Section 107 - Summoning of Meeting of Creditors under the Insolvency and Bankruptcy Code, 2016

Section 107: Summoning of meeting of creditors

The following reproduces the substantive requirements of Section 107 of the Insolvency and Bankruptcy Code, 2016, with formatting for readability.

Explanation of Section 107

Section 107(1): At least 14 days' advance notice

The resolution professional (RP) is responsible for issuing the meeting notice. The statutory minimum is 14 days before the meeting date. This is a notice requirement; it is distinct from the period for scheduling the meeting addressed in Section 106.

Section 107(2): Notice to the Section 104 list

The notice must be sent to the creditors appearing on the list prepared under Section 104. That list is compiled using debtor disclosures and creditor claims. Maintaining an accurate list helps ensure eligible creditors receive notice and can participate.

Section 107(3): Mandatory disclosures and enclosures

Creditors must be told where the repayment plan and the RP's report have been filed. The four accompanying documents enable creditors to understand the debtor's financial position, evaluate the proposed restructuring and arrange proxy voting where permitted.

Section 107(4): Proxy and electronic proxy voting

The Code recognises proxy voting, including electronic proxy voting, but the applicable manner and form must follow the relevant regulations. The provision does not, by itself, prescribe a universal online voting platform or make electronic proxy voting compulsory in every case.

Creditors' meeting notice: practical checklist

• Identify the meeting date, time and venue or authorised participation arrangements, as applicable.
• Send notice at least 14 days in advance to the creditors included in the Section 104 list.
• Specify the address of the Adjudicating Authority where the plan and RP report were submitted.
• Enclose the repayment plan (Section 105).
• Enclose the debtor's statement of affairs.
• Enclose the RP's report (Section 106).
• Provide proxy-voting forms and follow the applicable voting procedure.
• Retain evidence of dispatch and related communications as a matter of prudent recordkeeping.

The final checklist items concerning meeting logistics and recordkeeping are practical measures; the statutory requirements are those stated in Section 107 and applicable regulations.

How Section 107 fits into the repayment plan process

Important: The 14-day advance notice under Section 107 and the 14-to-28-day meeting scheduling window under Section 106 are separate legal requirements.

Key definitions and applicability

Resolution professional

An insolvency professional appointed under the applicable provisions to perform statutory functions in the insolvency resolution process, including reporting on the repayment plan and convening a creditors' meeting where required.

Repayment plan

Under Section 105, the debtor prepares a proposal in consultation with the RP for restructuring debts or affairs, for consideration under the Code.

Adjudicating Authority

The forum empowered under the Code to decide the relevant insolvency application and repayment plan. For personal guarantors to corporate debtors, Section 60 addresses the jurisdiction of the National Company Law Tribunal (NCLT).

Scope of commencement

Although Part III contains provisions referring to individuals and partnership firms, the relevant insolvency resolution provisions have been brought into force for personal guarantors to corporate debtors with effect from 1 December 2019. They should not be presented as generally operational for every individual debtor or partnership firm. Consult the latest commencement notifications, rules and case law before relying on a particular procedure.

Frequently asked questions

How much notice must creditors receive under Section 107?

The resolution professional must issue the meeting notice at least 14 days before the meeting date.

Who receives the notice?

The creditors on the list prepared under Section 104.

What must accompany the meeting notice?

The repayment plan, debtor's statement of affairs, RP's report on the plan and proxy-voting forms. The notice must also identify the address of the Adjudicating Authority where the plan and report were submitted.

Can creditors vote through a proxy?

Yes. Section 107 expressly recognises proxy voting, including electronic proxy voting, subject to the manner and form specified under the applicable framework.

Does every repayment plan require a creditors' meeting?

Not necessarily. Section 106 requires the RP's report to address whether a meeting is needed and to give reasons if one is not recommended. The Adjudicating Authority's subsequent directions and the applicable provisions determine the process.

Official legislation and regulatory references

• India Code - Insolvency and Bankruptcy Code, 2016
• Official text of the Insolvency and Bankruptcy Code, 2016 (PDF)
• Insolvency and Bankruptcy Board of India - Legal Framework
• IBBI - Rules

Read more: The Insolvency and Bankruptcy Code, 2016.