Indian insolvency law | Part III, Chapter III

Section 114 of the Insolvency and Bankruptcy Code, 2016: Order on Repayment Plan

Section 114 governs how the Adjudicating Authority decides whether to approve or reject a repayment plan in the insolvency resolution process for individuals and partnership firms, subject to the applicable commencement notifications.

Key point: The decision ordinarily rests on the resolution professional's report of the creditors' meeting under Section 112. Where no meeting is summoned, the Authority considers the report under Section 106.

Text of Section 114

114. Order of Adjudicating Authority on repayment plan

(1) The Adjudicating Authority shall by an order approve or reject the repayment plan on the basis of the report of the meeting of the creditors submitted by the resolution professional under section 112:

Provided that where a meeting of creditors is not summoned, the Adjudicating Authority shall pass an order on the basis of the report prepared by the resolution professional under section 106.

(2) The order of the Adjudicating Authority approving the repayment plan may also provide for directions for implementing the repayment plan.

(3) Where the Adjudicating Authority is of the opinion that the repayment plan requires modification, it may direct the resolution professional to re-convene a meeting of the creditors for reconsidering the repayment plan.

Meaning and scope of Section 114

A repayment plan is a proposal prepared by the debtor in consultation with the resolution professional for restructuring debts or financial affairs under Section 105. The resolution professional examines the proposal and reports on it, including through the creditors' meeting process where applicable. The Adjudicating Authority is the forum empowered under the Code to issue the relevant order; the NCLT deals with insolvency and bankruptcy matters of personal guarantors to corporate debtors under Section 60.

Section 114(1): Approval or rejection

The Authority must issue an order approving or rejecting the plan, based on the Section 112 report. If no creditors' meeting is summoned, the statutory proviso instead requires consideration of the Section 106 report. Section 111 sets the voting threshold for creditor approval at more than three-fourths in value of creditors present in person or by proxy and voting.

Section 114(2): Implementation directions

When approving a plan, the Authority may include directions for putting it into effect. These directions operate alongside the resolution professional's supervisory duties under Section 116.

Section 114(3): Modification and reconsideration

If the Authority considers modification necessary, it may direct the resolution professional to reconvene the creditors' meeting. The modified plan can then be reconsidered under the Code's approval procedure; this provision does not itself dispense with creditor consideration.

How the repayment plan reaches the Authority

Preparation: The debtor prepares the proposal in consultation with the resolution professional under Section 105.
Review: The resolution professional prepares a report under Section 106.
Creditors' consideration: Where a meeting is held, creditors consider and vote on the plan under Sections 108 to 111.
Reporting: The resolution professional submits the meeting report under Section 112.
Decision: The Authority approves, rejects or calls for reconsideration of a modified plan under Section 114.

Legal consequences of the order

If approved: Section 115(1) provides that the plan takes effect as if proposed by the debtor in the meeting and binds the debtor and creditors mentioned in it. The resolution professional supervises implementation under Section 116.

If rejected: Section 115(2) entitles the debtor and creditors to apply for bankruptcy under Chapter IV, subject to applicable provisions and commencement. Rejection is not itself a bankruptcy order.

After implementation: Sections 117 to 119 address completion reporting, premature termination and discharge orders respectively.

Applicability and important distinction

Part III provisions have been brought into force in stages. The notified framework concerning personal guarantors to corporate debtors has operated since 1 December 2019. The existence of a provision in the Code does not, by itself, mean that the entire Part III framework is operational for every individual or partnership firm. Check the relevant commencement notifications and current rules before applying this section to a particular debtor.

Official law and related provisions

Updated: 23 October 2026. This article provides general legal information, not advice for an individual proceeding.