IBC Section 129: Statement of financial position

Section 129 of Insolvency and Bankruptcy Code, 2016: Statement of financial position

Official Bare Act Text

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

(1) Where a bankruptcy order is passed on the application for bankruptcy by a creditor under section 123, the bankrupt shall submit his statement of financial position to the bankruptcy trustee within seven days from the bankruptcy commencement date.

(2) The statement of financial position shall be submitted in such form and manner as may be prescribed.

(3) Where the bankrupt is a firm, its partners on the date of the order shall submit a joint statement of financial position of the firm, and each partner of the firm shall submit a statement of his financial position.

(4) The bankruptcy trustee may require the bankrupt or any other person to submit in writing further information explaining or modifying any matter contained in the statement of financial position.

Legal Commentary & Landmark Judgments: Section 129

Section 129 mandates the bankrupt to prepare and submit an exhaustive Statement of Financial Position to the Bankruptcy Trustee within twenty-one days of the bankruptcy order.

Twenty-One Day Mandatory Deadline: The bankrupt must furnish a verified Statement of Financial Position within 21 days from the date of the bankruptcy order.
Comprehensive Disclosure Scope: Must disclose all assets, debts, liabilities, excluded assets, personal guarantees executed, bank accounts, pending litigation, and transactions entered into during the look-back period.
Statutory Affidavit of Truth: The statement must be supported by a statutory affidavit affirming absolute completeness and veracity; deliberate omissions attract criminal penal liability under Section 186.

Key Landmark Precedents:

Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 436: The Supreme Court observed that the debtor's duty of truthful disclosure under Section 129 is the bedrock of individual bankruptcy administration.
Anuj Jain v. Axis Bank Ltd. (2020) 8 SCC 401: Stressed that statutory disclosures under insolvency laws must transparently reveal all asset alienations and transactions to enable forensic scrutiny by trustees.

Courtroom Practice & Strategic Litigation Guidance:

Bankruptcy trustees must rigorously cross-verify the Section 129 statement with Income Tax filings, CERSAI records, and land registry portals; any discrepancy should immediately prompt avoidance applications under Sections 164-167.