IBC Section 151: Rights of bankruptcy trustee

Section 151 of Insolvency and Bankruptcy Code, 2016: Rights of bankruptcy trustee

Official Bare Act Text

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

For the purpose of performing his functions under this Chapter, the bankruptcy trustee may, by his official name-

(a) hold property of every description;

(b) make contracts;

(c) sue and be sued;

(d) enter into engagements in respect of the estate of the bankrupt;

(e) employ persons to assist him;

(f) execute any power of attorney, deed or other instrument; and

(g) do any other act which is necessary or expedient for the purposes of or in connection with the exercise of his rights.

Legal Commentary & Landmark Judgments: Section 151

Section 151 defines the statutory rights of the Bankruptcy Trustee, giving him unfettered authority to hold property, execute deeds, and represent the bankrupt's estate in all legal and commercial dealings.

Statutory Ownership and Title: The bankruptcy trustee holds the estate of the bankrupt with full title and authority to possess, protect, and dispose of estate assets.
Legal Representation: The trustee is legally entitled to sue, be sued, defend actions, and enter into legal representations on behalf of the bankrupt's estate.
Power of Attorney and Instruments: Empowered to execute powers of attorney, deeds, receipts, conveyances, and commercial instruments necessary for estate administration.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court recognized that the trustee's statutory rights are designed to facilitate seamless asset management without requiring individual creditor consensus for ordinary administrative acts.
Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 436: Held that the bankruptcy trustee steps into the shoes of the bankrupt to protect the collective commercial interest of all stakeholders.

Courtroom Practice & Strategic Litigation Guidance:

Trustees executing title conveyances or sale certificates should explicitly cite Section 151 along with the bankruptcy admission order to assure registrar authorities and buyers of clear statutory title.