Section 54B 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 54B lists what the insolvency professional who is proposed to be appointed as resolution professional must do before the pre-packaged insolvency resolution process starts. The duties begin on the date of the approval under section 54A(2)(e) and end if the application is not filed in time or is admitted or rejected. This article explains the section as per the IBBI consolidated text of the Code amended up to 12 August 2021.
The insolvency professional proposed to be appointed as resolution professional must prepare a report confirming that the corporate debtor meets the requirements of section 54A and that the base resolution plan conforms to section 54A(4)(c), file reports and documents with the Board, and perform other specified duties. These duties cease if the corporate debtor does not file its application in time, or if the Adjudicating Authority admits or rejects it. The professional's fees form part of the process costs only if the application is admitted.
Where section 54B fits
Chapter III-A of Part II, sections 54A to 54P, is the pre-packaged insolvency resolution process. Section 54A says which corporate debtors are eligible and what must be done before an application is made. Section 54B comes next and fixes the role of the insolvency professional before the application; a debtor or creditor weighing the route can take legal consultation at this stage. Section 54C then deals with the application to initiate the pre-packaged process. For the eligibility conditions of section 54A itself, see the live post on section 54A, and for an overview of the whole process see the pre-packaged insolvency resolution process for MSMEs.
The Chapter was inserted in the Code by the Insolvency and Bankruptcy Code (Amendment) Act, 2021, as the footnote to the consolidated text says (Act No. 26 of 2021). Section 54B is not amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2026. It refers to section 54A, which that Act does amend, and the reference is explained below.
Section 54B(1): the duties
Sub-section (1) says the insolvency professional "proposed to be appointed as the resolution professional, shall have the following duties commencing from the date of the approval under clause (e) of sub-section (2) of section 54A". Clause (e) of section 54A(2) is the approval, by the financial creditors who are not related parties, of the proposal naming the insolvency professional. So the duties start on that approval, not on the filing of the application.
| Clause | Duty as printed |
|---|---|
| (a) | prepare a report "in such form as may be specified", confirming whether the corporate debtor meets the requirements of section 54A, and the base resolution plan conforms to the requirements referred to in clause (c) of sub-section (4) of section 54A |
| (b) | file such reports and other documents with the Board, as may be specified |
| (c) | perform such other duties as may be specified |
Clause (a) has two limbs. The report must say whether the corporate debtor meets the requirements of section 54A, and whether the base resolution plan conforms to clause (c) of section 54A(4). That clause provides that the corporate debtor must give the financial creditors "a base resolution plan which conforms to the requirements referred to in section 54K, and such other conditions as may be specified" before seeking their approval under section 54A(3). The word "confirming whether" shows that the report may come out either way; the section does not say what follows if it does not confirm.
The form of the report, the reports and documents to be filed with the Board and any further duties are all left to what "may be specified". The Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021 are made under provisions of Chapter III-A of Part II; the copy consulted is amended up to 2 June 2026, and its date does not show that any provision of the Amendment Act, 2026 is in force. The detail is for those regulations and is not taken up here.
Section 54B(2): when the duties cease
The duties under sub-section (1) "shall cease, if":
- clause (a): the corporate debtor fails to file an application for initiating the process "within the time period as stated under the declaration referred to in clause (f) of sub-section (2) of section 54A"; or
- clause (b): the application "is admitted or rejected by the Adjudicating Authority", as the case may be.
Section 54A(2)(f) provides that the majority of the directors or partners make a declaration that the corporate debtor "shall file an application for initiating pre-packaged insolvency resolution process within a definite time period not exceeding ninety days". The time period for clause (a) is therefore the one stated in the declaration, which cannot exceed ninety days. The numbering inside section 54A(2)(f) in the consolidated text prints the sub-clauses as "(i)", "(i)" and "(ii)"; the slip is in the printing and is quoted here as printed.
Section 54B(3): fees
"The fees payable to the insolvency professional in relation to the duties performed under sub-section (1) shall be determined and borne in such manner as may be specified and such fees shall form part of the pre-packaged insolvency resolution process costs, if the application for initiation of pre-packaged insolvency resolution process is admitted."
Read closely, the sub-section says two things. Who determines and who bears the fees is left to what may be specified. And only if the application is admitted do the fees form part of the pre-packaged insolvency resolution process costs. The text is silent on what happens to the fees if the application is not filed or is rejected; the answer lies in what is specified.
Example
Greenfield Agro Pvt Ltd, a corporate debtor, wants to use the pre-packaged process. Its financial creditors who are not related parties approve the proposal naming Ms Rao as the insolvency professional. From that approval Ms Rao has the duties in section 54B(1). She prepares the report on whether the company meets section 54A and whether the base resolution plan conforms to section 54A(4)(c), and files the specified reports with the Board. The directors' declaration says the application will be filed within sixty days. If it is not filed in sixty days, her duties under section 54B(1) cease under section 54B(2)(a). If it is filed and the Adjudicating Authority admits it, they cease under clause (b), and her fees for the earlier work form part of the process costs. The names and periods are invented.
The change in section 54A that section 54B refers to
Section 54B itself is not touched by the Amendment Act, 2026. Section 34 of that Act amends section 54A: in sub-section (2)(e) and in sub-section (3) the words "sixty-six per cent." are replaced by "fifty-one per cent.", and clauses (a) and (b) of sub-section (2) are extended to cover a creditor-initiated insolvency resolution process. 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 this change 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 with a pre-packaged insolvency?
A corporate debtor that is thinking of the pre-packaged route, and the financial creditors asked to approve it, need to settle the eligibility facts, the base resolution plan and the choice of professional before anything is filed. Our team can advise through legal consultation on the sequence and the documents.
Key takeaways
- The duties under section 54B(1) start on the approval under section 54A(2)(e) and apply to the insolvency professional proposed to be appointed as resolution professional.
- The report must address two things: whether the corporate debtor meets section 54A and whether the base resolution plan conforms to section 54A(4)(c).
- The form of the report, the filings with the Board and further duties are left to what may be specified.
- The duties cease if the application is not filed within the period in the declaration, or if it is admitted or rejected.
- The fees form part of the process costs only if the application is admitted; the rest is left to what may be specified.
Read next
- Section 54C: application to initiate the pre-packaged process
- Sections 54D and 54E: time limit, moratorium and public announcement
- Section 54: dissolution of the corporate debtor
- IBC for MSMEs: special provisions and the pre-pack
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.