Insolvency and Bankruptcy Code 2016 / Section 35

Section 35: Powers and Duties of Liquidator under the Insolvency and Bankruptcy Code, 2016

Section 35 of the Insolvency and Bankruptcy Code, 2016 sets out the statutory powers and duties of the liquidator in a corporate liquidation. The provision operates subject to directions of the Adjudicating Authority and must now be read with the Insolvency and Bankruptcy Code (Amendment) Act, 2026 and the applicable IBBI (Liquidation Process) Regulations, 2016.

Current legal position: The Insolvency and Bankruptcy Code (Amendment) Act, 2026 amended Section 35. The relevant amendment came into force on 26 May 2026. Among the changes, clause (a) now requires maintenance of an updated list of creditors' claims, clause (j) no longer requires the liquidator to invite claims, clause (l) deals with proceedings concerning avoidance transactions or fraudulent or wrongful trading, and sub-section (2) provides for supervision of the liquidation process by the committee of creditors.

Meaning and scope of Section 35

The liquidator is the insolvency professional responsible for administering the liquidation of the corporate debtor in accordance with the Code, the orders of the Adjudicating Authority and regulations made by the Insolvency and Bankruptcy Board of India. Section 35 is the principal provision describing the liquidator's operational powers, including control and preservation of assets, beneficial continuation of business where necessary, sale of assets, settlement of claims, distribution of proceeds, conduct of litigation and steps required to complete liquidation.

For corporate persons, the Adjudicating Authority is the National Company Law Tribunal having jurisdiction under Section 60 of the Code. The expression Board refers to the Insolvency and Bankruptcy Board of India. The liquidator's powers under Section 35 are therefore not unrestricted; they remain subject to the Code, applicable regulations, directions of the Tribunal and, under the amended framework, statutory supervision by the committee of creditors.

Updated text of Section 35

35. Powers and duties of liquidator

(1) Subject to the directions of the Adjudicating Authority, the liquidator shall have the following powers and duties, namely:-

(a) to maintain an updated list of claims of creditors in such manner as may be specified;

(b) to take into his custody or control all the assets, property, effects and actionable claims of the corporate debtor;

(c) to evaluate the assets and property of the corporate debtor in the manner as may be specified by the Board and prepare a report;

(d) to take such measures to protect and preserve the assets and properties of the corporate debtor as he considers necessary;

(e) to carry on the business of the corporate debtor for its beneficial liquidation as he considers necessary;

(f) subject to section 52, to sell the immovable and movable property and actionable claims of the corporate debtor in liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in parcels in such manner as may be specified;

(g) to draw, accept, make and endorse any negotiable instruments including bill of exchange, hundi or promissory note in the name and on behalf of the corporate debtor, with the same effect with respect to the liability as if such instruments were drawn, accepted, made or endorsed by or on behalf of the corporate debtor in the ordinary course of its business;

(h) to take out, in his official name, letter of administration to any deceased contributory and to do in his official name any other act necessary for obtaining payment of any money due and payable from a contributory or his estate which cannot be ordinarily done in the name of the corporate debtor, and in all such cases, the money due and payable shall, for the purpose of enabling the liquidator to take out the letter of administration or recover the money, be deemed to be due to the liquidator himself;

(i) to obtain any professional assistance from any person or appoint any professional, in discharge of his duties, obligations and responsibilities;

(j) to settle claims of creditors and claimants and distribute proceeds in accordance with the provisions of this Code;

(k) to institute or defend any suit, prosecution or other legal proceedings, civil or criminal, in the name of or on behalf of the corporate debtor;

(l) continue or institute proceedings in respect of an avoidance transaction or fraudulent or wrongful trading;

(m) to take all such actions, steps, or to sign, execute and verify any paper, deed, receipt, document, application, petition, affidavit, bond or instrument and for such purpose to use the common seal, if any, as may be necessary for liquidation, distribution of assets and in discharge of his duties and obligations and functions as liquidator;

(n) to apply to the Adjudicating Authority for such orders or directions as may be necessary for the liquidation of the corporate debtor and to report the progress of the liquidation process in a manner as may be specified by the Board; and

(o) to perform such other functions as may be specified by the Board.

Explanation. For the purposes of this Chapter, it is hereby declared that the provisions of clauses (a) and (j) of this sub-section and sections 38 to 42 as amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2026, shall not apply to the liquidation process and voluntary liquidation process initiated on and before the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2026.

(2) The committee of creditors shall supervise the conduct of the liquidation process by the liquidator under Chapter III in such manner as may be specified.

What changed in Section 35 in 2026?

Practical effect of the liquidator's powers

Section 35 enables the liquidator to secure the corporate debtor's estate, preserve value and convert assets into distributable proceeds. Asset sales under clause (f) remain subject to Section 52 where a secured creditor chooses the statutory route available in liquidation. Distribution of realised proceeds must comply with the Code, including the priority waterfall under Section 53.

The power to carry on the corporate debtor's business under clause (e) is directed to beneficial liquidation rather than indefinite continuation of business. Similarly, the power to engage professionals under clause (i), commence or defend proceedings under clause (k), and seek directions under clause (n) must be exercised for proper administration and completion of the liquidation process.

Applicable IBBI Liquidation Process Regulations

The statutory duties in Section 35 are supplemented by the IBBI (Liquidation Process) Regulations, 2016. The Regulations prescribe detailed requirements for the liquidation process, including claims administration, stakeholder consultation or creditor oversight as applicable, asset sale procedures, reporting, distributions and completion of liquidation. The official IBBI legal framework should be checked for the latest amended regulations and prescribed forms.

Important: Because the 2026 amendment contains transitional provisions, the date on which a liquidation or voluntary liquidation process was initiated can determine whether the amended claims provisions apply. For an ongoing matter, the statutory commencement provisions, Tribunal orders and current IBBI Regulations should be checked together.

Official legal resources

For authoritative updates, refer to the IBBI Acts page for the Insolvency and Bankruptcy Code (Amendment) Act, 2026 and the IBBI updated Liquidation Process Regulations.

Updated: 30 September 2026. This page is a general legal information resource. Statutory text and subordinate legislation should be verified from official sources for a specific proceeding.