets for administration and distribution in accordance with the Code.
Receipt of money
Under clause (b), the trustee may give valid receipts for money received while administering the bankruptcy estate.
Recovery of debts and dividends
Clause (c) enables the trustee to prove, rank and claim debts that are due to the bankrupt and form part of the estate, and to draw dividends in respect of those debts.
Redemption of pledged or hypothecated property
Where estate property is held by another person by way of pledge or hypothecation, clause (d) permits the trustee to exercise the right of redemption, subject to the relevant contract and after giving notice to that person.
Transfer of securities and transferable property
Clause (e) applies where the estate includes securities in a company or other property transferable in the books of a person. The trustee may exercise the right of transfer to the same extent that the bankrupt could have exercised it had bankruptcy not occurred.
Dealing with beneficially owned property
Clause (f) permits the trustee to deal with property comprised in the estate to which the bankrupt is beneficially entitled in the same manner in which the bankrupt could have dealt with that property.
Section 152 and related provisions
Section 152 provides general administrative powers, but it does not operate in isolation. Section 153 separately identifies specified acts for which the bankruptcy trustee may act after procuring approval of the committee of creditors. The composition of the estate and its vesting in the trustee are dealt with by Section 154 and Section 155.