IBC Section 88: General duties of debtor

Section 88 of Insolvency and Bankruptcy Code, 2016: General duties of debtor

Official Bare Act Text

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

The debtor shall-

(a) make available to the resolution professional all information relating to his affairs, attend meetings and comply with the requests of the resolution professional in relation to the fresh start process;

(b) inform the resolution professional as soon as reasonably possible of-

(i) any material error or omission in relation to the information or document supplied to the resolution professional; or

(ii) any change in financial circumstances after the date of application, where such change has an impact on the fresh start process.

Legal Commentary & Landmark Judgments: Section 88

Section 88 provides the statutory right of creditors to file objections before the Resolution Professional against the inclusion of debts or debtor eligibility within thirty days of notice.

30-Day Creditor Objection Window: Any creditor mentioned in the order under Section 86 may, within thirty days of receipt of the order, file an objection with the resolution professional.
Permissible Grounds of Objection: Objection may be on grounds that: (a) A debt is not a qualifying debt; (b) The debtor does not satisfy Section 80 conditions; (c) The debtor committed fraud or non-disclosure.
RP Examination & Hearing: The RP must examine the objection and give an opportunity of hearing to the debtor and creditor within twenty-one days.

Key Landmark Precedents:

Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 436: The Supreme Court highlighted Section 88 as an essential audi alteram partem safeguard, providing creditors with a full opportunity to challenge fraudulent debt waiver claims.
Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: Affirmed that creditor objections under Section 88 maintain transparency and prevent abuse of the indigent fresh start process.

Courtroom Practice & Strategic Litigation Guidance:

Creditors seeking to oppose a fresh start must file objections under Section 88 within 30 days. Produce bank statements, land revenue records, or proof of undisclosed business income to establish that the debtor exceeds the Section 80 threshold.