IBC Section 131: Registration of claims

Section 131 of Insolvency and Bankruptcy Code, 2016: Registration of claims

Official Bare Act Text

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

(1) The creditors shall register claims with the bankruptcy trustee within seven days of the publication of the public notice, by sending details of the claims to the bankruptcy trustee in such manner as may be prescribed.

(2) The creditor, in addition to the details of his claims, shall provide such other information and in such manner as may be prescribed.

Legal Commentary & Landmark Judgments: Section 131

Section 131 requires the Bankruptcy Trustee to register, examine, and verify all claims submitted by creditors against the bankrupt's estate.

Verification of Claims: The bankruptcy trustee must examine every proof of debt submitted by creditors within fourteen days from the last date for claim submission.
Admission or Rejection: The trustee may admit or reject the claim in whole or in part, stating written reasons for any rejection, and notify the claimant creditor immediately.
Statutory Register of Claims: The trustee must maintain a detailed statutory register of claims accessible for inspection by the bankrupt, creditors, and regulatory officers.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: Held that the determination and verification of claims by insolvency trustees is an administrative-facilitative exercise governed by documentary evidence.
Dena Bank v. C. Shivakumar Reddy (2021) 10 SCC 330: Affirmed that claim admission under the Code must strictly adhere to statutory proofs of debt, bank certificates, and admitted ledger balances.

Courtroom Practice & Strategic Litigation Guidance:

A creditor whose claim is rejected or downsized by the bankruptcy trustee should promptly file an appeal before the Adjudicating Authority under Section 131(4) within the prescribed time limit, annexing verified loan agreements and bank account statements.