IBC Section 75: Punishment for false information furnished in application

Section 75 of Insolvency and Bankruptcy Code, 2016: Punishment for false information furnished in application

Official Bare Act Text

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

Where any person furnishes information in the application made under section 7, which is false in material particulars, knowing it to be false or omits any material fact, knowing it to be material, such person shall be punishable with fine which shall not be less than one lakh rupees, but may extend to one crore rupees.

Legal Commentary & Landmark Judgments: Section 75

Section 75 imposes severe monetary fines on any person who intentionally furnishes false information in an application filed under Section 7, 9, or 10, or intentionally omits any material fact therefrom.

False Information in CIRP Application: Applies where any person intentionally furnishes false information in an application under Section 7, Section 9, or Section 10.
Material Omission Penalty: Applies equally to intentionally omitting any material fact from the application.
Penal Sanction: Punishable with fine which shall not be less than one lakh rupees, but which may extend to one crore rupees.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court noted that Section 75 acts as a potent financial deterrent against unscrupulous applicants who fabricate default documents to harass corporate entities.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Affirmed that applications containing perjured or manipulated debt records attract immediate fines under Section 75.

Courtroom Practice & Strategic Litigation Guidance:

If an operational creditor files a Section 9 petition suppressing settlement emails or forging delivery challans, move an immediate IA under Section 75 before the NCLT praying for maximum penalty of Rs 1 crore and summary dismissal of the petition.