Sections 54D and 54E 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 54D sets the time limits of the pre-packaged insolvency resolution process: one hundred and twenty days for completion and ninety days for submitting the approved resolution plan. Section 54E says what the Adjudicating Authority must do on the day the process commences: declare a moratorium, appoint the resolution professional and cause a public announcement. This article explains both sections as per the IBBI consolidated text of the Code amended up to 12 August 2021.
The pre-packaged process must be completed within one hundred and twenty days from the pre-packaged insolvency commencement date, and the approved plan must reach the Adjudicating Authority within ninety days. If the committee of creditors approves no plan within the ninety days, the resolution professional applies for termination on the next day. On the commencement date the Adjudicating Authority declares the moratorium, appoints the resolution professional and causes a public announcement.
How sections 54D and 54E fit in
Section 54C ends with the rule that the process commences from the date of admission of the application; see our article on section 54C. Sections 54D and 54E start from that date. A corporate debtor, creditor or professional who is planning a pre-packaged case can take legal consultation on the timetable before the application is filed. For the eligibility conditions see section 54A, and for the process as a whole see the pre-packaged process for MSMEs.
Section 54D(1): one hundred and twenty days
"The pre-packaged insolvency resolution process shall be completed within a period of one hundred and twenty days from the pre-packaged insolvency commencement date." The period runs from the pre-packaged insolvency commencement date, which the Code defines in section 5. The section does not provide for an extension. It is silent on what happens if the process is not completed in the period, other than through sub-section (3) below.
Section 54D(2): ninety days for the plan
"Without prejudice to sub-section (1), the resolution professional shall submit the resolution plan, as approved by the committee of creditors, to the Adjudicating Authority under sub-section (4) or sub-section (12), as the case may be, of section 54K, within a period of ninety days from the pre-packaged insolvency commencement date."
| Limit | Period | Who acts |
|---|---|---|
| Completion of the process (54D(1)) | one hundred and twenty days | the process as a whole |
| Submission of approved plan (54D(2)) | ninety days | the resolution professional |
| Termination application (54D(3)) | the day after the ninety days expire | the resolution professional |
The ninety-day period is shorter than the one hundred and twenty-day period; the words "without prejudice to sub-section (1)" mean that the first period does not cancel the second. The route to the Adjudicating Authority is through section 54K(4) or (12), which are for the next articles in this series; see section 54K.
Section 54D(3): termination if no plan is approved
"Where no resolution plan is approved by the committee of creditors within the time period referred to in sub-section (2), the resolution professional shall, on the day after the expiry of such time period, file an application with the Adjudicating Authority for termination of the pre-packaged insolvency resolution process in such form and manner as may be specified." The duty is on the resolution professional, it is fixed to the day after the ninety days end, and the form and manner are left to what is specified. The termination provision is section 54N, explained in its own article.
Section 54E(1): what the Adjudicating Authority does on the commencement date
The Adjudicating Authority "shall, on the pre-packaged insolvency commencement date, along with the order of admission under section 54C", do three things.
| Clause | Action |
|---|---|
| (a) | "declare a moratorium for the purposes referred to in sub-section (1) read with sub-section (3) of section 14, which shall, mutatis mutandis apply, to the proceedings under this Chapter" |
| (b) | appoint a resolution professional: (i) "as named in the application, if no disciplinary proceeding is pending against him"; or (ii) "based on the recommendation made by the Board, if any disciplinary proceeding is pending against the insolvency professional named in the application" |
| (c) | "cause a public announcement of the initiation of the pre-packaged insolvency resolution process to be made by the resolution professional, in such form and manner as may be specified, immediately after his appointment" |
Clause (a) borrows the moratorium of section 14. The live post on the moratorium under section 14 explains that section; section 14 is itself amended by section 9 of the Insolvency and Bankruptcy Code (Amendment) Act, 2026, and the way section 54E(1)(a) is read with the amended section 14 should be checked once that Act's commencement is known. Clause (b) gives the debtor's choice of professional effect unless a disciplinary proceeding is pending against that professional, in which case the Board's recommendation applies. Clause (c) puts the public announcement in the hands of the resolution professional and requires it immediately after the appointment.
Section 54E(2): how long the moratorium lasts
"The order of moratorium shall have effect from the date of such order till the date on which the pre-packaged insolvency resolution process period comes to an end." The moratorium starts with the order and ends with the end of the "pre-packaged insolvency resolution process period", a term defined in section 5. The text is silent on any earlier release.
Example
Orchid Foods Pvt Ltd is admitted into the pre-packaged process by an order made on a Monday. On that day the Adjudicating Authority declares the moratorium, appoints Mr Kapoor, who was named in the application and has no disciplinary proceeding pending against him, and requires a public announcement by him immediately after his appointment. Mr Kapoor must submit an approved plan within ninety days from that date. If no plan is approved in that time, he files the termination application the next day. The names are invented.
The Amendment Act, 2026 and these sections
The Amendment Act, 2026 does not amend section 54D or section 54E. It amends section 54A, section 54C, section 54F, section 54L and section 54N (sections 34 to 38 of that Act), and section 14 (section 9 of that Act), which section 54E(1)(a) refers to. 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 those changes have been notified.
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.
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 planning the timetable?
A one hundred and twenty day process with an earlier ninety day plan deadline leaves little room for delay. Where a corporate debtor or its creditors want to test the dates, the plan and the announcement steps, our team can help through legal consultation.
Key takeaways
- Section 54D(1): the process is to be completed within one hundred and twenty days from the pre-packaged insolvency commencement date.
- Section 54D(2): the approved plan goes to the Adjudicating Authority within ninety days from that date.
- Section 54D(3): if no plan is approved in that time, the resolution professional files for termination on the day after the period expires.
- Section 54E(1): on the commencement date the Adjudicating Authority declares the moratorium, appoints the resolution professional and causes a public announcement.
- Section 54E(2): the moratorium runs from the order to the end of the pre-packaged insolvency resolution process period.
Read next
- Section 54C: application to initiate the pre-packaged process
- Section 54F: duties and powers of the resolution professional
- Section 54N: termination of the pre-packaged process
- The Section 14 moratorium
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.