Section 185 IBC: Punishment for Contravention by Insolvency Professionals
Section 185 prescribes criminal punishment where an insolvency professional deliberately contravenes provisions of Part III of the Insolvency and Bankruptcy Code, 2016. The provision distinguishes intentional breaches from inadvertent errors.
Text of Section 185
185. If an insolvency professional deliberately contravenes the provisions of this Part, he shall be punishable with imprisonment for a term which may extend to six months, or with fine, which shall not be less than one lakh rupees, but may extend to five lakhs rupees, or with both.
Source: India Code - Insolvency and Bankruptcy Code, 2016 (official PDF). Check subsequent amendments and commencement notifications before relying on a provision for a specific proceeding.
Meaning and scope of Section 185
Insolvency professional: A person enrolled with an insolvency professional agency and registered with the Insolvency and Bankruptcy Board of India (IBBI), as contemplated by Sections 3(19), 206 and 207 of the Code.
Deliberately contravenes: The statutory wording requires a deliberate breach. Whether conduct satisfies that requirement depends on evidence and the facts; not every mistake or procedural lapse automatically constitutes the offence.
This Part: Section 185 appears in Part III, which concerns insolvency resolution and bankruptcy for individuals and partnership firms. Its wording should not be treated as a general criminal penalty for every breach anywhere in the Code.
Punishment under Section 185
| Type | Statutory limit |
|---|---|
| Imprisonment | Up to six months |
| Fine | Minimum Rs. 1 lakh; maximum Rs. 5 lakh |
| Combined punishment | Imprisonment and fine may both be imposed |
The provision sets maximum imprisonment and a fine range. It does not require imprisonment in every case; the outcome depends on applicable law and judicial determination.
Related duties and professional regulation
Section 208 sets out functions and obligations of insolvency professionals, including diligence, compliance with applicable rules and professional requirements, and the prescribed code of conduct. Sections 206 and 207 address enrolment and registration. Professional or regulatory action by IBBI is distinct from criminal punishment under Section 185.
Section 220 concerns disciplinary powers and orders following inspection or investigation. Any proposed action must be evaluated against the relevant statutory provision, rules, regulations and procedural safeguards.
When can Section 185 become relevant?
Possible issues include an allegation that a professional intentionally disregarded a mandatory duty under an applicable Part III process or knowingly acted contrary to a specific statutory requirement. Establishing an offence requires identifying the applicable provision, the conduct, the deliberate nature of the breach, and whether that part of the law was in force for the relevant process.
Commencement matters: Different provisions of Part III have been brought into force at different times and for different classes of persons. The legal position for personal guarantors to corporate debtors may differ from other individuals and partnership firms. Consult current commencement notifications before assuming a Part III procedure applies.
Difference between Section 184 and Section 185
Section 184 addresses specified false information and dishonest conduct by debtors or creditors in the insolvency resolution process. Section 185 concerns deliberate contravention of Part III by an insolvency professional. The relevant person, prohibited conduct and penalties therefore differ.
Frequently asked questions
Does every professional mistake attract Section 185?
No. The section expressly uses the word "deliberately". Whether the required elements are proved depends on the facts and applicable law.
Can a professional face both imprisonment and a fine?
Yes. The statute permits imprisonment, a fine, or both, subject to its limits.
Is an IBBI disciplinary penalty the same as Section 185 punishment?
No. Regulatory disciplinary proceedings and criminal liability arise under different legal provisions and procedures.
Official legal references
- India Code - Insolvency and Bankruptcy Code, 2016
- IBBI - Legal framework, amendments and regulations
- Insolvency and Bankruptcy Board of India
- Read the Insolvency and Bankruptcy Code, 2016 - LawDadi
Updated: 23 October 2026. This article is general legal information, not advice on any particular proceeding. Verify the latest statutory text and applicable notifications.