MCA Notifies 26.05.2026 As The Date On Which Certain Provisions Of The Insolvency And Bankruptcy Code (Amendment) Act, 2026 Shall Come Into Force

The Ministry of Corporate Affairs (“MCA”), vide notification dated 22.05.2026, has notified 26.05.2026 as the date on which certain provisions of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (“IBC Amendment Act”) shall come into force.¹

The following provisions of the IBC Amendment Act have come into force, with effect from 26.05.2026:

1. Sections 2 to 6 (both inclusive);
2. Sections 8 to 33 (both inclusive);
3. sub-clause (iii) of clause (a) and clause (b) of Section 34;
4. Sections 35 to 39 (both inclusive);
5. Section 41;
6. Sections 43 to 44 (both inclusive);
7. Section 46;
8. Sections 48 to 59 (both inclusive);
9. Sections 61 to 66 (both inclusive);
10. Section 68;
11. clause (a) of Section 69;
12. clause (a) of Section 70;
13. sub-clause (i) to sub-clause (xxvi) of clause (b) of Section 70 [Except sub-clause (xx) of clause (b) of Section 70];
14. Section 72.

The key changes brought into force include:

1. Creditor-initiated insolvency resolution process: A new creditor-initiated resolution mechanism has been introduced, permitting specified financial creditors to trigger a resolution process against eligible corporate debtors as an alternative to the conventional process under Sections 7, 9 and 10 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).
2. Admission of applications: Section 7(5) of the IBC has been substituted to provide that, once a default and a complete application are established, no other ground may be considered for rejecting the application, reinforcing mandatory, time-bound admission.
3. Withdrawal and committee oversight: Section 12A (withdrawal of admitted applications) has been substituted to permit withdrawal with 90% committee of creditors approval. However, such withdrawal is barred once the resolution plan invitation has been issued.
4. CIRP and liquidation timelines and revival: Section 33 of the IBC now allows the committee of creditors (by 66% vote) to seek a one-time restoration of a stalled resolution process, for up to one hundred and twenty days, before a liquidation order is passed; and separately requires the adjudicating authority to pass any liquidation order within thirty days.
5. Avoidance and wrongful trading proceedings: It has been clarified under Section 26 of the IBC that the conclusion of the resolution or liquidation does not affect the continuation of avoidance transaction, fraudulent or wrongful trading and applications filed in respect of the above would continue irrespective of the completion of the corporate insolvency resolution process or the liquidation process.
6. Penalties and institutional reforms: New sections 64A and 183A under the IBC allow the adjudicating authority to impose a penalty of not less than INR 1 lakh, extending to INR 2 crore, for frivolous or vexatious proceedings under Parts II and III of the IBC.

Footnote

^{1 MCA Notification dated 22.05.2026 under Section 1(2) of the Insolvency and Bankruptcy Code (Amendment) Act, 2026.}

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