Section 84 IBC 2016: Admission or Rejection of Application by Adjudicating Authority

Section 84 of the Insolvency and Bankruptcy Code, 2016 governs the stage at which the Adjudicating Authority considers the resolution professional's report on a debtor's fresh start application and passes an order admitting or rejecting that application.

Key timeline: The Adjudicating Authority may pass its order within fourteen days from submission of the resolution professional's report. If an order is passed, a copy of the order and application must be provided to the creditors mentioned in the application within seven days of the order.

Text of Section 84 - Admission or rejection of application by Adjudicating Authority

(1) The Adjudicating Authority may within fourteen days from the date of submission of the report by the resolution professional, pass an order either admitting or rejecting the application made under sub-section (1) of section 81.

(2) The order passed under sub-section (1) accepting the application shall state the amount which has been accepted as qualifying debts by the resolution professional and other amounts eligible for discharge under section 92 for the purposes of the fresh start order.

(3) A copy of the order passed by the Adjudicating Authority under sub-section (1) along with a copy of the application shall be provided to the creditors mentioned in the application within seven days of the passing of the order.

Meaning and operation of Section 84

Section 84 forms part of Chapter II of Part III of the Code dealing with the fresh start process for individuals and partnership firms. It follows the examination of the application by the resolution professional under Section 83.

Under sub-section (1), the Adjudicating Authority considers the report submitted by the resolution professional and may admit or reject the application made under Section 81(1). The statutory period stated for this step is fourteen days from submission of the report.

If the application is accepted, sub-section (2) requires the order to identify the amount accepted as qualifying debts and the other amounts eligible for discharge under Section 92 for purposes of the fresh start order.

Sub-section (3) ensures notice to affected creditors by requiring the order, together with a copy of the application, to be provided to creditors mentioned in the application within seven days after the order is passed.

Important connected provisions

Section 80 sets out eligibility for making a fresh start application.
Section 81 deals with the application for a fresh start order.
Section 83 requires examination and a report by the resolution professional.
Section 85 specifies the effect of admission, including commencement of the moratorium period.
Section 86 provides for creditor objections and their examination.

Practical sequence under Section 84

The resolution professional first submits the report contemplated by Section 83. The Adjudicating Authority then considers whether the fresh start application should be admitted or rejected. An accepting order records qualifying debts and other discharge-eligible amounts. Creditors named in the application are then supplied the order and application, after which the process proceeds under the succeeding provisions of Chapter II.