Insolvency and Bankruptcy Code, 2016 | Section 34

Section 34 of IBC: Appointment of Liquidator and Fees

Section 34 governs who conducts the liquidation of a corporate debtor, when a resolution professional may be replaced, how management powers transfer, and how the liquidator is remunerated.

Legal context: This provision operates when the Adjudicating Authority orders liquidation under Section 33. The applicable procedural and fee requirements must also be read with the IBBI (Liquidation Process) Regulations, 2016, as amended.

Meaning and scope of Section 34

A corporate debtor is a corporate person that owes a debt. The Adjudicating Authority for corporate insolvency and liquidation is generally the National Company Law Tribunal (NCLT). A resolution professional administers the corporate insolvency resolution process (CIRP), while a liquidator administers liquidation, subject to the Code and regulations.

Section 34: Subsection-wise provisions and explanation

Section 34(1) - Appointment following liquidation order

Where the Adjudicating Authority passes a liquidation order under Section 33, the resolution professional appointed for the CIRP ordinarily acts as liquidator unless replaced under subsection (4).

Section 34(2) - Transfer of management powers

Upon appointment of the liquidator, the powers of the board of directors, key managerial personnel and partners of the corporate debtor cease and vest in the liquidator.

Section 34(3) - Duty to cooperate

Personnel of the corporate debtor must provide the assistance and cooperation required by the liquidator. Section 19 supplies the cooperation framework, with the statutory substitutions applicable to the liquidation context.

Section 34(4) - Replacement of resolution professional

The Adjudicating Authority shall replace the resolution professional where (a) the resolution plan submitted under Section 30 was rejected for non-compliance with Section 30(2), or (b) the Insolvency and Bankruptcy Board of India (IBBI) recommends replacement for reasons recorded in writing.

Section 34(5) - Request for another professional

For a replacement under subsection (4)(a), the Adjudicating Authority may direct the Board to propose another insolvency professional as liquidator.

Section 34(6) - Ten-day period

The Board must propose another insolvency professional within ten days of the direction under subsection (5).

Section 34(7) - Formal appointment

On receiving the Board's proposal, the Adjudicating Authority appoints the proposed insolvency professional as liquidator by order.

Section 34(8) - Liquidator's fee

The liquidator's fee for conducting liquidation is subject to the framework specified by the Board, including applicable provisions of Regulation 4 of the IBBI (Liquidation Process) Regulations, 2016.

Section 34(9) - Source of fee payment

Fees for liquidation proceedings are paid from proceeds of the liquidation estate in accordance with Section 53 and the applicable regulations.

How is the liquidator's fee determined?

Regulation 4 provides the operative fee mechanism. Depending on the applicable circumstances, the fee may be determined through the committee of creditors or the stakeholders' consultation committee, or under the regulatory fee framework linked to realisations and distributions. The applicable amended text, orders and IBBI clarifications should be checked before calculating fees in an individual case.

Section 53 sets out the priority framework for distribution of liquidation proceeds. Liquidation costs receive the priority prescribed by that section, subject to the Code and regulations.

Section 19: Cooperation by personnel and promoters in the insolvency process.
Section 30(2): Statutory requirements that a resolution plan must satisfy.
Section 33: Circumstances in which liquidation may be ordered.
Section 35: Powers and duties of the liquidator.
Section 53: Distribution of assets and the statutory waterfall.
Regulation 3: Eligibility for appointment as liquidator.
Regulation 4: Liquidator's fee.

Official sources and further reading

Consult the Insolvency and Bankruptcy Board of India, its updated liquidation regulations and the IBBI clarification on liquidator's fee (28 September 2023). For the wider statute, see The Insolvency and Bankruptcy Code, 2016.

Updated: 21 October 2026. This article is for general legal information; consult the latest notified statutory text, regulations and relevant orders for a specific matter.