Section 6: Persons Who May Initiate Corporate Insolvency Resolution Process
Section 6 identifies who can initiate the corporate insolvency resolution process (CIRP) when a corporate debtor commits a default. It is the gateway provision for applications by financial creditors, operational creditors and the corporate debtor itself.
What does Section 6 provide?
Where any corporate debtor commits a default, a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate debtor in the manner as provided under this Chapter.
Section 6 confers eligibility to initiate CIRP; the application, evidence and admission requirements are governed by the provisions that follow, particularly Sections 7, 8, 9 and 10.
Who can initiate CIRP under Section 6?
| Eligible applicant | Relevant provision | Nature of application |
|---|---|---|
| Financial creditor | Section 7 | Applies to the National Company Law Tribunal following a financial debt default, subject to applicable conditions. |
| Operational creditor | Sections 8 and 9 | First delivers the prescribed demand notice or invoice demanding payment; may apply if statutory requirements are satisfied. |
| Corporate debtor through an authorised corporate applicant | Section 10, read with Section 5(5) | May apply on its own default, subject to authorisation, eligibility and statutory restrictions. |
Important statutory definitions
Corporate debtor - Section 3(8)
A corporate person who owes a debt to any person. Section 3(7) defines a corporate person and specifies exclusions, including financial service providers except where otherwise notified under the Code.
Default - Section 3(12)
Non-payment of debt when the whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or corporate debtor, as the case may be.
Financial creditor - Section 5(7)
A person to whom a financial debt is owed, including a person to whom such debt has been legally assigned or transferred. Financial debt is defined in Section 5(8), including the statutory treatment of certain real-estate allottee transactions.
Operational creditor - Section 5(20)
A person to whom an operational debt is owed, including a person to whom it has been legally assigned or transferred. Operational debt under Section 5(21) generally concerns goods, services, employment and specified statutory dues.
Corporate applicant - Section 5(5)
Includes the corporate debtor; an authorised member or partner; a person managing its operations and resources; or a person exercising control and supervision over its financial affairs, subject to the statutory language.
Minimum default and statutory eligibility
Section 4 governs the minimum default for ordinary corporate insolvency proceedings. The Central Government notification dated 24 March 2020 increased the threshold to Rs. 1 crore. This is distinct from the special requirements for certain financial creditors under Section 7, including the collective filing thresholds applicable to specified classes of creditors and real-estate allottees.
Applications are also subject to the limitations in Sections 10A and 11, where applicable. Section 10A bars CIRP applications for defaults arising during the notified COVID-19 suspension period (25 March 2020 to 24 March 2021); the bar is permanent for defaults occurring in that period.
How is CIRP initiated?
1. Financial creditor: Section 7
A financial creditor may file an application with the NCLT in the prescribed form with records of default and other required information. The tribunal examines the statutory requirements for admission, including the occurrence of default.
2. Operational creditor: Sections 8 and 9
The operational creditor must serve a demand notice or copy of an invoice demanding payment under Section 8. If payment is not made and the applicable conditions under Section 9 are met, an application may be filed after the statutory ten-day period. A pre-existing dispute can be material to admission.
3. Corporate applicant: Section 10
An eligible corporate applicant may seek CIRP following the corporate debtor's default, with the prescribed records, approvals and proposed interim resolution professional information as applicable. The application is not automatically admitted merely because the debtor applies.
What happens after admission?
Admission ordinarily triggers the insolvency commencement date, a moratorium under Section 14, public announcement and appointment of an interim resolution professional. CIRP is designed as a time-bound resolution process, subject to the periods and extensions prescribed under Section 12 and applicable judicial directions.
Frequently asked questions
Can a company initiate its own insolvency process?
Yes. Section 6 permits the corporate debtor to initiate CIRP through an eligible corporate applicant under Section 10, subject to the applicable statutory conditions.
Can every unpaid creditor directly apply under Section 6?
No. The applicant must qualify as a financial or operational creditor (or corporate applicant), meet the relevant statutory requirements and satisfy the applicable default threshold and filing rules.
Is Section 6 itself the application procedure?
No. It identifies the persons who may initiate CIRP; Sections 7 to 10 provide the principal application routes and related procedures.
Legislation and official references
Consult the IBBI legal framework, the Application to Adjudicating Authority Rules, the updated IBBI regulations and the IBBI legal framework search for current texts, amendments and notifications, including the Insolvency and Bankruptcy Code (Amendment) Act, 2026 and commencement notifications. The commencement and applicability of individual amendments must be checked against official notifications.
Read also: The Insolvency and Bankruptcy Code, 2016 and Section 5 - Definitions.
Last reviewed: 21 October 2026. This article provides general legal information; applicability depends on the facts and the law in force.