Section 150: Duties of Bankrupt Towards Bankruptcy Trustee
Section 150 of the Insolvency and Bankruptcy Code, 2016 (IBC) requires a bankrupt individual to assist the bankruptcy trustee, disclose relevant information, attend when required and promptly report certain changes in property or income. Some cooperation duties continue even after discharge.
Under Section 150(2), the bankrupt must notify the bankruptcy trustee of an increase in income or the acquisition or devolution of property within seven days of the relevant event. Section 150(3) preserves specified cooperation duties even after discharge under Section 138.
Text of Section 150 of the IBC
150. Duties of bankrupt towards bankruptcy trustee.
(1) The bankrupt shall assist the bankruptcy trustee in carrying out his functions under this Chapter by-
(a) giving to the bankruptcy trustee the information of his affairs;
(b) attending on the bankruptcy trustee at such times as may be required;
(c) giving notice to the bankruptcy trustee of any of the following events which have occurred after the bankruptcy commencement date,-
(i) acquisition of any property by the bankrupt;
(ii) devolution of any property upon the bankrupt;
(iii) increase in the income of the bankrupt;
(d) doing all other things as may be prescribed.
(2) The bankrupt shall give notice of the increase in income or acquisition or devolution of property under clause (c) of sub-section (1) within seven days of such increase, acquisition or devolution.
(3) The bankrupt shall continue to discharge the duties under sub-section (1) other than the duties under clause (c) even after the discharge under section 138.
Meaning and scope of Section 150
Section 150(1)(a): Provide information about financial affairs
The bankrupt must supply information needed by the trustee to understand the bankrupt's financial position and administer the estate. Depending on the facts, this can involve information about assets, liabilities, transactions, accounts, claims and supporting records. The precise documents required depend on lawful requests and the applicable rules.
Section 150(1)(b): Attend when required
The bankrupt must attend on the bankruptcy trustee at times required for carrying out statutory functions. This facilitates inquiries, verification of records and clarification of financial matters.
Section 150(1)(c): Report changes after commencement
The duty to notify covers three distinct events after the bankruptcy commencement date: acquiring property, property devolving upon the bankrupt, and an increase in income. Devolution refers to property passing to a person by operation of law or another legally recognised mode, for example through succession where applicable. Whether a particular asset forms part of the bankruptcy estate must be determined under the Code and applicable law.
Section 150(1)(d): Other prescribed duties
The bankrupt must also comply with any additional duties prescribed under applicable legal provisions. The statutory wording should not be treated as permission to impose requirements outside the governing law.
Seven-day reporting requirement under Section 150(2)
The seven-day period is linked to the occurrence of the increase, acquisition or devolution, not merely to a later request by the trustee. A dated written notification identifying the event and supporting details can help demonstrate timely compliance.
| Event | Duty | Statutory timing |
|---|---|---|
| New property acquired | Notify the bankruptcy trustee | Within 7 days of acquisition |
| Property devolves upon the bankrupt | Notify the bankruptcy trustee | Within 7 days of devolution |
| Income increases | Notify the bankruptcy trustee | Within 7 days of increase |
Duties that continue after discharge: Section 150(3)
Section 138 concerns the discharge order. Section 150(3) expressly continues the duties under Section 150(1), except the event-notification duties in clause (c), even after discharge. Thus, the obligation to provide information, attend when required and comply with other prescribed duties may continue where applicable. Discharge does not automatically end every duty to cooperate with administration of the estate.
Related provisions of the Insolvency and Bankruptcy Code
- Section 125: Appointment of bankruptcy trustee.
- Section 138: Discharge order and its statutory effect.
- Section 149: Functions of the bankruptcy trustee: investigate affairs, realise the estate and distribute it.
- Section 151: Rights of bankruptcy trustee.
- Section 154: Vesting of estate of bankrupt in bankruptcy trustee.
The trustee's powers and the bankrupt's obligations must be read together with the provisions governing the bankruptcy estate, exempt property, the applicable rules and any binding directions of the Adjudicating Authority.
Practical compliance checklist
- Maintain an accurate list of assets, liabilities, financial accounts and material transactions.
- Respond to lawful information requests and retain copies of documents supplied.
- Attend meetings or inquiries as required by the trustee.
- Track acquisitions of property, devolution of property and increases in income after commencement.
- Notify the trustee of each reportable event within the statutory seven-day period.
- Continue relevant cooperation after discharge as required by Section 150(3).
Official legal sources
For the authoritative current text and any amendments or notifications, consult the India Code portal, the IBBI legal framework and the Insolvency and Bankruptcy Board of India. Applicability of individual insolvency provisions and regulations may depend on the debtor category and relevant commencement notifications.
Read more: The Insolvency and Bankruptcy Code, 2016.
This article explains the statutory provision for general legal information. It is not a substitute for advice on a particular bankruptcy proceeding.