Sections 136 and 137 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 136 and 137 bookend the work of the bankruptcy trustee. Section 136 hands him the job of administering and distributing the estate of the bankrupt under Chapter V. Section 137 deals with the end: a closing meeting of the committee of creditors, a report on the administration, approval of that report within seven days and a decision on whether the trustee should be released. This article reads both sections as printed in the IBBI consolidated text of the Code amended up to 12 August 2021. A trustee or creditor approaching this stage can take a legal consultation to plan the closing steps.
The bankruptcy trustee conducts the administration and distribution of the estate of the bankrupt in accordance with Chapter V. On completion, he convenes a meeting of the committee of creditors and gives it a report of the administration. The committee must approve the report within seven days of receiving it and determine whether the trustee should be released under section 148. The trustee must retain sufficient sums from the estate to meet the expenses of convening and conducting that meeting.
Section 136: the trustee's task
"The bankruptcy trustee shall conduct the administration and distribution of the estate of the bankrupt in accordance with the provisions of Chapter V."
The section is a single sentence, and its effect is to point to Chapter V, "Administration and distribution of the estate of the bankrupt" (sections 149 to 178). The estate vests in the trustee on the bankruptcy order (section 128(1)(a)), and the trustee then administers and distributes it; see our articles on sections 127 and 128 and on estate vesting under section 154. The section adds no duty of its own; the duties are in Chapter V. Examples of what that Chapter contains, each with its own article, are the duties of the bankrupt under section 150 (duties of the bankrupt), the approval of the committee of creditors and distribution under section 153 (committee approval), after-acquired property under section 159 (after-acquired property), proof of debt in sections 171 to 173 (proof of debt) and the order of priority under section 178 (priority of payment).
Section 137: completion of administration
Sub-section (1): closing meeting
"The bankruptcy trustee shall convene a meeting of the committee of creditors on completion of the administration and distribution of the estate of the bankrupt in accordance with the provisions of Chapter V."
The committee is the one established at the first meeting of the creditors under section 134(3)(a); see our article on sections 133 to 135. The trigger is "completion of the administration and distribution". The section does not define completion and prints no period within which the trustee must convene the meeting.
Sub-section (2): the report
"The bankruptcy trustee shall provide the committee of creditors with a report of the administration of the estate of the bankrupt in the meeting of the said committee."
The report is given "in the meeting". The section does not list its contents. It speaks only of a "report of the administration of the estate of the bankrupt", and what it contains is left to the nature of the administration and to any rules or regulations; none on this subject is in the texts consulted.
Sub-section (3): approval and release
"The committee of creditors shall approve the report submitted by the bankruptcy trustee under sub-section (2) within seven days of the receipt of the report and determine whether the bankruptcy trustee should be released under section 148."
Two decisions are put to the committee:
| Decision | Period | Source |
|---|---|---|
| Approve the trustee's report | Within seven days of receipt of the report | Section 137(3) |
| Determine whether the trustee should be released | Together with the approval | Section 137(3), referring to section 148 |
The sub-section says the committee "shall approve" the report within seven days. It does not say what follows if the committee does not approve it, or whether the committee may decline to release the trustee. Section 148 deals with release; the text of that section is not set out in this article.
Sub-section (4): money for the meeting
"The bankruptcy trustee shall retain sufficient sums from the estate of the bankrupt to meet the expenses of convening and conducting the meeting required under this section during the administration of the estate."
The trustee must set aside, during the administration, enough to pay for the closing meeting. The effect is that the estate bears the cost of the meeting. The trustee must therefore plan ahead and not distribute the whole estate before reserving that sum; section 137(4) does not give a figure.
Example. Bankruptcy trustee Mr Arvind Rao has sold the assets of the bankrupt Suman Deshpande, paid the creditors in the order that Chapter V provides and set aside a sum for the closing meeting. He convenes the committee of creditors and presents his report of the administration of the estate. The committee has seven days from receipt of the report to approve it and to decide whether he should be released under section 148. Arvind meets the cost of the meeting from the reserve he retained.
What comes next
When the administration is complete and the trustee is released, the bankrupt's own discharge is dealt with separately. Section 138 provides for the discharge order, which is explained in our article on the bankruptcy discharge order under section 138. Section 127 says the bankruptcy order continues till the debtor is discharged under section 138.
What these sections do not say
- They print no period for the trustee to complete the administration or to convene the meeting.
- They do not list the contents of the report.
- They do not say what happens if the committee does not act within seven days.
The Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 is the regulation set for bankruptcy of personal guarantors; the copy consulted is amended up to 02-06-2026. No rules or regulations on other individuals or on partnership firms are in the texts consulted.
The Amendment Act, 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) does not amend sections 136 or 137 as printed in the texts consulted. It does amend section 178 (section 57 of that Act), the order of priority of payment in the administration; that change is explained in the section 178 article linked above. The Amendment Act, 2026 comes into force on the date or dates the Central Government notifies; the notification is not in the texts consulted, so check whether it has been notified.
Amendments and notifications made after 12 August 2021, other than the Amendment Act, 2026, are not in the texts consulted and should be checked.
Need help closing out a bankruptcy administration?
Closing an administration means a clean report, a reserve for the final meeting and a timely decision by the committee. A legal consultation can help a trustee or a member of the committee check that each of those steps has been taken before the seven-day period starts.
Key takeaways
- The bankruptcy trustee administers and distributes the estate in accordance with Chapter V.
- On completion he convenes a meeting of the committee of creditors and gives it a report of the administration.
- The committee must approve the report within seven days of receiving it and decide whether to release the trustee under section 148.
- The trustee must retain sufficient sums from the estate for the meeting's expenses.
- The bankrupt's discharge is separate, under section 138.
Read next
- Section 138: the bankruptcy discharge order
- Committee approval under section 153 and distribution of property
- Sections 133 to 135: the meeting of creditors in bankruptcy
- The priority of payment of debts under section 178
Disclaimer: Based on the IBBI consolidated text of the Insolvency and Bankruptcy Code, 2016 amended up to 12 August 2021 and on the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026), which comes into force on the date or dates notified by the Central Government, as consulted on 2 October 2026. It explains the words of the statute only; commencement notifications, other amendments made after 12 August 2021, notified thresholds, the rules and IBBI regulations, and the way tribunals and courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.