Sections 143 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 143 to 145 deal with the person who runs a bankruptcy. Section 143 binds the bankruptcy trustee to the code of conduct under section 208. Section 144 says how his fees are fixed and paid. Section 145 lets the committee of creditors replace him, by a vote of seventy-five per cent. of voting share, through the Adjudicating Authority and the Board.
The article follows the IBBI consolidated text of the Code amended up to 12 August 2021 (the "consolidated text").
The bankruptcy trustee must act in compliance with the code of conduct under section 208. His fees are such as may be specified, in proportion to the value of the estate, and are paid from distribution of the estate as provided in section 178. To replace him, the committee of creditors votes by seventy-five per cent. of voting share, applies to the Adjudicating Authority, and a replacement recommended by the Board is appointed within the fixed time limits below.
Section 143: standard of conduct
The section is one sentence: "The bankruptcy trustee shall perform his functions and duties in compliance with the code of conduct provided under section 208." A bankruptcy trustee is the insolvency professional appointed as trustee for the estate of the bankrupt under section 125 (section 79(9)). The code of conduct itself lives in section 208; see the live post on the statutory code of conduct for every insolvency professional. The Amendment Act, 2026 (No. 6 of 2026) amends section 208 by its section 60; that change is not explained here. Section 143 has nothing beyond that single sentence: it makes compliance with the code of conduct a duty that the Code itself places on the bankruptcy trustee.
Section 144: fees of the bankruptcy trustee
Sub-section (1). A bankruptcy trustee "appointed for conducting the bankruptcy process shall charge such fees as may be specified in proportion to the value of the estate of the bankrupt". Two features stand out: the fees are "as may be specified", so the amount or scale is not in the section, and they are "in proportion to the value of the estate". What has been specified must be checked in the instrument in force.
Sub-section (2). The fees "shall be paid to the bankruptcy trustee from the distribution of the estate of the bankrupt in the manner provided in section 178". Section 178 sets the order of payment; its clause (a) puts the costs and expenses incurred by the bankruptcy trustee for the bankruptcy process, in full, first. The live post on the priority of payment of debts under section 178 explains that order, and section 57 of the Amendment Act, 2026 amends section 178 (an Explanation to clause (1)(d)); this article does not explain that change. If you need to test a trustee's fee claim against these provisions, a legal consultation can help you read the text against the fact pattern.
Section 145: replacement of the bankruptcy trustee
The section runs to ten sub-sections. Read in order, it is a sequence with fixed time limits.
| Step | Sub-section | Who | What | Time |
|---|---|---|---|---|
| 1 | (1), (2) | Committee of creditors | Forms the view that the trustee appointed under section 125 should be replaced; at a meeting, by a vote of seventy-five per cent. of voting share, proposes a replacement | At any time during the bankruptcy process |
| 2 | (3) | Committee of creditors | Applies to the Adjudicating Authority for replacement | Not stated |
| 3 | (4) | Adjudicating Authority | Directs the Board to recommend a replacement | Within seven days of receipt of the application |
| 4 | (5) | Board | Recommends a bankruptcy trustee against whom no disciplinary proceedings are pending | Within ten days of the direction |
| 5 | (6) | Adjudicating Authority | Appoints the trustee recommended by the Board, by an order | Within fourteen days of receiving the recommendation |
| 6 | (7) | Earlier trustee | Delivers possession of the estate to the new trustee | On the date of the new appointment |
| 7 | (8) | Adjudicating Authority | May direct the earlier trustee to share all information and to co-operate | As required |
| 8 | (10) | New trustee | Gives notice of his appointment to the bankrupt | Within seven days of his appointment |
Sub-section (9) adds that the replaced trustee "shall be released in accordance with the provisions of section 148".
Who decides. The committee of creditors is constituted under section 134 (section 79(11)). The vote under sub-section (2) is by "seventy-five per cent. of voting share". The section does not say how "voting share" is computed; sections 133 to 135 deal with the meeting of creditors, its conduct and voting rights (see Sections 133 to 135).
What the Board recommends. The Board must recommend a trustee "against whom no disciplinary proceedings are pending". The text does not set out how the Board finds this.
What the section does not say. It lists no grounds for replacement; the committee need only be "of the opinion" that replacement is required. It does not say what happens if a time limit is missed. It gives no notice period to the earlier trustee.
A worked example
The committee of creditors in the bankruptcy of Sanjay Iyer loses confidence in the trustee. At a meeting, creditors holding seventy-five per cent. of voting share vote to propose a replacement, and the committee applies to the Adjudicating Authority. Within seven days the Adjudicating Authority directs the Board; within ten days the Board recommends another insolvency professional against whom no disciplinary proceedings are pending; within fourteen days of receiving the recommendation the Adjudicating Authority appoints her. On the date of her appointment the earlier trustee hands over the estate, and the new trustee gives Sanjay notice within seven days. The earlier trustee is released under section 148. The numbers are those of the text; the names and facts are invented.
How the sections fit together
- Appointment of the first trustee is under section 125; see the live post on bankruptcy trustee appointment under section 125.
- Resignation, vacancy and release follow the same Board-recommendation pattern in sections 146 to 148: see Sections 146 to 148.
- Administration of the estate and completion of administration are in sections 136 and 137: see Sections 136 and 137.
Law around these sections
The Amendment Act, 2026 has no clause that amends sections 143, 144 or 145. It does amend sections 178 and 208, which these sections mention. 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 any of those changes has been notified.
For personal guarantors to corporate debtors, the Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 (the copy consulted is amended up to 02-06-2026) apply alongside Part III; no rules or regulations for other individuals or for partnership firms are in the texts consulted.
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 with a bankruptcy trustee issue?
If you sit on a committee of creditors weighing a change of trustee, or you are a trustee facing a fee or conduct question, the time limits and the voting threshold need care. Our team can walk through the sequence in section 145 with you in a legal consultation.
Key takeaways
- Section 143 ties the trustee to the code of conduct under section 208.
- Section 144 fees are "as may be specified", in proportion to the estate's value, paid from distribution under section 178.
- Replacement needs a seventy-five per cent. vote of voting share at a meeting of the committee of creditors.
- The timeline is seven days (direction), ten days (recommendation), fourteen days (appointment), then handover on the appointment date and notice to the bankrupt within seven days.
- The replacement must be someone against whom no disciplinary proceedings are pending.
- The replaced trustee is released under section 148.
Read next
- Sections 146 to 148: resignation, vacancy and release of the bankruptcy trustee
- Section 142 of the Insolvency and Bankruptcy Code, 2016: modification or recall of a bankruptcy order
- Bankruptcy trustee appointment and the interim moratorium
- Insolvency professional registration under sections 206 to 208
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.