Corporate and Economic Laws · Insolvency and Bankruptcy Code, 2016

Corporate Insolvency Resolution Process (CIRP) under IBC

Updated 11 October 2026 · Fact-checked

CIRP is the time-bound process under the Insolvency and Bankruptcy Code, 2016 for resolving a defaulting company. A financial creditor (Section 7), an operational creditor (Section 9) or the company itself (Section 10) applies to the Adjudicating Authority. CIRP starts on the date the application is admitted.

Understand Corporate Insolvency Resolution Process (CIRP)

The corporate insolvency resolution process (CIRP) is the route the Code gives for rescuing a company that has defaulted. Instead of each creditor chasing the company separately, one collective process starts. The aim is to find a resolution plan, not to sell the company at once.

Three persons can start it. A financial creditor (such as a bank) applies under Section 7. An operational creditor (such as a supplier) applies under Section 9. The corporate applicant, meaning the company itself, applies under Section 10. All applications go to the Adjudicating Authority.

The key trigger is default. Under Section 7, the Explanation says a default includes a default on a financial debt owed not only to the applicant but to any other financial creditor of the corporate debtor. So a bank can apply even if the default was to another lender.

The process commences from the date of admission of the application. It does not start on the date of filing. This is a common objective-question point, and it appears in Sections 7(6), 9(6) and 10(5).

The Adjudicating Authority decides in each case whether to admit or reject. If it rejects for a defect, it must first give the applicant notice to rectify the defect within seven days of receiving that notice. After admission, an interim resolution professional takes charge and a moratorium follows. The moratorium and the 180/330-day timeline are not in the sections supplied here, so learn them from your study material and state them without section numbers.

Key rules to remember

Section 7: financial creditor: Financial creditor (alone or jointly) → application to Adjudicating Authority when default has occurred; The financial creditor must furnish record of default from an information utility or other specified evidence, and the name of the proposed interim resolution professional.
Section 7: decision timing: Within 14 days of receipt of application, the Adjudicating Authority ascertains whether default exists; then admits or rejects under Section 7(5); order communicated within 7 days of admission or rejection; Section 7(4) gives 14 days to ascertain the existence of default. If the Adjudicating Authority has not ascertained default and also passed an order under Section 7(5) within that time, it must record its reasons in writing.
Section 7: special classes: Joint application by not less than 100 creditors of the same class or 10% of such creditors in the class, whichever is less; The same test applies to allottees under the same real estate project. It applies to classes covered by Section 21(6A)(a) and (b).
Section 9: operational creditor: Demand notice or invoice → wait 10 days from delivery → if no payment and no notice of dispute → apply; The operational creditor must file an affidavit that no notice of dispute has been given by the corporate debtor.
Section 9: admission and rejection: Admit if application complete, no payment, notice delivered, no dispute, no disciplinary proceeding pending; otherwise reject; Under Section 9(5) the order must be passed within 14 days of receipt of the application. Before rejecting for incompleteness, give 7 days to rectify.
Section 10: corporate applicant: Corporate debtor has committed default → corporate applicant files; admit or reject by order within 14 days of receipt (Section 10(4)); Must furnish books of account, proposed IRP and a special resolution of shareholders (or resolution of at least three-fourths of partners) approving the filing. Before rejecting, the Adjudicating Authority must give 7 days' notice to rectify.
Commencement: CIRP commences from date of admission of application; Sections 7(6), 9(6) and 10(5).

How to solve Corporate Insolvency Resolution Process (CIRP) questions

Use this order for any case question on starting CIRP.

1Identify who is applying: financial creditor, operational creditor or the company itself. This fixes the section: 7, 9 or 10.
2Check the trigger: has a default occurred? For an operational creditor, was a demand notice or invoice delivered and did 10 days pass?
3For an operational creditor, check whether the debtor sent a notice of dispute. A genuine dispute leads to rejection.
4List the documents required for that applicant, such as record of default, affidavit, proposed IRP and special resolution.
5Check for defects: incomplete application or a disciplinary proceeding pending against the proposed professional.
6State the Adjudicating Authority's decision: admit or reject. For a curable defect, say a 7-day notice to rectify is given first.
7State the consequence: CIRP commences on the date of admission, an IRP is appointed and the moratorium follows.
8Conclude with a clear answer applying the facts.

Quickest way: Three-section comparison grid

When to use it: Use for MCQs and short notes that ask you to compare Sections 7, 9 and 10.

Write three columns: S.7 financial creditor, S.9 operational creditor, S.10 corporate applicant.
Trigger: S.7 default; S.9 unpaid debt after 10 days of demand with no dispute; S.10 default by the company.
Special proof: S.7 information utility record; S.9 affidavit of no dispute; S.10 special resolution and books of account.
Timing: under S.7(4) the Adjudicating Authority has 14 days to ascertain default. If it has not ascertained default and passed an order under S.7(5) within that time, it must record its reasons in writing. Under S.9(5) and S.10(4) the 14 days is for the admit or reject order.
Rectification: a 7-day notice to rectify must be given before rejection. Under S.7 the proviso covers any rejection under clause (b) of S.7(5). Under S.9(5) it applies before rejecting for incompleteness (clause (ii)(a)). Under S.10(4) it applies before rejecting the application, whether for incompleteness or a pending disciplinary proceeding against the proposed professional.
Commencement: date of admission in all three.

Common mistakes in Corporate Insolvency Resolution Process (CIRP)

Saying CIRP starts when the application is filed.
Students link the start to the creditor's action.
Fix: Remember the sections say CIRP commences from the date of admission by the Adjudicating Authority.
Mixing up the 10-day period in Section 9 with the 14-day period for the order.
Both numbers appear in the same section.
Fix: 10 days is the wait after the demand notice or invoice is delivered. 14 days is the time for the Adjudicating Authority to decide after receiving the application.
Allowing an operational creditor to apply despite a notice of dispute.
Students focus only on non-payment.
Fix: Under Section 9 a notice of dispute, or a record of dispute in the information utility, is a ground for rejection. The creditor must also file an affidavit that no dispute notice was given.
Thinking a financial creditor can apply only for default owed to itself.
Students assume the default must be personal.
Fix: The Explanation to Section 7(1) says default includes default on a financial debt owed to any other financial creditor.
Forgetting the special resolution requirement in Section 10.
Students treat the company's own filing as a board matter.
Fix: Section 10(3)(c) requires a special resolution of shareholders, or a resolution of at least three-fourths of partners, approving the filing.
Rejecting a defective application straight away.
Students overlook the proviso.
Fix: Under Section 7, before rejecting under Section 7(5)(b), the Adjudicating Authority must give the applicant notice to rectify the defect within seven days of receiving the notice. Under Section 9(5)(ii)(a), the notice is required before rejecting for incompleteness. Under Section 10(4), the notice is required before rejecting the application, whether for incompleteness or a pending disciplinary proceeding against the proposed professional.

Worked examples

Example 1

Sunrise Steels Ltd. owes ₹8,00,000 to Kaveri Traders for goods supplied. Kaveri Traders delivered an invoice demanding payment on 1 March. Sunrise has neither paid nor sent any notice of dispute, and on 15 March Kaveri Traders wishes to file for CIRP. Can it do so, and under which section?

Show the solution

Kaveri Traders supplied goods, so it is an operational creditor. The relevant section is Section 9.
The invoice demanding payment was delivered on 1 March. Section 9(1) allows an application only after the expiry of 10 days from the date of delivery.
Count the 10 days from the day after delivery (the day of delivery is excluded). They run from 2 March to 11 March, so the period expires at the end of 11 March and filing is possible from 12 March.
The proposed filing date, 15 March, is after the period has expired.
Sunrise has neither paid nor given a notice of dispute, so the condition in Section 9(1) is met on the date of filing.
Kaveri Traders must file the application with an affidavit that no notice of dispute has been given, plus a copy of the invoice or demand notice. It may propose an interim resolution professional.

Answer: Yes. Kaveri Traders, as an operational creditor, may apply under Section 9 on 15 March. The Adjudicating Authority will decide within 14 days of receiving the application, and CIRP starts on the date of admission.

Example 2

The Adjudicating Authority receives a Section 7 application from a bank. The application is incomplete because a required document is missing. Explain what the Adjudicating Authority must do and when CIRP would start.

Show the solution

Under Section 7(5)(b), the Adjudicating Authority may reject an application that is incomplete (or where default has not occurred or a disciplinary proceeding is pending against the proposed professional).
The proviso requires it to give the applicant notice to rectify the defect before rejecting under clause (b).
The applicant has seven days from receipt of that notice to rectify the defect.
If the bank rectifies the defect and the Adjudicating Authority is satisfied that default has occurred, the application is complete and there is no disciplinary proceeding pending against the proposed professional, it may admit the application under Section 7(5)(a).
Under Section 7(6), CIRP commences from the date of admission, not from the original filing date.

Answer: The Adjudicating Authority must first give the bank a notice to rectify within seven days. If the defect is cured and other conditions are met, it may admit the application, and CIRP commences from the date of admission. If not cured, it may reject.

Exam tips

Learn the 7/9/10 comparison in a grid. Questions often ask who can apply, what proof they must give and what ends in rejection.
In MCQs, watch the numbers: 10 days (Section 9 wait), 14 days (decision), 7 days (rectification and communication of order).
In case questions, name the creditor type first. The section follows from that.
Write that CIRP commences on admission. Examiners look for this point.
For moratorium and the 180/330-day timeline, write the rule in plain words from your study material, and do not attach a section number you are unsure of.

Practice questions from Insolvency and Bankruptcy Code, 2016

Corporate Insolvency Resolution Process (CIRP) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Corporate Insolvency Resolution Process (CIRP): frequently asked questions

What is the difference between Section 7, Section 9 and Section 10 of the IBC?

Section 7 lets a financial creditor apply when a default has occurred. Section 9 lets an operational creditor apply after a demand notice or invoice has gone unpaid for 10 days with no notice of dispute. Section 10 lets the corporate debtor's own corporate applicant apply after a default, backed by a special resolution.

When does CIRP commence?

CIRP commences from the date the Adjudicating Authority admits the application. Sections 7(6), 9(6) and 10(5) all say this. Filing the application alone does not start the process.

Can the Adjudicating Authority reject an application without giving a chance to fix it?

Not where the provisos apply. Under Section 7, before rejecting under clause (b) of Section 7(5), which covers no default, an incomplete application or a pending disciplinary proceeding, it must give the applicant notice to rectify the defect within seven days of receiving the notice. Under Section 9(5)(ii)(a), the notice is required before rejecting for incompleteness. Under Section 10(4), it is required before rejecting the application, whether for incompleteness or a pending disciplinary proceeding against the proposed professional.

What is the CIRP timeline of 330 days?

The Code sets an outer limit for completing CIRP, including extensions and legal proceedings. This limit is 330 days. The sections supplied for this page do not cover it, so study the provision on timelines in your study material and state it in plain words.