Section 94 IBC: Application by Debtor to Initiate Insolvency Resolution Process
Section 94 permits an eligible debtor who has committed a default to seek an insolvency resolution process before the competent Adjudicating Authority. It specifies who may apply, which debts may be included, disqualifications, and the requirement to follow the prescribed application procedure.
What Section 94 provides: Subsection-wise explanation
Section 94(1): Debtor may initiate proceedings
A debtor who commits a default may submit an application to the Adjudicating Authority personally or through a resolution professional to initiate the insolvency resolution process. Filing is not equivalent to admission: the application must undergo the statutory examination and decision process.
Section 94(2): Application concerning a partnership firm
Where a debtor is a partner of a firm, an application concerning the firm cannot be made by that partner alone unless all or a majority of the partners file the application jointly. Applicability is subject to the relevant commencement notifications.
Section 94(3): Excluded debts cannot form the basis of the application
The application may be submitted only in respect of debts that are not excluded debts. Section 79(15) defines excluded debt and includes, among other categories, liability to pay a fine imposed by a court or tribunal, maintenance obligations, student loans and other liabilities specified in that definition. The statutory definition must be checked for its complete scope.
Section 94(4): Persons disqualified from applying
A debtor cannot apply under subsection (1) while:
- being an undischarged bankrupt;
- undergoing a fresh start process;
- undergoing an insolvency resolution process; or
- undergoing a bankruptcy process.
Section 94(5): Twelve-month restriction
A debtor is ineligible to apply if an application under the same Chapter was admitted in respect of that debtor during the 12 months immediately preceding the proposed filing date.
Section 94(6): Form, manner and fee
The application must follow the form, filing method and fee prescribed by the applicable rules. For personal guarantors to corporate debtors, consult the relevant 2019 application rules and the current IBBI regulations, amendments and circulars before filing.
Important legal definitions
Default: Section 3(12) describes default as non-payment of a debt when the whole or any part or instalment has become due and payable and is not paid.
Debtor: Section 79(12) defines debtor for Part III, subject to the statutory context.
Excluded debt: Section 79(15) identifies categories of debt excluded for the purposes of Part III.
Personal guarantor: Under Section 5(22), a personal guarantor is an individual who is the surety in a contract of guarantee to a corporate debtor.
What happens after filing a Section 94 application?
- Preparation and filing: The debtor supplies prescribed particulars, evidence of default, creditor information and other required disclosures.
- Interim moratorium under Section 96: Filing triggers the statutory interim moratorium in relation to debts, subject to the section's terms and applicable law. This is distinct from the moratorium following admission.
- Resolution professional: Sections 97 and 98 address appointment and replacement of the resolution professional.
- Examination and report: Under Section 99, the resolution professional examines the application and recommends admission or rejection.
- Adjudication: Under Section 100, the Adjudicating Authority decides whether to admit or reject the application.
- Further process: If admitted, the subsequent provisions govern the moratorium, creditor participation, repayment plan and other procedural steps.
Section 60 governs the NCLT forum for personal guarantors to corporate debtors, including relevant connected proceedings. Jurisdiction should be confirmed for the specific case.
Practical filing considerations
Applicants should verify the guarantor's legal status, the guarantee documentation, evidence of invocation and default where relevant, a complete debt and asset statement, pending proceedings, previous insolvency applications and the latest prescribed forms. Misstatements or omissions can affect the application and may have other legal consequences.
The IBBI legal framework lists the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors Regulations, 2019, including amendments made in 2026. Use the current consolidated regulations and applicable circulars rather than relying on superseded forms.
Official legislation and regulatory references
Updated: 23 October 2026. This article is general legal information; statutory commencement, amendments and applicable rules should be verified for individual proceedings.