Insolvency and Bankruptcy Code, 2016 | Corporate liquidation

Section 37 of IBC 2016: Powers of Liquidator to Access Information

Section 37 enables a liquidator to obtain records needed to verify creditors' claims and identify assets forming the corporate debtor's liquidation estate. It also provides a mechanism for creditors to request financial information.

At a glance: Section 37(1) lists information sources available to the liquidator. Section 37(2) permits creditors to request financial information. Section 37(3) requires a response within seven days, either providing the information or stating reasons for withholding it.

Purpose and scope of Section 37

In a corporate liquidation, accurate records help establish what the company owns, what it owes and which claims should be admitted. Section 37 gives the liquidator statutory access to specified information systems for two defined purposes: admission and proof of claims and identification of liquidation estate assets relating to the corporate debtor.

The opening words, notwithstanding anything contained in any other law for the time being in force, are a non-obstante clause giving this statutory access overriding effect where inconsistent laws would otherwise obstruct it. The power remains tied to the purposes stated in the section and applicable procedural requirements.

Section 37(1): Information sources the liquidator may access

The provision identifies the following seven categories:

Clause (a): Information utilities. Records maintained by an information utility, including relevant debt and default information.
Clause (b): Credit information systems. Credit information systems regulated under applicable law.
Clause (c): Government agencies and registries. Central, State or local government agencies, including registration authorities.
Clause (d): Liability information systems. Systems recording financial and non-financial liabilities under applicable law.
Clause (e): Security interest records. Systems recording securities and assets offered as security interests.
Clause (f): IBBI databases. Any database maintained by the Insolvency and Bankruptcy Board of India.
Clause (g): Other specified sources. Any additional source specified by the Board.

For example, the liquidator may need company registration records to trace ownership of property, security-interest records to assess encumbrances, or information utility records to assess a debt claim. Access to these records does not by itself decide ownership or establish the validity of a claim; those questions must be addressed under the applicable provisions of the Code.

Section 37(2): Creditors' right to request information

Creditors may require the liquidator to provide financial information relating to the corporate debtor, in the manner specified under the applicable framework. The provision supports transparency during liquidation, while not creating an unrestricted right to every record held by the liquidator.

Section 37(3): Seven-day response requirement

When a creditor requests financial information under Section 37(2), the liquidator must, within seven days from the date of the request, either provide the requested information or give reasons for not providing it. The section therefore requires a timely response, even where the information cannot be disclosed.

Important terms and connected legal provisions

Liquidator

An insolvency professional appointed or continued as liquidator under Section 34, responsible for conducting liquidation under the Code and applicable regulations.

Information utility

An entity registered under the Code to receive, authenticate, maintain and provide access to financial information in accordance with the statutory framework. The Code's definitions and provisions governing information utilities are relevant to the records accessed under Section 37.

Liquidation estate

The estate formed by the liquidator under Section 36, comprising assets available for liquidation subject to express statutory exclusions, including certain third-party assets and employee-benefit funds.

Verification and admission of claims

Section 38 concerns receipt and collection of claims, Section 39 concerns verification, and Section 40 concerns admission or rejection of claims. Section 37 supports these steps by enabling access to relevant evidence.

Powers and duties of liquidator

Section 35 sets out the liquidator's broader powers, including taking custody of assets, verifying claims, investigating transactions and making distributions in accordance with the Code.

Practical significance for creditors and liquidators

Creditors should make clear, identifiable requests for financial information and retain evidence of the date of submission. Liquidators should maintain a record of requests, assess whether the requested material falls within Section 37(2), and respond within the statutory seven-day period with the information or an explanation for non-disclosure.

Information gathering should also be coordinated with the IBBI legal framework and updated regulations, including the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, as amended and applicable to the proceeding.

Statutory text and official resources

India Code - official repository of Central legislation (locate the Insolvency and Bankruptcy Code, 2016, Section 37).
Insolvency and Bankruptcy Board of India (IBBI) - official regulator.
IBBI updated legal framework - regulations, amendments and relevant circulars.
The Insolvency and Bankruptcy Code 2016 - LawDadi index.

Legal information is provided for general understanding. Statutory amendments, applicable regulations and case-specific orders should be checked before acting.