IBC Amendments 2017 to 2026: Every Change Explained

The Code has been amended seven times by Act of Parliament, most of them preceded by an ordinance. Each round responded to problems seen in practice: promoters returning through the back door, homebuyers left out, delay, and the strain of the pandemic. The 2026 Amendment is the largest, reworking liquidation and adding new processes. This note takes each amendment in order and lists the changes most often tested.

Figure 1: Amendments to the Code, by year

1. 2017 and January 2018: Section 29A

• Instruments. The Insolvency and Bankruptcy Code (Amendment) Ordinance of 23 November 2017, replaced by the Amendment Act of 18 January 2018.
• Section 29A. Made certain persons ineligible to submit resolution plans, including wilful defaulters, holders of non-performing accounts for a year or more who have not cleared overdues, disqualified directors, and persons acting jointly or in concert with them (Topic 38)
• Related changes. The resolution professional must confirm each applicant's eligibility, and the committee must consider feasibility and viability of plans; the same bar was carried into liquidation sales through section 35(1)(f)
• Section 235A. A general punishment, a fine of one lakh rupees extendable to two crore rupees, for contraventions with no specific punishment; substituted in 2026 by a civil penalty.
• Tested in. ArcelorMittal India v Satish Kumar Gupta (2018) and Swiss Ribbons v Union of India (2019)

2. Second Amendment Act, 17 August 2018

• Homebuyers. An Explanation to section 5(8)(f) deemed amounts raised from real estate allottees to have the commercial effect of borrowing, making them financial creditors, represented through authorised representatives (upheld in Pioneer Urban Land, 2019; Topic 8)
• Voting thresholds. The majority for key decisions, including approval of plans and replacement of the resolution professional, was reduced from 75 to 66 per cent, and routine decisions to 51 per cent (Topic 26)
• Section 12A. Withdrawal of an admitted application with the approval of 90 per cent of the committee (Topic 20)
• Section 238A. Applied the Limitation Act to proceedings before the NCLT and NCLAT (B.K. Educational Services, 2018; Topic 18)
• MSMEs. Section 240A relaxed section 29A for promoters of micro, small and medium enterprises who are not wilful defaulters.

3. Amendment Act, 6 August 2019

• Timeline. Section 12 was amended so that the CIRP must be completed within 330 days of the insolvency commencement date, including time spent in litigation (Topic 25)
• Minimum for operational creditors. Section 30(2)(b) now requires the higher of their liquidation value and what they would receive under the waterfall had the plan's value been distributed under section 53 (Topic 41)
• Binding effect. Section 31(1) made an approved plan binding on the Central Government, State Governments and local authorities to which dues are owed, held clarificatory in Ghanashyam Mishra (2021; Topic 42)
• Liquidation decision. An Explanation to section 33(2) allowed the committee to decide on liquidation at any time after its constitution and before preparation of the information memorandum.

Figure 2: Each amendment and its key changes

4. The Two Acts of 2020

• Amendment Act, 13 March 2020. Replacing the Ordinance of 28 December 2019, it inserted section 32A, giving the corporate debtor and its assets immunity from liability for offences committed before the CIRP once a plan is approved and control passes (Topic 46); set a threshold of 100 allottees or 10 per cent of the total for section 7 applications by homebuyers; and protected critical supplies during the moratorium through section 14(2A)
• Second Amendment Act, 23 September 2020. Replacing the Ordinance of 5 June 2020, it inserted section 10A, barring applications under sections 7, 9 and 10 for defaults arising on or after 25 March 2020, for six months extended in all to one year, and section 66(3), protecting directors from wrongful trading claims for that period (Topic 19)
• Tested in. Manish Kumar v Union of India (2021), which upheld both the allottee threshold and section 32A.

5. Amendment Act, 12 August 2021: Pre-pack

Replacing the Ordinance of 4 April 2021, this Act inserted Chapter III-A (sections 54A to 54P), creating a pre-packaged insolvency resolution process for corporate debtors that are MSMEs. It is debtor-initiated, needs approval of 66 per cent of unrelated financial creditors, keeps management with the debtor under the oversight of a resolution professional, and must be completed within 120 days. A minimum default of ten lakh rupees was notified for the process (Topic 84).

6. Amendment Act, 6 April 2026

Figure 3: Main areas changed in 2026

• Commencement. Assent on 6 April 2026 and in force from 26 May 2026, except the provisions on group insolvency, cross-border insolvency, the creditor-initiated process and the Insolvency and Bankruptcy Fund, which await notification.
• New processes. Chapter IV-A (sections 58A to 58K) on the creditor-initiated insolvency resolution process, replacing fast track (Topic 62); Chapter V-A, section 59A on group insolvency (Topic 63); section 240C on cross-border insolvency (Topic 64)
• Initiation and CIRP. Admission under section 7 is mandatory where a default is proved and the application is complete, displacing Vidarbha Industries (2022); withdrawal under section 12A is barred after the first invitation for resolution plans.
• Plans. The dissenting financial creditor's minimum was revised, CCI approval must precede filing of the plan, and a statutory charge no longer makes the State a secured creditor, displacing Rainbow Papers (2022; Topics 41, 43 and 44)
• Liquidation. The committee supervises liquidation (section 21(11)); the IBBI recommends the liquidator, who cannot be the resolution professional (section 34(4)); the CIRP may be restored once for 120 days by 66 per cent (section 33(1A)); dissolution must be sought within 180 days, extendable by 90 (section 54); direct dissolution under section 54(2A) (Topics 53 to 59)
• Avoidance. The look-back now runs from the date of initiation; proceedings survive the end of the CIRP or liquidation (section 26); creditors and members may apply for unreported transactions (section 47) (Topics 47 to 51)
• Penalties. Sections 74 and 76 omitted; new civil penalties under sections 64A, 67B and 67C; section 235A substituted (Topic 76)
• Individuals. No interim moratorium for personal guarantors (sections 96(4) and 124(4)); section 28A on guarantor assets (Topic 66)

7. Frequently Asked Questions

Which amendment reduced the voting threshold for approving a resolution plan to 66 per cent?

The Second Amendment Act of 2018, which reduced it from 75 per cent.

Which amendment made the Limitation Act applicable to the Code?

The Second Amendment Act of 2018 inserted section 238A; B.K. Educational Services (2018) held that it applied from the inception of the Code.

Which parts of the 2026 Amendment are not yet in force?

Group insolvency, cross-border insolvency, the creditor-initiated process and the Insolvency and Bankruptcy Fund, which depend on separate notification.

8. Related Topics

• Topic 1: Introduction to the Code. Background and objectives.
• Topic 95: Statistics and Outcomes. What the Code has delivered.
• Topic 96: Revision Chart. The Code at a glance.