Insolvency and Bankruptcy - Law and Practice · Introduction to Insolvency and Bankruptcy Code

Institutional Framework under the Insolvency and Bankruptcy Code

Updated 11 October 2026 · Fact-checked

The institutional framework under the IBC is the set of bodies that run insolvency law: the Adjudicating Authority (NCLT for corporate persons, DRT for individuals and firms), the Insolvency and Bankruptcy Board of India as regulator, insolvency professionals and their agencies, information utilities, and appellate authorities. To answer questions, match each body to its role.

Understand Institutional Framework under the IBC

The IBC does not work by itself. It needs bodies that decide, regulate, keep records and hear appeals. Think of it as four layers: a decider, a regulator, data and service providers, and an appeal ladder.

The Adjudicating Authority is the decider. For corporate persons it is the National Company Law Tribunal (NCLT). For individuals and partnership firms it is the Debt Recovery Tribunal (DRT). It admits applications, passes orders such as moratorium, approves resolution plans and orders liquidation. Check the Code's definitions and Part references for the exact allocation when you write.

The Insolvency and Bankruptcy Board of India (IBBI), called the Board in the Code, is the regulator. Under section 196 it works subject to the general direction of the Central Government. It registers insolvency professional agencies, insolvency professionals and information utilities, and can renew, withdraw, suspend or cancel those registrations. It specifies eligibility and standards by regulations, levies fees, inspects, investigates, monitors, calls for information and records, issues guidelines, handles grievances and makes regulations and guidelines on insolvency matters. It also maintains records of insolvency and bankruptcy cases and disseminates information on them.

Insolvency professional agencies enrol and regulate insolvency professionals, and the Board may make model bye-laws for them. Information utilities store and give access to financial information about debtors. The Board specifies by regulations how they collect and store data and give access to it. Because this data records default, it helps the Adjudicating Authority verify debt and default.

Finally, the appeal ladder: orders of the NCLT go to the National Company Law Appellate Tribunal (NCLAT), and from there on questions of law to the Supreme Court. Appeals from the DRT go to the Debt Recovery Appellate Tribunal. Study the sections on appeals alongside this topic.

Key rules to remember

Adjudicating Authority split: Corporate persons → NCLT; individuals and partnership firms → DRT; Use this as the first line of any answer on who decides.
Board's registration function (s 196(1)(a)): Board registers IPAs, IPs and information utilities; can renew, withdraw, suspend or cancel; Registration is the Board's core power over service providers.
Board's regulatory functions (s 196(1)(b), (d), (e)): Specify eligibility, standards for functioning, and minimum curriculum for IP examination; Standards and eligibility are set by regulations.
Board's supervisory functions (s 196(1)(f), (g), (h)): Inspect, investigate, monitor, issue directions, call for information and records; Pair these with sections 217 to 219 on complaints and investigation.
Civil court powers (s 196(3)): Discovery and production of documents; summoning and examining on oath; inspection of books; commissions; Same powers as a civil court trying a suit under the Code of Civil Procedure, 1908.
Complaint to investigation to show cause: Complaint (s 217) → investigation order (s 218) → show cause notice (s 219); Board may also act on reasonable grounds to believe there is a contravention.
Model bye-laws (s 196(2)): Board may make model bye-laws for IPAs covering competence, ethics, enrolment, grievances, discipline; Enrolment requirements must be non-discriminatory.

How to solve Institutional Framework under the IBC questions

Use this method for any question on the institutions under the IBC, whether it asks for powers, roles or a case-based issue.

1Identify the institution the facts point to: Adjudicating Authority, Board, IPA, IP, information utility or appellate body.
2State its role in one sentence, naming the Code provision if you are certain of it.
3List the relevant powers or functions, grouped under headings such as registration, regulation, supervision and data.
4Apply them to the facts: who must act, who can complain, and to whom.
5Check the forum: NCLT for corporate persons, DRT for individuals and firms, then the appeal route.
6Conclude with a clear answer and, where practical, the compliance or drafting step, such as filing a complaint or reply to a show cause notice.

Quickest way: Who-does-what grid

When to use it: When time is short and the question asks you to describe or compare institutions.

Write four labels: Decide, Regulate, Record, Appeal.
Place NCLT/DRT under Decide, the Board under Regulate, information utilities under Record, NCLAT and the Supreme Court under Appeal.
Add two or three points under each, using section 196 for the Board.
Close with one line on how the bodies connect, such as the Board registering IPs who then run cases before the Adjudicating Authority.

Common mistakes in Institutional Framework under the IBC

Saying the Board is an adjudicating body that decides insolvency applications.
Students see 'Board' and assume it hears cases.
Fix: The Board regulates and supervises. Admission, moratorium and plan approval are done by the Adjudicating Authority.
Sending an individual debtor's matter to the NCLT.
NCLT is the most familiar forum from corporate cases.
Fix: Individuals and partnership firms go to the DRT. Corporate persons go to the NCLT.
Treating the Board as fully independent of Government.
Students remember it as a regulator and skip the opening words of section 196.
Fix: Write that it performs its functions subject to the general direction of the Central Government.
Confusing information utilities with insolvency professional agencies.
Both are registered by the Board and have similar names.
Fix: Information utilities hold and give access to financial data. Agencies enrol and regulate insolvency professionals.
Mixing up the steps from complaint to penalty.
Sections 217, 218 and 219 are close together.
Fix: Remember the order: complaint, investigation by an investigating authority, then show cause notice after the inspection or investigation.
Quoting section numbers from memory that are not certain.
Students try to look precise.
Fix: Quote only sections you are sure of, such as 196, 217, 218 and 219, and otherwise state the rule in words.

Worked examples

Example 1

Explain the powers and functions of the Insolvency and Bankruptcy Board of India under the Code.

Show the solution

State the source and control: section 196 lists the functions, which the Board performs subject to the general direction of the Central Government.
Registration: it registers insolvency professional agencies, insolvency professionals and information utilities, and may renew, withdraw, suspend or cancel registration.
Regulation: it specifies eligibility, standards for functioning, and the minimum curriculum for the IP examination, and makes regulations and guidelines.
Supervision: it inspects, investigates, monitors, calls for information and records, and redresses grievances against IPs, IPAs and information utilities.
Information role: it collects and maintains records of insolvency and bankruptcy cases and disseminates information, and maintains websites.
Model bye-laws: it may make model bye-laws for IPAs on competence, ethics, enrolment, discipline and grievance redressal.
Powers of a civil court: for discovery and production of documents, summoning and examining on oath, inspection of books and issuing commissions.

Answer: The Board is the regulator of the insolvency ecosystem. It registers, regulates, supervises and disciplines IPAs, IPs and information utilities, makes regulations, keeps records, and has civil court powers in specified matters, all subject to the general direction of the Central Government.

Example 2

A complaint is filed with the Board by a creditor alleging that a registered insolvency professional has breached the Code. Describe the procedure the Board may follow.

Show the solution

Complaint: any person aggrieved by the functioning of an insolvency professional may complain to the Board in the specified form, time and manner (section 217).
Investigation: on receiving a complaint, or if it has reasonable grounds to believe there is a contravention, the Board may by written order direct a person to act as investigating authority (section 218).
Conduct: the investigation is carried out within the time and manner specified by regulations. The authority may require other persons holding relevant documents to furnish them, after giving detailed reasons.
Search and seizure: it may enter places and seize documents, subject to section 100 of the Code of Criminal Procedure, 1973 as applicable, and must return them after the investigation.
Report: it submits a detailed report to the Board.
Show cause: on completing the inspection or investigation, the Board may issue a show cause notice giving time for reply as specified by regulations (section 219).

Answer: The Board receives the complaint, orders an investigation, receives the investigating authority's detailed report and may then issue a show cause notice to the insolvency professional, who must reply within the time given.

Exam tips

Begin answers on institutions by naming the forum: NCLT for corporate persons, DRT for individuals and firms.
For the Board, group the section 196 functions under registration, regulation, supervision and information. This earns structure marks.
In case-based questions, state the provision, apply it to the facts, then conclude with the practical step such as a complaint or reply.
Draw a short flow of complaint, investigation, report and show cause notice. It is easy to write and hard to get wrong.
Do not give section numbers unless you are certain. Use words for the rest.

Practice questions from Introduction to Insolvency and Bankruptcy Code

Institutional Framework under the IBC: frequently asked questions

Which body is the Adjudicating Authority under the IBC?

For corporate persons it is the NCLT. For individuals and partnership firms it is the DRT. It decides applications and passes orders in the process.

What does the Insolvency and Bankruptcy Board of India do?

It is the regulator. It registers and supervises insolvency professional agencies, insolvency professionals and information utilities, makes regulations and guidelines, and keeps records of cases. It acts subject to the general direction of the Central Government.

What is an information utility?

It is an entity registered with the Board that stores financial information about debtors and gives access to it. The Board specifies by regulations how data is collected, stored and accessed.

Can the Board investigate an insolvency professional on its own?

Yes. It may act on a complaint or where it has reasonable grounds to believe there is a contravention of the Code, rules, regulations or its directions. It does this by ordering an investigating authority in writing.