Insolvency and Bankruptcy Code, 2016 | Part III

Section 135 of IBC 2016: Voting Rights of Creditors in Bankruptcy

Legal guide | Reviewed 23 October 2026

Section 135 governs which creditors may vote at a meeting during an individual bankruptcy process, how their voting share is determined, and when voting is excluded. The provision must be read with the list of creditors prepared under Section 132 and the applicable Insolvency and Bankruptcy Board of India (IBBI) regulations.

Key point: A creditor named in the Section 132 list, or that creditor's proxy, can vote according to the assigned voting share, subject to the statutory exclusions for unliquidated debts and certain creditors.

What Section 135 provides

Section 135(1) - Entitlement to vote: Every creditor included in the list under Section 132, or the creditor's proxy, is entitled to vote on resolutions at the meeting of creditors in accordance with the voting share assigned.

Section 135(2) - Determination of voting share: The statutory text assigns determination of each creditor's voting share to the resolution professional, in the manner specified by the Board.

Section 135(3) - Unliquidated debt: A creditor is not entitled to vote in respect of a debt for an unliquidated amount.

Section 135(4)(a) - List and notice: Creditors not mentioned in the Section 132 list and not given notice by the bankruptcy trustee are excluded from voting.

Section 135(4)(b) - Associates: Creditors who are associates of the bankrupt are excluded from voting under this section.

The paragraphs above explain the statutory clauses rather than reproduce the Act verbatim. See the official IBC text hosted by IBBI.

Who can vote at a creditors' meeting?

The starting point is the creditor list prepared under Section 132. Inclusion in that list is necessary for the entitlement described in Section 135(1), but it does not override the restrictions in subsections (3) and (4). A qualifying creditor may participate personally or through a duly appointed proxy, subject to applicable procedural requirements.

Section 135(2) refers the method of determining voting shares to rules specified by IBBI. For bankruptcy processes involving personal guarantors to corporate debtors, Regulation 24 of the IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 provides that voting share is generally proportionate to the debt owed, subject to Section 135. It also addresses the voting share of secured creditors depending on whether they enforce or relinquish security interests.

For example, if three eligible creditors hold voting debts of Rs. 50 lakh, Rs. 30 lakh and Rs. 20 lakh respectively, their illustrative voting shares would be 50%, 30% and 20%, assuming the full amounts qualify for voting and no special adjustment applies.

Which creditors cannot vote?

Unliquidated claims: A creditor cannot vote in respect of a debt whose amount remains unliquidated under Section 135(3).
Creditors outside the statutory list and notice process: Section 135(4)(a) excludes creditors who are not on the Section 132 list and have not been notified by the bankruptcy trustee.
Associates of the bankrupt: Section 135(4)(b) expressly excludes these creditors. The meaning of an associate must be assessed using the definitions and applicable provisions of the Code.

Proxy and electronic voting

Section 135(1) expressly recognises voting through a proxy. Section 133 also addresses proxy-voting arrangements in notices of creditors' meetings. In the personal guarantor bankruptcy regulations, Regulation 26 deals with appointment of proxies, including Form B and the applicable advance submission requirement. Regulations 21 to 25 cover meeting notices, conduct, voting shares and voting procedures. Check the latest consolidated regulations for the process concerned before using a form or calculating a deadline.

Section 130: Public notice inviting claims from creditors.
Section 131: Registration of creditors' claims.
Section 132: Preparation of the list of creditors.
Section 133: Summoning of a meeting of creditors.
Section 134: Conduct of the meeting of creditors.
Section 136: Administration and distribution of the bankrupt's estate.

Official legislation and regulatory references

Scope and commencement: Part III provisions have been brought into force in stages. The bankruptcy framework and IBBI regulations referenced here are particularly relevant to personal guarantors to corporate debtors. Their application to other individuals or partnership firms must be checked against the applicable commencement notifications and current law. This article is general legal information, not advice for a specific proceeding.