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Section 39: Verification of claims

Insolvency and Bankruptcy Code, 2016 • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2016
Section 38 All 255 Sections of Insolvency and Bankruptcy Code, 2016 Section 40

Legal Commentary & Landmark Judgments: Section 39

Section 39 mandates that the liquidator must verify the claims submitted by creditors within statutory time limits and empowers the liquidator to call for additional evidence.

  • Mandatory Verification Duty: The liquidator shall verify the claims submitted under Section 38 within such time as specified by the Board (thirty days under Regulation 30).
  • Power to Require Additional Evidence: The liquidator may require any creditor or the corporate debtor to produce any other document or evidence which the liquidator thinks necessary for the purpose of verifying the whole or any part of the claim.
  • Quasi-Judicial Scrutiny: The liquidator acts as a quasi-judicial functionary bound by natural justice when evaluating claims.
Key Landmark Precedents:
  • Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court noted that while an RP in CIRP merely collates claims, a liquidator under Section 39 exercises quasi-judicial authority to determine and adjudicate claims.
  • Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2020) 8 SCC 531: Reaffirmed the distinct adjudicatory function of the liquidator in verifying and determining claims under Sections 39 and 40.
Courtroom Practice & Strategic Litigation Guidance:

Ensure all verification memos under Section 39 state clear, objective mathematical reasons for any partial deduction (such as penal interest or unverified invoices). The liquidator must issue formal communication under Section 40 within 7 days of determination.

Section 38 All 255 Sections of Insolvency and Bankruptcy Code, 2016 Section 40