Corporate Restructuring, Valuation and Insolvency · Role, Functions and Duties of IP, IRP and RP

Liquidator and Bankruptcy Trustee: Roles and Duties under IBC

Updated 11 October 2026 · Fact-checked

A liquidator runs the liquidation of a corporate debtor: he takes control of assets, verifies claims, sells property and distributes proceeds under Section 35. A bankruptcy trustee administers the estate of an individual bankrupt. Under Section 150, the bankrupt must assist the trustee, give information, attend when required and report new property or income within seven days.

Understand Liquidator and Bankruptcy Trustee: Roles and Duties

The Insolvency and Bankruptcy Code, 2016 uses insolvency professionals (IPs) at every stage. The title changes with the process. In a corporate insolvency resolution process you meet the interim resolution professional and the resolution professional. If the company goes into liquidation, a liquidator takes over. In individual bankruptcy, the bankruptcy trustee takes over.

The liquidator's job is to wind up a corporate debtor in an orderly way and turn its assets into money for creditors. Section 35(1) lists the powers and duties, and they work subject to the directions of the Adjudicating Authority. The resolution professional, by contrast, tries to keep the company running and find a resolution plan (Section 23). The liquidator is closing the company, not saving it.

The bankruptcy trustee does the same kind of job for an individual or a firm's partner who has been declared bankrupt. He takes charge of the bankrupt's estate and deals with creditors. For this to work he needs the bankrupt's cooperation. Section 150 therefore places duties on the bankrupt.

All of them are insolvency professionals. So the code of conduct in Section 208(2) applies to each: reasonable care and diligence, compliance with the bye-laws of the insolvency professional agency, allowing the agency to inspect records, and submitting copies of records of proceedings before the Adjudicating Authority to the Board and the agency.

The Insolvency Professionals Regulations also cap workload. An IP who is not an insolvency professional entity cannot hold more than ten assignments in aggregate as IRP, RP and liquidator, and not more than three of them can have admitted claims above ₹1,000 crore each (Regulation 7B).

Key rules to remember

Duties of the bankrupt (Section 150(1)): Give information of affairs + attend on trustee when required + give notice of post-commencement events + do other prescribed things; The events to notify, arising after the bankruptcy commencement date, are acquisition of property, devolution of property and increase in income.
Time limit for notice (Section 150(2)): Notice of increase in income, acquisition or devolution of property within 7 days; The seven days run from the increase, acquisition or devolution.
Duties after discharge (Section 150(3)): After discharge under Section 138, duties continue except the Section 150(1)(c) notice duty; Information, attendance and prescribed duties continue. The notice duty for new property and income ends.
Liquidator's core powers (Section 35(1)): Verify claims; take custody of assets; value assets and report; protect assets; carry on business if needed; sell property; investigate undervalued or preferential transactions; distribute proceeds; All subject to directions of the Adjudicating Authority. Sale must be subject to Section 52, and not to a person ineligible to be a resolution applicant.
Consultation (Section 35(2)): Liquidator may consult stakeholders entitled under Section 53; consultation is not binding; Records of consultation must be made available to other stakeholders not consulted, in the manner the Board specifies.
IP assignment cap (Regulation 7B): Maximum 10 assignments in aggregate; maximum 3 with admitted claims above ₹1,000 crore each; Applies to an IP who is not an insolvency professional entity. Counts IRP, RP and liquidator assignments.

How to solve Liquidator and Bankruptcy Trustee: Roles and Duties questions

Most questions give you a fact pattern and ask who must do what, or whether a person has breached a duty. Use this order.

1Identify the process: liquidation of a corporate debtor, or bankruptcy of an individual. This tells you whether the role is liquidator or bankruptcy trustee.
2Name the office holder and the section that governs it: Section 35 for the liquidator, Section 150 for the bankrupt's duties to the trustee, Section 23 for the RP.
3List the facts that matter: dates, kind of event (property, income, inheritance), whether discharge has occurred.
4State the rule in plain words, with the exact condition, such as the seven-day limit or the post-discharge exception.
5Apply the rule fact by fact. Check the timing against the seven days or the discharge date.
6Add the code of conduct point under Section 208(2) or the assignment cap if the facts mention workload or records.
7Close with a one-line conclusion that answers the question asked.

Quickest way: Role-and-trigger check

When to use it: Use it for short-answer or case questions with limited time, when you must decide a duty or role quickly.

Ask: company or individual? Company means liquidator; individual means trustee.
For a liquidator question, pick the matching Section 35(1) clause: claims, custody, valuation, sale, investigation, distribution.
For a bankrupt question, ask: is it information, attendance, or a new event? If a new event, check seven days.
Ask: has discharge under Section 138 happened? If yes, drop the notice duty for new property or income but keep the rest.
Write the conclusion with the section number.

Common mistakes in Liquidator and Bankruptcy Trustee: Roles and Duties

Saying the bankrupt must notify the trustee of new property forever, even after discharge.
Students remember that duties continue after discharge and forget the exception.
Fix: Section 150(3) keeps the duties but excludes clause (c), the notice of acquisition, devolution or increase in income.
Writing that notice of new income must be given within 30 days or 'immediately'.
Mixing it up with time limits elsewhere in the Code.
Fix: Section 150(2) says within seven days of the increase, acquisition or devolution.
Treating the liquidator like the resolution professional who keeps the company running.
Both are IPs and both may carry on business.
Fix: The RP conducts the CIRP and manages operations under Section 23. The liquidator may carry on business only as he considers necessary for beneficial liquidation (Section 35(1)(e)).
Saying the liquidator must follow stakeholders' views after consulting them.
Confusion with binding voting by the committee of creditors.
Fix: Under Section 35(2), consultation is not binding. Records of it must be made available to stakeholders not consulted.
Claiming the liquidator can sell assets to anyone who offers the best price.
Focus on maximising value and ignoring the proviso.
Fix: The liquidator cannot sell to a person who is not eligible to be a resolution applicant, and sale is subject to Section 52.
Forgetting the liquidator's powers are subject to the Adjudicating Authority's directions.
The list of powers looks absolute.
Fix: Begin your answer with: subject to the directions of the Adjudicating Authority, the liquidator may...

Worked examples

Example 1

Rakesh Menon is declared bankrupt. Forty days after the bankruptcy commencement date, he inherits a flat from his uncle. He tells the bankruptcy trustee only after two months from inheriting. Advise on his position under Section 150.

Show the solution

Rule: under Section 150(1)(c)(ii), the bankrupt must notify the trustee of devolution of any property upon him after the bankruptcy commencement date.
Under Section 150(2), the notice must be given within seven days of the devolution.
Facts: the inheritance happened after commencement, so it is a notifiable event. Rakesh gave notice after about two months, far beyond seven days.
He has therefore not complied with his duty to assist the trustee under Section 150.

Answer: Rakesh breached Section 150. Inheritance is devolution of property after commencement, and notice was due within seven days of the devolution. Notice after two months is late.

Example 2

Neha Kapoor was bankrupt and has been discharged under Section 138. After discharge she receives a salary increase and does not tell the trustee. Later the trustee asks her for details of her affairs and to attend his office. Is she bound to comply with either request?

Show the solution

Rule: under Section 150(3), the duties in Section 150(1) continue after discharge, except the duties under clause (c).
The salary increase falls under clause (c)(iii), increase in income. That notice duty does not continue after discharge, so non-disclosure of the increase is not a breach.
The trustee's requests for information of her affairs and for attendance fall under clauses (a) and (b). These continue after discharge.
So she must comply with the information and attendance requests.

Answer: Neha did not breach Section 150 by keeping quiet about the post-discharge salary increase, because clause (c) duties end on discharge. She remains bound to give information and attend on the trustee when required.

Exam tips

Quote Section 150(1)(a) to (d) in order, then the seven-day limit and the discharge exception. This earns most of the marks for the bankrupt's duties.
In liquidator questions, group Section 35(1) powers under heads: claims, assets, sale, investigation, distribution, legal proceedings. Heads make a long list easy to read.
Use a comparison table in your own answer sheet only if asked for differences. Cover purpose, governing section and effect on business: RP rehabilitates, liquidator winds up.
Link the answer to Section 208(2) code of conduct when the question is about the IP's professional obligations.
In case-based questions, always give provision, application to facts and conclusion in that order.

Practice questions from Role, Functions and Duties of IP, IRP and RP

Liquidator and Bankruptcy Trustee: Roles and Duties: frequently asked questions

What does Section 150 IBC require from a bankrupt?

The bankrupt must give the trustee information of his affairs, attend on the trustee when required, and notify the trustee of acquisition or devolution of property or an increase in income after the bankruptcy commencement date. He must also do other prescribed things. Notice of the new event must be given within seven days.

Do the bankrupt's duties end on discharge?

Not entirely. Under Section 150(3), the duties continue after discharge under Section 138, except the duty to notify the trustee of new property, inherited property or higher income under clause (c).

What is the difference between a liquidator and a resolution professional?

The resolution professional conducts the corporate insolvency resolution process and manages the company's operations, aiming at a resolution plan. The liquidator takes over when the company is to be wound up. He takes custody of assets, verifies claims, sells property and distributes proceeds under Section 35.

Can the liquidator carry on the company's business?

Yes, but only to the extent he considers necessary for the beneficial liquidation of the corporate debtor. This is a power under Section 35(1)(e), subject to the directions of the Adjudicating Authority.