IBC Section 29: Preparation of information memorandum

Section 29 of Insolvency and Bankruptcy Code, 2016: Preparation of information memorandum

Official Bare Act Text

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

(1) The resolution professional shall prepare an information memorandum in such form and manner containing such relevant information as may be specified by the Board for formulating a resolution plan.

(2) The resolution professional shall provide to the resolution applicant access to all relevant information in physical and electronic form, provided such resolution applicant undertakes-

(a) to comply with provisions of law for the time being in force relating to confidentiality and insider trading;

(b) to protect any intellectual property of the corporate debtor it may have access to; and

(c) not to share relevant information with third parties unless clauses (a) and (b) of this sub-section are complied with.

Explanation.-For the purposes of this section, "relevant information" means the information required by the resolution applicant to make the resolution plan for the corporate debtor, which shall include the financial position of the corporate debtor, all information related to disputes by or against the corporate debtor and any other matter pertaining to the corporate debtor as may be specified.

Legal Commentary & Landmark Judgments: Section 29

Section 29 governs the formulation of the Information Memorandum and anchors the statutory eligibility vetting of prospective resolution applicants under Section 29A.

Resolution Professional: The Resolution Professional is statutorily mandated to prepare a comprehensive Information Memorandum containing details of the debtor's assets, liabilities, audited financials, and operational state.
Core Legal Standard: This document is shared with prospective resolution applicants subject to strict confidentiality undertakings under Section 29(2).

Crucially, the section works in tandem with Section 29A, which bars wilful defaulters, tainted promoters, and connected persons from submitting resolution plans.

Key Landmark Precedents:

ArcelorMittal India Pvt. Ltd. v. Satish Kumar Gupta (2019) 2 SCC 1: The Supreme Court authoritatively held that courts and resolution professionals must look behind corporate facades to ascertain control and acting-in-concert relationships to prevent ineligible promoters from bidding.
Bank of Baroda v. MBL Infrastructures Ltd. (2022) 5 SCC 661: Reaffirmed that resolution applicant eligibility is a mandatory statutory condition that cannot be relaxed by the CoC or tribunals.

Legal Commentary:

Section 29 ensures information symmetry among prospective bidders while upholding the integrity of the bidding pool. By anchoring the Information Memorandum and eligibility screening, it enables transparent price discovery for stressed corporate assets.