Section 112 of IBC, 2016: Report of Meeting of Creditors on Repayment Plan
Section 112 of the Insolvency and Bankruptcy Code, 2016 requires the resolution professional to prepare a report recording the outcome of creditors' meetings on a debtor's repayment plan. The report documents the approval or rejection of the plan, any approved modifications, resolutions considered and each creditor's voting record.
What is Section 112 and when does it apply?
Section 112 is part of the insolvency resolution process for individuals and partnership firms under Part III of the IBC. The relevant provisions have been brought into operation for personal guarantors to corporate debtors from 1 December 2019. This should not be read as a statement that the same Part III process has been commenced generally for all individuals or partnership firms.
A repayment plan is the debtor's proposal prepared in consultation with a resolution professional under Section 105. The meeting of creditors is convened to consider the plan under Sections 107-111. The Adjudicating Authority is the tribunal empowered to act under the Code; for personal guarantors to corporate debtors, Section 60 generally places jurisdiction with the NCLT.
Section 112: Statutory provisions explained
Section 112(1): Resolution professional must prepare a report
The resolution professional shall prepare a report of the meeting of the creditors on the repayment plan. This is a statutory reporting duty, separate from the earlier assessment of the proposed repayment plan under Section 106. It is not merely an optional meeting summary.
Section 112(2)(a): Approval, rejection and modifications
The report must state whether the repayment plan was approved or rejected. If approved, it must list any modifications made to the plan. Section 108(3) requires the resolution professional to obtain the debtor's consent for each modification suggested by creditors. The report should accurately identify the version of the plan that was voted upon.
Section 112(2)(b): Proposed resolutions and their decisions
The report must identify the resolutions proposed at the meeting and the decision on each resolution. This creates a clear record of the questions put before creditors and their outcomes, including decisions on proposed amendments to the repayment plan.
Section 112(2)(c): Attendance and voting records
The report must contain a list of creditors present or represented at the meeting and the voting records of each creditor for all meetings of creditors. Where meetings have been adjourned or held on multiple occasions, the reporting requirement extends to the voting records for all such meetings.
Voting entitlement and share are governed by Section 109. Voting restrictions, including those concerning unliquidated debts and associates of the debtor, must be taken into account. The treatment of secured creditors is further addressed by Section 110.
Section 112(2)(d): Other relevant information
The resolution professional must include such other information as the professional considers appropriate to bring to the Adjudicating Authority's attention. Depending on the circumstances, this may include material procedural issues, the basis for recording voting outcomes, debtor consent to modifications and matters affecting implementation. These examples are practical illustrations, not an exhaustive statutory list.
How is approval determined?
Under Section 111, the repayment plan or any modification requires approval by a majority of more than three-fourths in value of creditors present in person or by proxy and voting on the resolution. This is a value-based voting threshold, not simply a count of creditors or 75% of all listed debt.
| Illustration | Outcome |
|---|---|
| Eligible voting value represented and voting: 100 units; votes in favour: 76 units | Threshold of more than 75% is met, subject to other statutory requirements. |
| Eligible voting value represented and voting: 100 units; votes in favour: 75 units | Threshold is not met because the law requires more than three-fourths. |
Illustrations assume that voting entitlements and voting values have been correctly determined under the applicable provisions and regulations.
How Section 112 fits into the repayment-plan process
| Provision | Role in the process |
|---|---|
| Section 104 | Preparation of the list of creditors. |
| Section 105 | Preparation of the repayment plan. |
| Section 106 | Resolution professional's report assessing the proposed plan before the creditors' meeting. |
| Section 107 | Summoning creditors and providing prescribed meeting documents. |
| Section 108 | Conduct of meeting, proposed changes and adjournment. |
| Sections 109-111 | Voting rights, secured creditors' rights and approval threshold. |
| Section 112 | Report of creditors' meeting, decisions and voting records. |
| Sections 113-114 | Subsequent steps and Adjudicating Authority's order on the repayment plan. |
Important distinction: A report recording creditor approval under Section 112 is not itself an order of the Adjudicating Authority. The plan's further legal treatment is governed by the subsequent provisions, including Section 114.
Practical checklist for a Section 112 report
- Identify the debtor, case reference, meeting date, venue and resolution professional.
- Record all creditors present or represented, including proxy representation where applicable.
- Verify the list of eligible voters and their voting shares against Section 104, Section 109 and applicable rules.
- Record every resolution proposed and the decision reached on it.
- State whether the repayment plan was approved or rejected, with the voting results supporting that conclusion.
- List each approved modification and record the debtor's consent where required under Section 108(3).
- Include creditor-by-creditor voting records for every meeting held.
- Identify additional material matters that should be disclosed to the Adjudicating Authority.
- Complete the subsequent filings and procedural steps required by the Code and applicable regulations.
Frequently asked questions
Who prepares the report under Section 112?
The resolution professional prepares the report of the creditors' meeting on the repayment plan.
Must the report mention modifications to the plan?
Yes. Where the plan is approved, Section 112(2)(a) requires the report to list any modifications.
Are individual voting records required?
Yes. Section 112(2)(c) expressly requires voting records of each creditor for all meetings of creditors, along with the list of creditors present or represented.
Does 75% support approve a repayment plan?
Not by itself. Section 111 requires more than three-fourths in value of creditors present in person or by proxy and voting.
Does the Section 112 report itself approve the plan?
No. It records the outcome of creditors' consideration. The Adjudicating Authority's decision is governed separately, including by Section 114.
Official legislation and regulatory resources
- India Code - Insolvency and Bankruptcy Code, 2016 (consult Section 112 and related provisions).
- IBBI - Legal framework and statutory materials.
- IBBI - Applicable rules.
- IBBI - Applicable regulations.
Explore the Insolvency and Bankruptcy Code, 2016 overview for the wider legal framework.
Legal information note: The operation of Part III provisions depends on commencement notifications and the relevant category of debtor. Verify current legislation, rules, regulations and tribunal orders for a particular case.