Insolvency and Bankruptcy Code, 2016 | Section 143

Section 143: Standard of Conduct of Bankruptcy Trustee

Section 143 of the Insolvency and Bankruptcy Code, 2016 (IBC) requires a bankruptcy trustee to observe the professional code of conduct applicable under Section 208. This obligation promotes integrity, independence, care and accountability in bankruptcy administration.

Text of Section 143 - Standard of conduct

143. The bankruptcy trustee shall perform his functions and duties in compliance with the code of conduct provided under section 208.

Section 143 is a concise mandatory rule. It does not create a separate code of conduct; instead, it applies the standards referred to in Section 208 to the trustee while carrying out bankruptcy functions.

Meaning and scope of Section 143

A bankruptcy trustee is an insolvency professional appointed to administer the bankruptcy process under the relevant provisions of Part III of the IBC. The trustee must discharge statutory functions consistently with the Code and applicable regulations, not merely follow instructions from individual creditors or the bankrupt.

Section 208 - Functions and obligations of insolvency professionals imposes professional obligations, including reasonable care and diligence, compliance with applicable professional bye-laws, permitting inspection of records, and performing functions in the manner and subject to conditions specified by regulations.

Key professional standards for a bankruptcy trustee

Integrity and objectivity: act honestly, avoid misrepresentation and disclose relevant conflicts of interest.
Independence and impartiality: make decisions without improper influence and comply with restrictions concerning acquisition of debtor assets.
Competence and diligence: maintain professional skills, exercise reasonable care and avoid negligence.
Transparency and records: maintain appropriate records and provide information or reports required under the Code and regulations.
Confidentiality: protect confidential information, subject to lawful disclosure obligations.
Fair treatment: act professionally in dealings with the bankrupt, creditors and other stakeholders.

These principles are further detailed in the First Schedule to the IBBI (Insolvency Professionals) Regulations, 2016, read with Regulation 7(2)(h), as amended from time to time.

Section 208 - Obligations of insolvency professionals

This is the express statutory cross-reference in Section 143 and establishes the broader framework of professional responsibilities.

Section 144 - Fees of bankruptcy trustee

Deals with the trustee's fees and their payment from the bankruptcy estate, subject to applicable statutory and regulatory requirements.

Section 145 - Replacement of bankruptcy trustee

Provides a statutory mechanism for replacing a bankruptcy trustee. Replacement and disciplinary consequences are distinct processes and depend on their respective legal requirements.

Compliance and practical importance

In practice, a bankruptcy trustee should document material decisions, identify and manage conflicts, safeguard estate information, exercise care when handling assets and claims, and follow applicable directions of the Adjudicating Authority. Breaches of the professional code may attract regulatory scrutiny or disciplinary action under the relevant provisions, depending on the facts.

Official legislation and regulatory references

Legal information updated for October 2026. The application and commencement of individual provisions and regulations should be checked for the relevant class of debtor and proceeding. This article provides general legal information, not case-specific advice.