Section 92: Discharge Order under the Insolvency and Bankruptcy Code, 2016

Section 92 is part of the fresh start process under Part III, Chapter II of the Insolvency and Bankruptcy Code, 2016. It provides for preparation of the final list of qualifying debts and the discharge order to be passed by the Adjudicating Authority at the end of the moratorium period.

Key rule: The resolution professional must submit the final list of qualifying debts to the Adjudicating Authority at least 7 days before the moratorium ends. At the end of the moratorium period, the Adjudicating Authority passes the discharge order for qualifying debts included in that list.

Section 92 - Statutory Provisions

(1) The resolution professional shall prepare a final list of qualifying debts and submit such list to the Adjudicating Authority at least seven days before the moratorium period comes to an end.

(2) The Adjudicating Authority shall pass a discharge order at the end of the moratorium period for discharge of the debtor from the qualifying debts mentioned in the list under sub-section (1).

(3) Without prejudice to the provisions of sub-section (2), the Adjudicating Authority shall discharge the debtor from the following liabilities, namely:-

(a) penalties in respect of the qualifying debts from the date of application till the date of the discharge order;

(b) interest including penal interest in respect of the qualifying debts from the date of application till the date of the discharge order; and

(c) any other sums owed under any contract in respect of the qualifying debts from the date of application till the date of the discharge order.

(4) The discharge order shall not discharge the debtor from any debt not included in sub-section (2) and from any liability not included under sub-section (3).

(5) The discharge order shall be forwarded to the Board for the purpose of recording an entry in the register referred to in Section 196.

(6) A discharge order under sub-section (2) shall not discharge any other person from any liability in respect of the qualifying debts.

Final List of Qualifying Debts

The resolution professional is responsible for preparing the final list of qualifying debts. The list must be submitted to the Adjudicating Authority at least seven days before the moratorium period expires. This list determines the qualifying debts from which the debtor is to be discharged under Section 92(2).

What the Discharge Order Covers

The discharge order releases the debtor from qualifying debts appearing in the final list. In addition, Section 92(3) expressly covers penalties, interest including penal interest, and other contractual sums relating to those qualifying debts for the period beginning on the date of the application and ending on the date of the discharge order.

What the Discharge Order Does Not Cover

Section 92(4) limits the effect of discharge. A debt outside the qualifying debts covered by Section 92(2), or a liability outside the categories stated in Section 92(3), is not discharged merely because a discharge order has been passed.

Liability of Other Persons

Section 92(6) makes clear that the debtor's discharge does not discharge another person from that person's liability in respect of the qualifying debts. The statutory relief is therefore personal to the debtor to the extent provided by Section 92.

Recording the Discharge Order

The discharge order must be forwarded to the Insolvency and Bankruptcy Board of India for recording an entry in the register referred to in Section 196 of the Code.

Meaning of Important Terms

Qualifying debt: Section 79 defines a qualifying debt for the purposes of Part III and the fresh start process, subject to the statutory exclusions contained in that definition.

Resolution professional: For Part III, Section 79 defines the resolution professional as an insolvency professional appointed under that Part for conducting the fresh start process or insolvency resolution process.

Moratorium: In the fresh start process, Section 85 provides for the moratorium following admission of the application and specifies its legal effects and duration.

Adjudicating Authority: The expression refers to the adjudicating forum designated under the applicable provisions of the Code for proceedings under Part III.

Board: The Board is the Insolvency and Bankruptcy Board of India established under Section 188 of the Code.

Related Provisions

This page is a statutory information resource. The official text, amendments, commencement notifications and applicable rules should be checked for the relevant date and proceeding.