IBC Section 116: Implementation and supervision of repayment plan

Section 116 of Insolvency and Bankruptcy Code, 2016: Implementation and supervision of repayment plan

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

(1) The resolution professional appointed under section 97 or under section 98 shall supervise the implementation of the repayment plan.

(2) The resolution professional may apply to the Adjudicating Authority for directions, if necessary, in relation to any particular matter arising under the repayment plan.

(3) The Adjudicating Authority may issue directions to the resolution professional on the basis of an application under sub-section (2).

Legal Commentary & Landmark Judgments: Section 116

Section 116 mandates that the resolution professional supervises the implementation of the approved repayment plan and submits regular implementation progress reports to the Adjudicating Authority.

Supervisory Oversight: The resolution professional is legally tasked with supervising and monitoring debtor compliance with each tranche, asset liquidation, or restructuring step specified in the repayment plan.
Statutory Progress Reporting: The resolution professional must submit periodic reports on implementation status to the Adjudicating Authority within the statutory intervals specified in the regulations.
Directional Powers of Adjudicating Authority: Empowers the Adjudicating Authority, on receipt of a report or on application by the resolution professional or creditor, to issue directions for effective implementation or to rectify defaults.

Key Landmark Precedents:

Lalit Kumar Jain v. Union of India (2021) 9 SCC 321: The Supreme Court recognized that supervisory control under Part III ensures the debtor complies strictly with settlement promises made to creditors before enjoying legal discharge.
Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 436: The Apex Court affirmed that the resolution professional functions as a supervisory facilitator to enforce accountability and transparency throughout individual repayment schemes.

Courtroom Practice & Strategic Litigation Guidance:

Where a debtor encounters genuine procedural friction in liquidating scheduled assets, counsel for the debtor should proactively approach the resolution professional to file an application for directions under Section 116 before an unrectified default triggers premature termination under Section 118.