Insolvency and Bankruptcy Code, 2016 | Section 151

Section 151 of the IBC: Rights of Bankruptcy Trustee

Section 151 of the Insolvency and Bankruptcy Code, 2016 (IBC) identifies the legal capacities a bankruptcy trustee may exercise in the trustee's official name to administer the bankrupt's estate.

These rights support the trustee's statutory functions of investigating the bankrupt's affairs, realising assets and distributing the estate under Section 149. They must be read with the other provisions of Chapter V of Part III, including restrictions and creditor-approval requirements where applicable.

Text of Section 151: Rights of bankruptcy trustee

151. For the purpose of performing his functions under this Chapter, the bankruptcy trustee may, by his official name—

hold property of every description;
make contracts;
sue and be sued;
enter into engagements in respect of the estate of the bankrupt;
employ persons to assist him;
execute any power of attorney, deed or other instrument; and
do any other act which is necessary or expedient for the purposes of or in connection with the exercise of his rights.

Source: India Code, official text of the Insolvency and Bankruptcy Code, 2016 (PDF).

Meaning and scope of the seven rights

1. Holding property - clause (a)

The trustee may hold movable, immovable and other property in an official capacity where it forms part of the administration of the bankrupt's estate. The extent of the estate is determined by the Code, particularly Sections 154 and 155; this clause does not make every asset belonging to the bankrupt available for distribution.

2. Making contracts - clause (b)

The trustee may enter into contracts required for proper estate administration, subject to applicable statutory limits, professional obligations and any necessary approvals.

3. Suing and being sued - clause (c)

The trustee has procedural capacity to participate in legal proceedings in the official name. The authority to institute or defend particular proceedings concerning estate property must also be considered alongside Section 153, which requires committee-of-creditors approval for specified acts.

4. Entering into engagements - clause (d)

The trustee may undertake engagements relating to the bankrupt's estate, such as arrangements necessary for its protection or administration, within the powers conferred by the Code.

5. Employing assistance - clause (e)

The trustee may engage people to assist in carrying out statutory functions. The engagement must remain consistent with applicable regulations and the trustee's responsibilities.

6. Executing legal instruments - clause (f)

The trustee may sign powers of attorney, deeds and other instruments needed for lawful estate administration. The legal effect of each instrument depends on the relevant transaction and governing law.

7. Performing necessary or expedient acts - clause (g)

This residual power covers acts reasonably connected with exercising the trustee's rights. It is not an unrestricted authority to bypass requirements imposed elsewhere in the IBC.

Section 149 - Functions of bankruptcy trustee: investigation of affairs, realisation of the estate and distribution of the estate.
Section 150 - Duties of the bankrupt: cooperation, disclosure of affairs and notification of specified changes in property or income.
Section 152 - General powers: includes sale of estate property, issuing receipts and dealing with certain estate rights.
Section 153 - Creditor approval: specifies acts that the trustee may undertake after obtaining approval of the committee of creditors.
Sections 154 and 155 - Vesting and composition of estate: govern vesting in the trustee and what constitutes the estate of the bankrupt.

Important distinction: Section 151 describes the trustee's legal capacity to act in an official name. It does not eliminate approvals, procedural safeguards or restrictions under other provisions of the Code.

Practical application

For example, a trustee administering an estate may need to hold estate assets, appoint professional assistance, execute transfer documents or enter into necessary agreements. Before taking a step such as pursuing estate-related litigation or conducting an act listed in Section 153, the trustee should check whether committee-of-creditors approval and other legal conditions apply.

Official law and further reading

Read the IBC on India Code, the IBBI legal framework and regulations, and the site's guide to the Insolvency and Bankruptcy Code, 2016.

Updated: 23 October 2026. This article explains the statutory framework and is not a substitute for advice on a particular bankruptcy proceeding. Check applicable commencement notifications, rules and amendments for the relevant class of debtor.