IBC Section 134: Conduct of meeting of creditors

Section 134 of Insolvency and Bankruptcy Code, 2016: Conduct of meeting of creditors

Official Bare Act Text

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

(1) The bankruptcy trustee shall be the convener of the meeting of the creditors summoned under section 133.

(2) The bankruptcy trustee shall decide the quorum for the meeting of the creditors, and conduct the meeting only if the quorum is present.

(3) The following business shall be conducted in the meeting of the creditors in which regard a resolution may be passed, namely:-

(a) the establishment of a committee of creditors;

(b) any other business that the bankruptcy trustee thinks fit to be transacted.

(4) The bankruptcy trustee shall cause the minutes of the meeting of the creditors to be recorded, signed and retained as a part of the records of the bankruptcy process.

(5) The bankruptcy trustee shall not adjourn the meeting of the creditors for any purpose for more than seven days at a time.

Legal Commentary & Landmark Judgments: Section 134

Section 134 prescribes the procedural framework for conducting meetings of creditors in individual bankruptcy proceedings.

Chairmanship and Quorum: The bankruptcy trustee chairs the meeting; the meeting is duly constituted if the statutory quorum of creditors representing the required voting value is present in person or via video link.
Agenda and Deliberations: The meeting considers the trustee's administration proposals, asset marketing strategies, valuation reports, and appointment of advisory committees.
Statutory Minutes and Records: The trustee must prepare detailed, signed minutes of the meeting, recording all discussions, objections, and voting outcomes, and file them with the Adjudicating Authority.

Key Landmark Precedents:

Committee of Creditors of Essar Steel v. Satish Kumar Gupta (2020) 8 SCC 531: Held that creditor meetings must maintain comprehensive records of deliberations to withstand judicial review before the Adjudicating Authority.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Observed that procedural precision in conducting insolvency assemblies is vital to maintain market certainty and statutory finality.

Courtroom Practice & Strategic Litigation Guidance:

Where consensus is not reached on contentious estate matters, the trustee must conduct formal e-voting or ballot voting and ensure that dissenting creditor objections are recorded verbatim in the minutes.