Section 38: Consolidation of Claims
Section 38 of the Insolvency and Bankruptcy Code, 2016 governs the receipt and submission of creditor claims after commencement of liquidation and distinguishes the manner in which financial, operational and mixed claims are submitted.
Section 38 - Statutory provision
(1) The liquidator shall receive or collect the claims of creditors within a period of thirty days from the date of the commencement of the liquidation process.
(2) A financial creditor may submit a claim to the liquidator by providing a record of such claim with an information utility.
Provided that where the information relating to the claim is not recorded in the information utility, the financial creditor may submit the claim in the same manner as provided for submission of claims for an operational creditor under sub-section (3).
(3) An operational creditor may submit a claim to the liquidator in such form and manner and along with such supporting documents required to prove the claim as may be specified by the Board.
(4) A creditor who is partly a financial creditor and partly an operational creditor shall submit claims to the liquidator to the extent of the financial debt in the manner provided in sub-section (2) and to the extent of the operational debt under sub-section (3).
(5) A creditor may withdraw or vary its claim under this section within fourteen days of its submission.
Purpose of consolidation of claims
Section 38 creates the statutory framework for gathering creditor claims during liquidation. The claims collected by the liquidator are subsequently dealt with through verification under Section 39 and admission or rejection under Section 40.
Thirty-day period for receiving claims
Under Section 38(1), the liquidator receives or collects creditor claims within thirty days from commencement of the liquidation process. The procedural manner of filing and proving claims is governed by the IBBI Liquidation Process Regulations, so the Code and current regulations should be read together.
Financial creditor claims
A financial creditor may establish its claim by providing the record maintained with an information utility. If the claim is not recorded with an information utility, the proviso to Section 38(2) permits submission in the manner applicable to an operational creditor under Section 38(3).
Operational creditor claims
Section 38(3) requires an operational creditor to submit its claim in the form and manner specified by the Insolvency and Bankruptcy Board of India and with the supporting documents required to prove the claim. The current forms and procedural requirements are contained in the applicable Liquidation Process Regulations.
Creditor with both financial and operational debt
Section 38(4) addresses a creditor whose claim has both financial and operational components. The financial debt component is submitted under the procedure in Section 38(2), while the operational debt component is submitted under Section 38(3).
Withdrawal or variation of a claim
Section 38(5) allows a creditor to withdraw or vary its claim within fourteen days of submission. This statutory period is distinct from the thirty-day period under Section 38(1) for receiving or collecting creditor claims following commencement of liquidation.
Related liquidation provisions
The claims process should also be read with Section 35 on the powers and duties of the liquidator, Section 37 on access to information, Section 39 on verification of claims and Section 40 on admission or rejection of claims.
Official legal resources
For current regulations and amendments, refer to the IBBI Liquidation Process Regulations, the IBBI Acts page and the IBBI Circulars page.