Section 129 IBC: Statement of Financial Position After a Bankruptcy Order
Section 129 of the Insolvency and Bankruptcy Code, 2016 requires a bankrupt person to disclose their financial position to the bankruptcy trustee when a bankruptcy order is made on a creditor's application. It also addresses the prescribed form, partnership firms and requests for further information.
What does Section 129 provide?
Section 129(1). Where a bankruptcy order is passed on a creditor's bankruptcy application under Section 123, the bankrupt must submit a statement of financial position to the bankruptcy trustee within seven days from the bankruptcy commencement date.
Section 129(2). The statement must be submitted in the prescribed form and manner.
Section 129(3). Where the bankrupt is a firm, the partners on the date of the order must submit a joint statement of the firm's financial position, and each partner must also submit a statement of their own financial position.
Section 129(4). The bankruptcy trustee may require the bankrupt or another person to provide further written information explaining or modifying any matter in the statement.
These four subsections are summarised for readability. For the authoritative wording, consult the India Code text of the Insolvency and Bankruptcy Code, 2016 and the applicable rules published through the IBBI legal framework.
Section 129(1): Seven days to submit the statement
The duty arises specifically when the bankruptcy order follows a creditor's application under Section 123. The bankrupt must give the statement to the appointed bankruptcy trustee within seven days from the bankruptcy commencement date, not seven days from the date on which the trustee asks for it.
The bankruptcy commencement date is tied to the making of the bankruptcy order under the Code. A debtor should identify that date from the order and arrange the required financial records promptly. Section 129 does not itself provide a general extension of this statutory period.
| Provision | Requirement | When or by whom |
|---|---|---|
| Section 129(1) | Statement of financial position | Within seven days from bankruptcy commencement date, where creditor applied |
| Section 129(2) | Prescribed form and manner | As required by applicable rules |
| Section 129(3) | Joint firm statement plus individual partner statements | Partners of a firm, where the provision applies |
| Section 129(4) | Further written explanation or modification | When required by bankruptcy trustee |
Section 129(2): Form and contents of financial disclosure
The statute leaves the detailed form and manner to prescribed rules. A statement of financial position is intended to help the trustee understand the bankrupt's assets, liabilities and financial affairs. Depending on the applicable prescribed form, supporting information may include:
- Immovable and movable assets, bank balances, investments and other property interests;
- Creditors, outstanding debts, secured liabilities and details of security interests;
- Income, financial commitments, transactions and relevant supporting records; and
- Other particulars specifically required by the applicable rules or requested lawfully by the trustee.
This is an illustrative preparation checklist, not a substitute for the prescribed form. Use the current rules and forms relevant to the debtor category and proceeding, including the applicable personal guarantor bankruptcy rules where relevant.
Section 129(3): Additional disclosures for firms
If the bankruptcy order concerns a firm within an operative statutory framework, two levels of disclosure are required: one joint financial statement for the firm and separate personal financial statements for each partner who was a partner on the date of the bankruptcy order.
The provision recognises that the firm's finances and individual partners' finances are distinct subjects of disclosure. Its presence in the Code should not be read as confirmation that every partnership firm can currently be placed into bankruptcy under this Chapter.
Section 129(4): Power to seek further information
The bankruptcy trustee may seek additional information in writing from the bankrupt or any other person to clarify, explain or modify matters stated in the financial disclosure. This power enables the trustee to examine inconsistencies, incomplete descriptions and changes needed to make the statement accurate.
Persons receiving a lawful request should respond with accurate, relevant information and retain records of the documents supplied. The trustee's functions and powers must be read together with the wider bankruptcy provisions and applicable regulations.
Practical illustration
Suppose a bankruptcy order is passed following a creditor's application under Section 123. The bankrupt is required to submit the prescribed statement to the trustee within seven days from the bankruptcy commencement date. If the statement omits an investment or contains an unclear debt figure, the trustee may request a further written explanation under Section 129(4).
This example illustrates the statutory mechanism; it does not determine whether a particular applicant or debtor is eligible under the currently commenced provisions.
Frequently asked questions
When must the statement of financial position be submitted?
Under Section 129(1), within seven days from the bankruptcy commencement date, where the bankruptcy order follows a creditor's application under Section 123.
Does Section 129 apply to bankruptcy applications filed by the debtor?
The express trigger in Section 129(1) is a bankruptcy order passed on a creditor's application under Section 123. Other disclosure obligations may apply under the Code, rules or directions in a debtor-initiated proceeding.
Can the trustee ask someone other than the bankrupt for information?
Yes. Section 129(4) expressly permits the trustee to require further written information from the bankrupt or any other person concerning the statement.
Must each partner of a bankrupt firm provide a personal statement?
Section 129(3) provides for a joint firm statement and an individual statement from each partner as of the order date, subject to the relevant provisions being in force for that debtor category.
This page provides general legal information, not advice on any particular bankruptcy proceeding. Verify current statutory text, commencement notifications and procedural rules before acting.