Section 145: Replacement of Bankruptcy Trustee
Section 145 of the Insolvency and Bankruptcy Code, 2016 (IBC) prescribes how the committee of creditors can seek replacement of a bankruptcy trustee during a bankruptcy process, including the voting threshold, appointment procedure, statutory time limits and transfer of responsibility.
What is a bankruptcy trustee?
A bankruptcy trustee is the insolvency professional appointed to administer a bankrupt person's estate and perform duties under the IBC. Section 125 concerns appointment of the bankruptcy trustee; Section 145 governs replacement initiated by the committee of creditors. The Adjudicating Authority is the forum competent under the applicable provisions of the IBC to make the relevant bankruptcy order and appoint a replacement.
Section 145 explained: Subsections (1) to (10)
The following table explains every subsection of Section 145 without omitting the statutory steps.
| Section 145(1) | The committee of creditors may initiate replacement of a trustee appointed under Section 125 during the bankruptcy process. |
|---|---|
| Section 145(2) | At a meeting, the committee may propose replacement by a vote representing at least 75 percent of voting share. |
| Section 145(3) | The committee may apply to the Adjudicating Authority for replacement. |
| Section 145(4) | Within seven days of receiving the application, the Adjudicating Authority must direct the Board to recommend a replacement. |
| Section 145(5) | Within ten days of the direction, the Board must recommend a bankruptcy trustee against whom no disciplinary proceedings are pending. |
| Section 145(6) | The Adjudicating Authority must appoint the recommended trustee by order within fourteen days of receiving the recommendation. |
| Section 145(7) | The outgoing trustee must deliver possession of the bankruptcy estate to the newly appointed trustee on the appointment date. |
| Section 145(8) | The Adjudicating Authority may direct the outgoing trustee to share all bankruptcy-process information and cooperate with the new trustee. |
| Section 145(9) | The outgoing trustee is released in accordance with Section 148. |
| Section 145(10) | The newly appointed trustee must notify the bankrupt within seven days of appointment. |
Step-by-step replacement process
1. Committee decision and application
Where the committee of creditors considers a replacement necessary, it may pass a proposal at a meeting with at least 75% of voting share under Section 145(2), then apply to the Adjudicating Authority under Section 145(3). The vote alone does not appoint the replacement trustee.
2. Referral to IBBI and recommendation
Under Section 145(4), the Adjudicating Authority has seven days after receiving the application to direct IBBI to recommend a replacement. Under Section 145(5), IBBI has ten days from the direction to recommend a trustee against whom no disciplinary proceedings are pending.
3. Appointment and transfer of the estate
Under Section 145(6), the Adjudicating Authority appoints the recommended trustee within fourteen days of receiving IBBI's recommendation. Under Section 145(7), the earlier trustee must deliver possession of the bankrupt's estate to the new trustee on the date of appointment. The Adjudicating Authority may require information-sharing and cooperation under Section 145(8).
4. Release and notice
Section 145(9) links release of the outgoing trustee to Section 148. Section 145(10) requires the incoming trustee to notify the bankrupt within seven days of appointment.
Statutory timeline at a glance
| 7 days | Adjudicating Authority directs IBBI after receiving the replacement application. |
|---|---|
| 10 days | IBBI recommends a replacement after receiving the direction. |
| 14 days | Adjudicating Authority appoints the recommended trustee after receiving the recommendation. |
| On appointment | Outgoing trustee delivers possession of the bankruptcy estate. |
| 7 days | Incoming trustee gives notice of appointment to the bankrupt. |
These are separate statutory periods triggered by the events stated in Section 145; they should not be treated as one unconditional overall deadline.
Related provisions and applicable regulations
- Section 125: Appointment of the bankruptcy trustee.
- Section 143: Requires the trustee to follow the code of conduct under Section 208.
- Section 146: Resignation by the bankruptcy trustee; a separate process from creditor-initiated replacement.
- Section 147: Vacancy in the office of bankruptcy trustee.
- Section 148: Release of the bankruptcy trustee.
- IBBI bankruptcy regulations: The Bankruptcy Process for Personal Guarantors to Corporate Debtors Regulations, 2019, as amended, govern relevant operational requirements where applicable. The Second Amendment Regulations, 2026, address additional matters including asset-transfer coordination and prescribed forms; they do not replace Section 145's voting and appointment steps.
Official legal sources
- Insolvency and Bankruptcy Code, 2016 - IBBI official text (PDF)
- IBBI Bankruptcy Process for Personal Guarantors (Second Amendment) Regulations, 2026 (PDF)
- IBBI legal framework - amendments, regulations and notifications
- The Insolvency and Bankruptcy Code, 2016 - LawDadi index
Legal information updated: 23 October 2026. Statutory provisions and regulations should be read with any applicable commencement notifications and subsequent amendments. This article is general legal information, not advice for a particular proceeding.