80. Eligibility for making an application.—(1) A debtor, who is unable to pay his debt and fulfils
the conditions specified in sub-section (2), shall be entitled to make an application for a fresh start for
discharge of his qualifying debt under this Chapter.
(2) A debtor may apply, either personally or through a resolution professional, for a fresh start under
this Chapter in respect of his qualifying debts to the Adjudicating Authority if —
(a) the gross annual income of the debtor does not exceed sixty thousand rupees;
(b) the aggregate value of the assets of the debtor does not exceed twenty thousand rupees;
(c) the aggregate value of the qualifying debts does not exceed thirty-five thousand rupees;
(d) he is not an undischarged bankrupt;
(e) he does not own a dwelling unit, irrespective of whether it is encumbered or not;
(f) a fresh start process, insolvency resolution process or bankruptcy process is not subsisting
against him; and
(g) no previous fresh start order under this Chapter has been made in relation to him in the
preceding twelve months of the date of the application for fresh start.
81. Application for fresh start order.—(1) When an application is filed under section 80 by a
debtor, an interim-moratorium shall commence on the date of filing of said application in relation to all
the debts and shall cease to have effect on the date of admission or rejection of such application, as the
case may be.
(2) During the interim-moratorium period,—
(i) any legal action or legal proceeding pending in respect of any of his debts shall be deemed to
have been stayed; and
(ii) no creditor shall initiate any legal action or proceedings in respect of such debt.
(3) The application under section 80 shall be in such form and manner and accompanied by such fee,
as may be prescribed.
(4) The application under sub-section (3) shall contain the following information supported by an
affidavit, namely:—
(a) a list of all debts owed by the debtor as on the date of the said application along with details
relating to the amount of each debt, interest payable thereon and the names of the creditors to whom
each debt is owed;
(b) the interest payable on the debts and the rate thereof stipulated in the contract;
(c) a list of security held in respect of any of the debts;
(d) the financial information of the debtor and his immediate family up to two years prior to the
date of the application;
(e) the particulars of the debtor’s personal details, as may be prescribed;
(f) the reasons for making the application;
(g) the particulars of any legal proceedings which, to the debtor’s knowledge has been
commenced against him;
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(h) the confirmation that no previous fresh start order under this Chapter has been made in respect
of the qualifying debts of the debtor in the preceding twelve months of the date of the application.
82. Appointment of resolution professional.—(1) Where an application under section 80 is filed by
the debtor through a resolution professional, the Adjudicating Authority shall direct the Board within
seven days of the date of receipt of the application and shall seek confirmation from the Board that there
are no disciplinary proceedings against the resolution professional who has submitted such application.
(2) The Board shall communicate to the Adjudicating Authority in writing either—
(a) confirmation of the appointment of the resolution professional who filed an application under
sub-section (1); or
(b) rejection of the appointment of the resolution professional who filed an application under
sub-section (1) and nominate a resolution professional suitable for the fresh start process.
(3) Where an application under section 80 is filed by the debtor himself and not through the resolution
professional, the Adjudicating Authority shall direct the Board within seven days of the date of the receipt
of an application to nominate a resolution professional for the fresh start process.
(4) The Board shall nominate a resolution professional within ten days of receiving the direction
issued by the Adjudicating Authority under sub-section (3).
(5) The Adjudicating Authority shall by order appoint the resolution professional recommended or
nominated by the Board under sub-section (2) or sub-section (4), as the case may be.
(6) A resolution professional appointed by the Adjudicating Authority under sub-section (5) shall be
provided a copy of the application for fresh start.
83. Examination of application by resolution professional.—(1) The resolution professional shall
examine the application made under section 80 within ten days of his appointment, and submit a report to
the Adjudicating Authority, either recommending acceptance or rejection of the application.
(2) The report referred to in sub-section (1) shall contain the details of the amounts mentioned in the
application which in the opinion of the resolution professional are—
(a) qualifying debts; and
(b) liabilities eligible for discharge under sub-section (3) of section 92.
(3) The resolution professional may call for such further information or explanation in connection
with the application as may be required from the debtor or any other person who, in the opinion of the
resolution professional, may provide such information.
(4) The debtor or any other person, as the case may be, shall furnish such information or explanation
within seven days of receipt of the request under sub-section (3).
(5) The resolution professional shall presume that the debtor is unable to pay his debts at the date of
the application if—
(a) in his opinion the information supplied in the application indicates that the debtor is unable to
pay his debts and he has no reason to believe that the information supplied is incorrect or incomplete;
and
(b) he has reason to believe that there is no change in the financial circumstances of the debtor
since the date of the application enabling the debtor to pay his debts.
(6) The resolution professional shall reject the application, if in his opinion—
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(a) the debtor does not satisfy the conditions specified under section 80; or
(b) the debts disclosed in the application by the debtor are not qualifying debts; or
(c) the debtor has deliberately made a false representation or omission in the application or with
respect to the documents or information submitted.
(7) The resolution professional shall record the reasons for recommending the acceptance or rejection
of the application in the report to the Adjudicating Authority under sub-section (1) and shall give a copy
of the report to the debtor.
84. Admission or rejection of application by Adjudicating Authority.—(1) The Adjudicating
Authority may within fourteen days from the date of submission of the report by the resolution
professional, pass an order either admitting or rejecting the application made under sub-section (1) of
section 81.
(2) The order passed under sub-section (1) accepting the application shall state the amount which has
been accepted as qualifying debts by the resolution professional and other amounts eligible for discharge
under section 92 for the purposes of the fresh start order.
(3) A copy of the order passed by the Adjudicating Authority under sub-section (1) along with a copy
of the application shall be provided to the creditors mentioned in the application within seven days of the
passing of the order.
85. Effect of admission of application.—(1) On the date of admission of the application, the
moratorium period shall commence in respect of all the debts.
(2) During the moratorium period—
(a) any pending legal action or legal proceeding in respect of any debt shall be deemed to have
been stayed; and
(b) subject to the provisions of section 86, the creditors shall not initiate any legal action or
proceedings in respect of any debt.
(3) During the moratorium period, the debtor shall—
(a) not act as a director of any company, or directly or indirectly take part in or be concerned in
the promotion, formation or management of a company;
(b) not dispose of or alienate any of his assets;
(c) inform his business partners that he is undergoing a fresh start process;
(d) be required to inform prior to entering into any financial or commercial transaction of such
value as may be notified by the Central Government, either individually or jointly, that he is
undergoing a fresh start process;
(e) disclose the name under which he enters into business transactions, if it is different from the
name in the application admitted under section 84;
(f) not travel outside India except with the permission of the Adjudicating Authority.
(4) The moratorium ceases to have effect at the end of the period of one hundred and eighty days
beginning with the date of admission unless the order admitting the application is revoked under
sub-section (2) of section 91.
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86. Objections by creditor and their examination by resolution professional.—(1) Any creditor
mentioned in the order of the Adjudicating Authority under section 84 to whom a qualifying debt is owed
may, within a period of ten days from the date of receipt of the order under section 84, object only on the
following grounds, namely:—
(a) inclusion of a debt as a qualifying debt; or
(b) incorrectness of the details of the qualifying debt specified in the order under section 84.
(2) A creditor may file an objection under sub-section (1) by way of an application to the resolution
professional.
(3) The application under sub-section (2) shall be supported by such information and documents as
may be prescribed.
(4) The resolution professional shall consider every objection made under this section.
(5) The resolution professional shall examine the objections under sub-section (2) and either accept or
reject the objections, within ten days of the date of the application.
(6) The resolution professional may examine any matter that appears to him to be relevant to the
making of a final list of qualifying debts for the purposes of section 92.
(7) On the basis of the examination under sub-section (5) or sub-section (6), the resolution
professional shall—
(a) prepare an amended list of qualifying debts for the purpose of the discharge order;
(b) make an application to the Adjudicating Authority for directions under section 90; or
(c) take such other steps as he considers necessary in relation to the debtor.
87. Application against decision of resolution professional.—(1) The debtor or the creditor who is
aggrieved by the action taken by the resolution professional under section 86 may, within ten days of such
decision, make an application to the Adjudicating Authority challenging such action on any of the
following grounds, namely:—
(a) that the resolution professional has not given an opportunity to the debtor or the creditor to
make a representation; or
(b) that the resolution professional colluded with the other party in arriving at the decision; or
(c) that the resolution professional has not complied with the requirements of section 86.
(2) The Adjudicating Authority shall decide the application referred to in sub-section (1) within
fourteen days of such application, and make an order as it deems fit.
(3) Where the application under sub-section (1) has been allowed by the Adjudicating Authority, it
shall forward its order to the Board and the Board may take such action as may be required under Chapter
VI of Part IV against the resolution professional.
88. General duties of debtor.—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
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(ii) any change in financial circumstances after the date of application, where such change has
an impact on the fresh start process.
89. Replacement of resolution professional.—(1) Where the debtor or the creditor is of the opinion
that the resolution professional appointed under section 82 is required to be replaced, he may apply to the
Adjudicating Authority for the replacement of such resolution professional.
(2) The Adjudicating Authority shall within seven days of the receipt of the application under
sub-section (1) make a reference to the Board for replacement of the resolution professional.
(3) The Board shall, within ten days of the receipt of a reference from the Adjudicating Authority
under sub-section (2), recommend the name of an insolvency professional to the Adjudicating Authority
against whom no disciplinary proceedings are pending.
(4) The Adjudicating Authority shall appoint another resolution professional for the purposes of the
fresh start process on the basis of the recommendation by the Board.
(5) The Adjudicating Authority may give directions to the resolution professional replaced under
sub-section (4)—
(a) to share all information with the new resolution professional in respect of the fresh start
process; and
(b) to co-operate with the new resolution professional as may be required.
90. Directions for compliances of restrictions, etc.—(1) The resolution professional may apply to
the Adjudicating Authority for any of the following directions, namely:—
(a) compliance of any restrictions referred to in sub-section (3) of section 85, in case of
non-compliance by the debtor; or
(b) compliance of the duties of the debtor referred to in section 88, in case of non-compliance by
the debtor.
(2) The resolution professional may apply to the Adjudicating Authority for directions in relation to
any other matter under this Chapter for which no specific provisions have been made.
91. Revocation of order admitting application.—(1) The resolution professional may submit an
application to the Adjudicating Authority seeking revocation of its order made under section 84 on the
following grounds, namely :—
(a) if due to any change in the financial circumstances of the debtor, the debtor is ineligible for a
fresh start process; or
(b) non-compliance by the debtor of the restrictions imposed under sub-section (3) of section 85;
or
(c) if the debtor has acted in a mala fide manner and has wilfully failed to comply with the
provisions of this Chapter.
(2) The Adjudicating Authority shall, within fourteen days of the receipt of the application under subsection (1), may by order admit or reject the application.
(3) On passing of the order admitting the application referred to in sub-section (1), the moratorium
and the fresh start process shall cease to have effect.
(4) A copy of the order passed by the Adjudicating Authority under this section shall be provided to
the Board for the purpose of recording an entry in the register referred to in section 196.
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92. Discharge order.—(1) The resolution professional shall prepare a final list of qualifying debts
and submit such list to the Adjudicating Authority at least seven days before the moratorium period
comes to an end.
(2) The Adjudicating Authority shall pass a discharge order at the end of the moratorium period for
discharge of the debtor from the qualifying debts mentioned in the list under sub-section (1).
(3) Without prejudice to the provisions of sub-section (2), the Adjudicating Authority shall discharge
the debtor from the following liabilities, namely:—
(a) penalties in respect of the qualifying debts from the date of application till the date of the
discharge order;
(b) interest including penal interest in respect of the qualifying debts from the date of application
till the date of the discharge order; and
(c) any other sums owed under any contract in respect of the qualifying debts from the date of
application till the date of the discharge order.
(4) The discharge order shall not discharge the debtor from any debt not included in sub-section (2)
and from any liability not included under sub-section (3).
(5) The discharge order shall be forwarded to the Board for the purpose of recording an entry in the
register referred to in section 196.
(6) A discharge order under sub-section (2) shall not discharge any other person from any liability in
respect of the qualifying debts.
93. Standard of conduct.—The resolution professional shall perform his functions and duties in
compliance with the code of conduct provided under section 208.