Section 28A 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.
Section 28A, inserted by the IBC (Amendment) Act, 2026, allows both corporate and personal guarantor assets to be brought into the corporate insolvency resolution process, subject to CoC approval and to the creditor having possession of the asset. Valuation methodology and distribution norms are to be specified in regulations yet to be notified.
The structural problem it solves
A recurring failure in CIRP has been the inability to consolidate guarantor assets — particularly where plant and machinery or critical infrastructure rests on land owned by family members, related entities or personal guarantors. The corporate debtor operates the factory; the land under it belongs to the promoter's family trust. A resolution applicant cannot buy a factory it cannot occupy. ICAI's assessment is that this gap "often forced viable businesses into liquidation because resolution without those assets was economically unviable".
The business was saveable. The Code could not reach the one asset that made it saveable. Section 28A closes that.
The two conditions
| Condition | Requirement |
|---|---|
| CoC approval | The committee must approve bringing the guarantor asset in |
| Possession | The creditor must have possession of the asset |
The possession condition is the real limit on the section. It is not a general power to pull in anything a guarantor owns — it operates where the creditor is already in possession, which in practice means assets over which enforcement has already progressed. An untouched asset held by a personal guarantor is not brought in by section 28A alone.
What is still to come
The methodology for valuation of such assets, and for sharing them among creditors, is to be specified in regulations. Those regulations are not yet notified. Two consequences follow for anyone advising today:
- A resolution plan cannot yet be built on a defined distribution treatment for section 28A assets.
- The valuation basis — whether these assets are valued on the same fair value and liquidation value footing as the corporate debtor's own assets — is undetermined.
The three implications for resolution professionals
1. Forensic capability becomes non-negotiable
ICAI's language is that forensic capability is now "non-negotiable". RPs must proactively trace and identify guarantor assets through forensic audits, including:
- assets held indirectly through family members;
- assets held through trusts;
- assets held through nominee arrangements; and
- assets located in foreign jurisdictions.
2. Three parallel processes must be coordinated
Section 28A does not displace the other routes to guarantor assets. The RP must run the CIRP consolidation alongside:
- Securitisation Act enforcement by secured creditors;
- personal guarantor insolvency proceedings; and
- section 28A consolidation itself.
These can pull in different directions — enforcement puts a creditor in possession, which is the precondition for section 28A, but an enforcement sale defeats the consolidation the CoC may want.
3. The economics reward it
Better asset identification translates directly into higher creditor recovery, and ICAI notes that institutions are increasingly willing to pay results-oriented fees for it. This is one of the few places in the amendment where the professional incentive and the statutory obligation point the same way.
Practical sequence for an RP
- Identify the guarantees — corporate and personal — from the loan documentation at the start of the CIRP, not when the plan is being negotiated.
- Trace the assets behind each guarantee, through a forensic audit that reaches family members, trusts, nominees and foreign holdings.
- Establish which assets are economically necessary to the corporate debtor's operations — those are the section 28A candidates that change plan value.
- Establish possession. Which creditor holds which asset, and on what basis.
- Take it to the CoC with the recovery differential quantified.
- Track the regulations for valuation and distribution before committing a plan structure to a specific treatment.
Compliance checklist
- Run the guarantee inventory at commencement of every CIRP.
- Commission a forensic transaction and asset-tracing review as standard, not on request.
- Test the possession condition asset by asset before assuming section 28A is available.
- Coordinate with Securitisation Act enforcement and any personal guarantor proceedings.
- Document the economic necessity of each asset to the corporate debtor's operations.
- Do not commit to a distribution treatment before the regulations issue.
- Read section 28A alongside Chapter VA group insolvency — they often address the same underlying asset-location problem.
Common mistakes
- Assuming section 28A reaches any guarantor asset. The creditor must have possession.
- Leaving asset tracing until the plan stage.
- Limiting the search to directly held assets and missing trusts, nominees and foreign holdings.
- Allowing enforcement to defeat consolidation through lack of coordination.
- Building a plan on an assumed distribution methodology.