Section 90 of the Insolvency and Bankruptcy Code, 2016: Directions for Compliance with Restrictions and Duties
Section 90 empowers the resolution professional in a fresh start process to seek directions from the Adjudicating Authority when the debtor does not comply with statutory restrictions or duties, or when another issue under the chapter requires directions and no specific provision addresses it.
What does Section 90 provide?
The provision is titled "Directions for compliance of restrictions, etc." It has two subsections, each describing when a resolution professional may approach the Adjudicating Authority for an appropriate direction.
Section 90(1)(a): Compliance with restrictions under Section 85(3)
If a debtor fails to observe a restriction imposed by Section 85(3) during the moratorium, the resolution professional may apply to the Adjudicating Authority for directions requiring compliance. These restrictions include limits on company directorship and management, disposal of assets, certain disclosure obligations in business dealings, and travel outside India without the Adjudicating Authority's permission.
Section 90(1)(b): Compliance with duties under Section 88
The resolution professional may also request directions where the debtor does not fulfil the general duties specified in Section 88. Those duties include providing information about the debtor's affairs, attending meetings, cooperating with the resolution professional, promptly correcting material errors or omissions, and reporting financial changes that affect the fresh start process.
Section 90(2): Other matters without a specific procedure
Where an issue arises under Chapter II of Part III and no specific provision has been made for directions on that issue, the resolution professional may seek directions from the Adjudicating Authority. This is a residual procedural power; it does not itself create a new debt discharge, exemption, or automatic penalty.
Key legal terms explained
- Resolution professional: The insolvency professional appointed for the fresh start process under Section 82, subject to replacement under Section 89.
- Debtor: The individual seeking relief through the fresh start framework, subject to the eligibility requirements of Section 80.
- Adjudicating Authority: The competent forum under the Code; for individuals and partnership firms the general rule is the Debt Recovery Tribunal under Section 179, subject to special provisions such as Section 60 for personal guarantors to corporate debtors.
- Moratorium: The statutory protection and corresponding restrictions associated with admission of a fresh start application under Section 85, distinct from the interim moratorium under Section 81.
How a request for directions fits into the process
| Stage | Relevant provision | Purpose |
|---|---|---|
| Appointment of resolution professional | Section 82 | Appoints the professional responsible for examining and administering the application. |
| Admission of application | Section 84 | Provides for the Adjudicating Authority's decision on admission or rejection. |
| Restrictions during moratorium | Section 85(3) | Sets obligations and restrictions applying to the debtor during the moratorium. |
| Debtor cooperation | Section 88 | Requires information, cooperation, corrections and disclosure of relevant changes. |
| Directions for compliance | Section 90 | Allows the resolution professional to seek directions where required. |
| Revocation and discharge | Sections 91 and 92 | Address revocation of admission and discharge, subject to their statutory conditions. |
Practical significance of Section 90
Section 90 provides a mechanism for addressing non-cooperation and procedural difficulties without leaving the resolution professional to act solely on informal requests. For example, if a debtor refuses to supply financial records or fails to disclose a material change in circumstances, the professional can seek directions under Section 90(1)(b). If the debtor disposes of assets contrary to Section 85(3), Section 90(1)(a) may be relevant.
The section says the professional may apply for directions. It does not specify a fixed filing deadline or prescribe a particular order that the Adjudicating Authority must make in every case. Any requested relief must be assessed against the Code and applicable procedural rules.
Frequently asked questions
Can a creditor directly apply under Section 90?
Section 90 expressly authorises the resolution professional to apply for directions. Creditor objections and challenges have separate mechanisms under Sections 86 and 87, where applicable.
Does Section 90 automatically cancel the fresh start process?
No. Section 90 concerns directions for compliance. Revocation of an admission order is addressed separately in Section 91 and depends on the statutory grounds and procedure.
Is Section 90 the same as Section 89?
No. Section 89 deals with replacement of the resolution professional. Section 90 concerns applications by the resolution professional for directions relating to debtor restrictions, duties, and other matters under the chapter.
Related provisions and official resources
Read the Insolvency and Bankruptcy Code, 2016 overview and the adjoining provisions on Section 85: effect of admission, Section 88: general duties of debtor, and Section 89: replacement of resolution professional.
For authoritative legislative text, amendments, notifications and regulatory material, consult the India Code official legislation database, the Insolvency and Bankruptcy Board of India legal framework, and the Ministry of Corporate Affairs. The exact applicable version and commencement of provisions should be verified against official notifications.
This article explains the statutory framework for general information and is not a substitute for advice on an individual proceeding.