Sections 54G 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 54G, 54H and 54-I give the first working rules of the pre-packaged insolvency resolution process. The corporate debtor submits its own list of claims and a preliminary information memorandum within two days, the board of directors or the partners keep managing the business, and the resolution professional constitutes the committee of creditors within seven days. This article explains the three sections as per the IBBI consolidated text of the Code amended up to 12 August 2021. The text prints the third section as "54-I", with a hyphen, and this article follows the printing.
Within two days of the pre-packaged insolvency commencement date the corporate debtor gives the resolution professional a list of claims and a preliminary information memorandum; those who authorise misleading information are liable to pay compensation. Management stays with the board or partners, who must protect value and run the debtor as a going concern. The resolution professional constitutes the committee of creditors within seven days, and its first meeting is within seven days after that.
Section 54G(1): the debtor files the information
"The corporate debtor shall, within two days of the pre-packaged insolvency commencement date, submit to the resolution professional the following information, updated as on that date, in such form and manner as may be specified":
| Clause | Content |
|---|---|
| (a) | "a list of claims, along with details of the respective creditors, their security interests and guarantees, if any" |
| (b) | "a preliminary information memorandum containing information relevant for formulating a resolution plan" |
This differs from the ordinary corporate insolvency resolution process, where creditors submit claims. Here the corporate debtor submits the list, and the resolution professional confirms it under section 54F(2)(a). The preliminary information memorandum is the base from which the resolution professional later prepares the information memorandum, as section 54F(2)(g) says. The pre-packaged insolvency commencement date is as defined in section 5 of the Code.
Section 54G(2) to (4): liability for omissions and misleading information
Where any person has sustained loss or damage "as a consequence of the omission of any material information or inclusion of any misleading information in the list of claims or the preliminary information memorandum", the following persons "shall, without prejudice to section 77A, be liable to pay compensation to every person who has sustained such loss or damage":
- (a) a promoter or director or partner of the corporate debtor, as the case may be, at the time of submission; or
- (b) a person who has authorised the submission.
Sub-section (3) protects a person where the list or memorandum "was submitted by the corporate debtor without his knowledge or consent". Sub-section (4) adds that, "Subject to section 54E, any person, who sustained any loss or damage" on that ground "shall be entitled to move a court having jurisdiction for seeking compensation for such loss or damage". Section 77A, to which sub-section (2) refers, is the offence provision for the pre-packaged process, covered in our article on section 77A. The words "subject to section 54E" in sub-section (4) point back to the moratorium of section 54E.
Directors and promoters who will sign or authorise such documents can take advice from our team on the information they put in them through financial and legal due diligence before the list is submitted.
Section 54H: management of the affairs of the corporate debtor
The section applies "During the pre-packaged insolvency resolution process period" and has three clauses.
| Clause | Rule |
|---|---|
| (a) | "the management of the affairs of the corporate debtor shall continue to vest in the Board of Directors or the partners, as the case may be, of the corporate debtor, subject to such conditions as may be specified" |
| (b) | the Board of Directors or the partners "shall make every endeavour to protect and preserve the value of the property of the corporate debtor, and manage its operations as a going concern" |
| (c) | "the promoters, members, personnel and partners, as the case may be, of the corporate debtor, shall exercise and discharge their contractual or statutory rights and obligations in relation to the corporate debtor, subject to the provisions of this Chapter and such other conditions and restrictions as may be prescribed" |
This is the debtor-in-possession feature of the pre-packaged process: management is not taken over by the resolution professional at the start. The resolution professional monitors management under section 54F(2)(d) and informs the committee of creditors of any breach under clause (e). The management can be vested in the resolution professional later under section 54J, which is explained in our article on section 54J.
Section 54-I(1) and (2): constituting the committee and the first meeting
"The resolution professional shall, within seven days of the pre-packaged insolvency commencement date, constitute a committee of creditors, based on the list of claims confirmed under clause (a) of sub-section (2) of section 54F." A proviso says the composition "shall be altered on the basis of the updated list of claims, in such manner as may be specified, and any such alteration shall not affect the validity of any past decision of the committee of creditors." Sub-section (2): "The first meeting of the committee of creditors shall be held within seven days of the constitution of the committee of creditors."
Section 54-I(3): section 21 applied
"The provisions of section 21, except sub-section (1) thereof, shall, mutatis mutandis apply, in relation to the committee of creditors under this Chapter." The proviso reads the words "resolution professional" in sub-sections (9) and (10) of section 21 as "corporate debtor or the resolution professional". Sub-section (1) of section 21 is excluded, and sub-section (1) of section 54-I itself builds the committee from the list of claims confirmed under section 54F(2)(a). The Amendment Act, 2026 amends section 21 by adding a new sub-section (11) (section 13 of that Act); how that interacts with section 54-I(3) is not stated in the text consulted and should be checked. For section 21 itself see our article on the constitution and voting of the committee of creditors.
Example
On the day the process commences, Meridian Cables Pvt Ltd has its commencement order. Within two days the company submits to the resolution professional a list of claims showing each creditor, its security interests and any guarantees, and a preliminary information memorandum. One director is found to have left out a material liability. Under section 54G(2) the director, as a director at the time of submission, is liable to pay compensation to a person who sustained loss, without prejudice to section 77A. The board continues to run the factory under section 54H. The resolution professional constitutes the committee within seven days and the first meeting follows within seven days. The names are invented.
The Amendment Act, 2026 and these sections
The Amendment Act, 2026 does not amend sections 54G, 54H or 54-I. 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 the amendments it makes to the neighbouring provisions (sections 54A, 54C and 54F, and section 21) 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.
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 preparing the list of claims?
The two-day deadline leaves little time to build an accurate list of claims and a memorandum, and an omission can lead to personal liability for directors and promoters. Our team can help you test the list against the books and security records through financial and legal due diligence.
Key takeaways
- Section 54G(1): the corporate debtor submits the list of claims and the preliminary information memorandum within two days of the pre-packaged insolvency commencement date.
- Section 54G(2): promoters, directors, partners and those who authorised the submission are liable to compensate persons who suffer loss from omissions or misleading information; sub-section (3) protects a person who did not know or consent.
- Section 54H: management stays with the board or partners, who must protect value and run the business as a going concern.
- Section 54-I(1) and (2): the committee of creditors is constituted within seven days, and its first meeting follows within seven days of constitution.
- Section 54-I(3): section 21, except sub-section (1), applies with a changed reading of sub-sections (9) and (10).
Read next
- Section 54F: duties and powers of the resolution professional
- Section 54J: vesting of management with the resolution professional
- Section 54K: consideration and approval of the resolution plan
- The pre-packaged insolvency resolution process for MSMEs
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.