Insolvency and Bankruptcy Code, 2016 | Part III

Section 137 - Completion of Administration of a Bankrupt Estate

Section 137 governs the final review of the bankruptcy trustee's administration and distribution of a bankrupt's estate. It requires a meeting of the committee of creditors, a report, a decision within seven days and provision for meeting expenses.

Key requirement: The committee of creditors must approve the trustee's administration report within seven days of receiving it and decide whether the trustee should be released under Section 148.

Text of Section 137 - Completion of administration

137. (1) The bankruptcy trustee shall convene a meeting of the committee of creditors on completion of the administration and distribution of the estate of the bankrupt in accordance with the provisions of Chapter V.

(2) The bankruptcy trustee shall provide the committee of creditors with a report of the administration of the estate of the bankrupt in the meeting of the said committee.

(3) The committee of creditors shall approve the report submitted by the bankruptcy trustee under sub-section (2) within seven days of the receipt of the report and determine whether the bankruptcy trustee should be released under section 148.

(4) The bankruptcy trustee shall retain sufficient sums from the estate of the bankrupt to meet the expenses of convening and conducting the meeting required under this section during the administration of the estate.

Meaning and explanation of Section 137

Sub-section (1): Convening the completion meeting

After the trustee completes the administration and distribution of the estate in accordance with Chapter V of Part III, the trustee must convene a meeting of the committee of creditors. This meeting provides a formal review of the completed administration.

Sub-section (2): Report to the committee

The trustee must present a report on the administration of the estate at the meeting. In practice, a well-supported report should explain the assets dealt with, realisations, distributions, expenses and outstanding matters, where relevant. These are practical reporting considerations, not a separately prescribed checklist in Section 137 itself.

Sub-section (3): Seven-day approval and release decision

The committee must approve the report within seven days after receiving it and determine whether the trustee should be released under Section 148. Approval of the report and release of the trustee are related but legally distinct steps; the applicable provisions governing release must also be followed.

Sub-section (4): Expenses of the meeting

The trustee must retain enough funds from the bankrupt's estate to cover the cost of convening and conducting this meeting. The reservation is made during estate administration so that the final meeting can be funded.

Practical completion checklist

Complete estate administration and distribution in accordance with Chapter V.
Prepare an accurate report supported by relevant records.
Convene the committee of creditors and present the report.
Record the committee's consideration, report approval and release decision.
Track the seven-day period from the committee's receipt of the report.
Retain sufficient estate funds for the meeting's expenses.
Consider the separate requirements for a discharge order under Section 138 and release under Section 148.

Section 136: Requires administration and distribution of the bankrupt's estate in accordance with Chapter V. Section 138: Addresses the trustee's application for a discharge order, including an early-approval route linked to Section 137. Section 148: Deals with release of the bankruptcy trustee. Chapter V (Sections 149 onwards): Sets out the substantive framework for administration and distribution of the estate.

The provisions of Part III concerning bankruptcy processes have been brought into force for personal guarantors to corporate debtors, subject to the applicable commencement notifications. The statutory text should not be assumed to apply identically to all individual debtors without checking commencement and jurisdiction.

Official legislation and regulatory sources

For a particular case, verify the latest notified amendments, applicable bankruptcy-process regulations and orders of the competent adjudicating authority.