Section 95: Application by Creditor to Initiate Insolvency Resolution Process
Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC) explains how a creditor may seek commencement of an insolvency resolution process against an eligible individual debtor, including a personal guarantor to a corporate debtor under the notified framework.
What does Section 95 provide?
A creditor may file an application alone, jointly with other creditors, or through a resolution professional before the competent Adjudicating Authority. A creditor filing under Section 95 must satisfy the applicable statutory and procedural requirements; filing itself does not amount to admission of the case.
Section 95 explained, subsection by subsection
Section 95(1): Who may file?
A creditor can apply individually, together with other creditors, or through a resolution professional. For notified personal guarantor matters, the creditor seeks initiation of the individual insolvency resolution process rather than corporate insolvency resolution against the company itself.
Section 95(2): Partnership debts
For a partnership debt owed to a creditor, the statutory provision permits an application against one or more partners or against the firm, subject to the commencement and applicability of the relevant provisions.
Section 95(3): Proceedings involving partners
Where an application against one partner is already pending, a further application against another partner of the same firm must be presented to, or transferred to, the Adjudicating Authority handling the first application. That authority may direct consolidation where appropriate.
Section 95(4): Supporting evidence
The application must include details of the debt outstanding on the filing date, evidence that the debtor failed to pay within 14 days after service of a demand notice, and relevant proof of default or non-payment. The prescribed forms and rules govern the supporting documents.
Section 95(5): Copy to the debtor
The creditor must also provide the debtor with a copy of the application. Proof of service is important to procedural compliance.
Section 95(6): Prescribed form and fee
The application must follow the applicable prescribed form, filing procedure and fee requirements. For personal guarantors to corporate debtors, consult the 2019 application rules listed by IBBI, including the creditor application form and demand notice requirements.
Section 95(7): Documents specified by regulations
In addition to the statute and rules, the relevant regulations may specify information and documents to accompany the filing. Check the latest IBBI legal framework for amendments and applicable forms.
Important legal terms
Creditor: Under Section 3(10), a person to whom a debt is owed, including specified classes of creditors. Debt: Under Section 3(11), a liability or obligation in respect of a claim that is due from any person. Default: Under Section 3(12), non-payment of a debt when it has become due and payable. Personal guarantor: An individual who is the surety in a contract of guarantee to a corporate debtor, as defined in Section 5(22).
What happens after a Section 95 application?
- Demand and filing: The creditor serves the prescribed demand notice and, following the required period and non-payment, files the application with evidence and serves a copy on the debtor.
- Interim moratorium (Section 96): On filing, the statutory interim moratorium applies to debts covered by the provision, subject to statutory exceptions. It is distinct from a moratorium following admission.
- Resolution professional (Sections 97 and 98): The Adjudicating Authority follows the statutory appointment or replacement procedure.
- Examination (Section 99): The resolution professional examines the application and recommends admission or rejection, generally within 10 days of appointment under the statutory text.
- Decision (Section 100): The Adjudicating Authority passes an order admitting or rejecting the application, within the statutory period measured from submission of the Section 99 report.
For personal guarantors, the National Company Law Tribunal (NCLT) ordinarily exercises jurisdiction under Section 60, including the special jurisdictional rules where corporate debtor proceedings are pending. The exact forum and procedural posture should be verified for each case.
Practical filing checklist
- Identity and particulars of the creditor and debtor or personal guarantor.
- Loan, facility, guarantee and related contractual documents.
- Statement of account and computation of the amount due.
- Demand notice and proof of service, with evidence of non-payment after the statutory period.
- Documents evidencing invocation of guarantee, where relevant to the claim.
- Proof of default, information utility records where applicable, and other prescribed attachments.
- Prescribed form, declaration, authorization and fee.
Official law and regulatory sources
- Insolvency and Bankruptcy Code, 2016 - India Code (official PDF).
- IBBI: Rules, including the 2019 personal guarantor application rules.
- IBBI: Current regulations and amendments, including the 2019 personal guarantor insolvency resolution regulations as amended in 2026.
- IBBI: Circulars and prescribed reporting formats.
Frequently asked questions
Does filing a Section 95 application automatically start the insolvency resolution process?
No. Filing triggers the interim moratorium under Section 96, but admission or rejection is determined separately under Section 100.
Is the 14-day demand period the same as the Section 100 decision period?
No. Section 95(4)(b) concerns non-payment within 14 days after service of demand notice; Section 100 sets a separate statutory decision period following the resolution professional's report.
Can several creditors file together?
Yes. Section 95(1) expressly permits a joint application, subject to the applicable rules and evidence requirements.
This article is general legal information. The relevant commencement notifications, amendments, tribunal rules and case-specific facts should be checked before filing.