Section 77 IBC 2016: Punishment for False Information in Application by Corporate Debtor

Section 77 of the Insolvency and Bankruptcy Code, 2016 provides punishment where a corporate debtor knowingly gives materially false information or knowingly omits a material fact in an application under Section 10, and also covers a person who knowingly and wilfully authorises or permits such conduct.

Text of Section 77

77. Punishment for providing false information in application made by corporate debtor.

Where -

(a) a corporate debtor provides information in the application under section 10 which is false in material particulars, knowing it to be false and omits any material fact, knowing it to be material; or

(b) any person who knowingly and wilfully authorised or permitted the furnishing of such information under sub-clause (a),

such corporate debtor or person, as the case may be, shall be punishable with imprisonment for a term which shall not be less than three years, but which may extend to five years or with fine which shall not be less than one lakh rupees, but which may extend to one crore rupees, or with both.

Explanation. For the purposes of this section and sections 75 and 76, an application shall be deemed to be false in material particulars in case the facts mentioned or omitted in the application, if true, or not omitted from the application as the case may be, would have been sufficient to determine the existence of a default under this Code.

Meaning and Scope of Section 77

Section 77 is linked to an application under Section 10 of the Code. Section 10 deals with initiation of the corporate insolvency resolution process by a corporate applicant. Section 77 addresses deliberate falsehood or material omission in such an application and extends liability to a person who knowingly and wilfully authorises or permits the furnishing of the information described in the provision.

Essential Ingredients

There must be an application under Section 10 of the Insolvency and Bankruptcy Code, 2016.
The corporate debtor must provide information that is false in material particulars while knowing it to be false and omit a material fact while knowing it to be material; or
A person must knowingly and wilfully authorise or permit the furnishing of such information.
The Explanation to Section 77 also applies for the purposes of Sections 75 and 76 and defines when an application is deemed false in material particulars by reference to facts sufficient to determine the existence of a default.

Punishment Under Section 77

The provision prescribes imprisonment for not less than three years and up to five years, or a fine of not less than Rs. 1 lakh and up to Rs. 1 crore, or both.

Section 10 and Corporate Applicant

Section 10 provides the statutory route through which a corporate applicant may seek initiation of the corporate insolvency resolution process, subject to the conditions and restrictions contained in the Code. Section 77 therefore places penal consequences on the deliberate furnishing of materially false information or deliberate material omission in that application.

Explanation: False in Material Particulars

The Explanation is important because it applies not only to Section 77 but also to Sections 75 and 76. It links material falsity to whether the facts stated or omitted, if correctly stated or not omitted, would have been sufficient to determine the existence of a default under the Code.

Practical point: Section 77 is a penal provision. Whether liability arises depends on proof of the statutory elements, including the required knowledge or wilfulness and the materiality described in the provision and its Explanation.

Official Legal Resources

For the current statutory text and amendments, refer to India Code and the Insolvency and Bankruptcy Board of India legal framework. Rules, regulations, circulars and other official materials are available through the IBBI legal framework.

Last reviewed: 30 September 2026.