Sections 54-O and 54P 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 54-O lets the committee of creditors switch a pre-packaged insolvency resolution process into a full corporate insolvency resolution process. Section 54P borrows provisions of other chapters for the pre-packaged process and changes some of their references. This article explains both as per the IBBI consolidated text of the Code amended up to 12 August 2021. The consolidated text prints the first section as "54-O" with a hyphen and no full stop after the number; this article follows the printing.
Before the plan is approved, the committee of creditors may by not less than sixty-six per cent. of the voting shares resolve to start a corporate insolvency resolution process, if the corporate debtor is eligible under Chapter II. The Adjudicating Authority passes the order within thirty days of the intimation, and the order is deemed an order of admission under section 7. Section 54P then applies sections and chapters to the pre-packaged process, with listed changes of reference.
Section 54-O(1): the committee's resolution
"The committee of creditors, at any time after the pre-packaged insolvency commencement date but before the approval of resolution plan under sub-section (4) or sub-section (12), as the case may be of section 54K, by a vote of not less than sixty-six per cent. of the voting shares, may resolve to initiate a corporate insolvency resolution process in respect of the corporate debtor, if such corporate debtor is eligible for corporate insolvency resolution process under Chapter II."
| Element | Words of the sub-section |
|---|---|
| Who | the committee of creditors |
| When | after the pre-packaged insolvency commencement date, before approval of the plan under section 54K(4) or (12) |
| Vote | "not less than sixty-six per cent. of the voting shares" |
| Condition | the corporate debtor is "eligible for corporate insolvency resolution process under Chapter II" |
The word is "may". Creditors choose between terminating the process under section 54N and starting a full corporate insolvency resolution process under section 54-O. Creditors and professionals who are weighing the two routes can take legal consultation before the vote.
Section 54-O(2) and (3): the order and the interim resolution professional
"Notwithstanding anything to the contrary contained in Chapter II, where the resolution professional intimates the Adjudicating Authority of the decision of the committee of creditors under sub-section (1), the Adjudicating Authority shall, within thirty days of the date of such intimation, pass an order to —
- (a) terminate the pre-packaged insolvency resolution process and initiate corporate insolvency resolution process under Chapter II in respect of the corporate debtor;
- (b) appoint the resolution professional referred to in clause (b) of sub-section (1) of section 54E as the interim resolution professional, subject to submission of written consent by such resolution professional to the Adjudicating Authority in such form as may be specified; and
- (c) declare that the pre-packaged insolvency resolution process costs, if any, shall be included as part of insolvency resolution process costs for the purposes of the corporate insolvency resolution process of the corporate debtor."
If the resolution professional "fails to submit written consent", sub-section (3) says the Adjudicating Authority "shall appoint an interim resolution professional by making a reference to the Board for recommendation, in the manner as provided under section 16". Section 16 has a live post: appointment of the interim resolution professional, and the section is amended by section 10 of the Insolvency and Bankruptcy Code (Amendment) Act, 2026.
Section 54-O(4): effects of the order
Where the order is passed:
| Clause | Effect |
|---|---|
| (a) | the order "shall be deemed to be an order of admission of an application under section 7 and shall have the same effect" |
| (b) | the corporate insolvency resolution process "shall commence from the date of such order" |
| (c) | proceedings for avoidance of transactions under Chapter III and proceedings under sections 66 and 67A, if any, "shall continue during the corporate insolvency resolution process" |
| (d) | for the purposes of sections 43, 46 and 50, references to "insolvency commencement date" mean "pre-packaged insolvency commencement date" |
| (e) | in computing the relevant time or the period for avoidable transactions, the duration of the pre-packaged process "shall also be included, notwithstanding anything to the contrary contained in sections 43, 46 and 50" |
Clauses (d) and (e) matter to anyone reviewing past transactions. The look-back in sections 43, 46 and 50 is counted from the pre-packaged insolvency commencement date, and the time spent in the pre-pack is included. The Amendment Act, 2026 changes the words of sections 43, 46 and 50 (the look-back window is expressed as starting from a date and ending on the "insolvency commencement date", in section 50 "starting from two years preceding the initiation date and ending on"); see the article on sections 50 and 51. How clauses (d) and (e) read with the amended words is not stated in the texts consulted and should be checked.
Section 54P(1): which provisions apply
"Save as provided under this Chapter, the provisions of sections 24, 25A, 26, 27, 28, 29A, 32A, 43 to 51, and the provisions of Chapters VI and VII of this Part shall, mutatis mutandis apply, to the pre-packaged insolvency resolution process, subject to the following." The conditions are seven changes of reference:
| Clause | Reference in the borrowed provision | Read as |
|---|---|---|
| (a) | "members of the suspended Board of Directors or the partners" in section 24(3)(b) | "members of the Board of Directors or the partners, unless an order has been passed by the Adjudicating Authority under section 54J" |
| (b) | "clause (j) of sub-section (2) of section 25" in section 26 | "clause (h) of sub-section (2) of section 54F" |
| (c) | "section 16" in section 27 | "section 54E" |
| (d) | "resolution professional" in section 28(1) and (4) | "corporate debtor" |
| (e) | "section 31" in section 61(3) | "sub-section (1) of section 54L" |
| (f) | "section 14" in section 74(1) and (2) | "clause (a) of sub-section (1) of section 54E" |
| (g) | "section 31" in section 74(3) | "sub-section (1) of section 54L" |
The sections borrowed include the committee meetings of section 24, the authorised representative of section 25A, the replacement of the resolution professional in section 27, prior approval in section 28, the bars in section 29A and the protection in section 32A. The groups of Chapters VI and VII cover the Adjudicating Authority, appeals and the offences and penalties of Part II. This is a pointer only: those sections are explained in our articles on the sections concerned, for example section 24, section 28 and section 29A.
Section 54P(2): general substitutions
"Without prejudice to the provisions of this Chapter and unless the context otherwise requires", where Chapters II, III, VI and VII are applied, references to the "insolvency commencement date" are read as the "pre-packaged insolvency commencement date"; references to the "resolution professional" or "interim resolution professional" as the resolution professional appointed under this Chapter; references to "corporate insolvency resolution process" as "pre-packaged insolvency resolution process"; and references to the "insolvency resolution process period" as the "pre-packaged insolvency resolution process period".
What the Amendment Act, 2026 does near these sections
The Amendment Act, 2026 does not amend section 54-O or section 54P. Several provisions they use are changed, and the changes interact with section 54P(1) in three places that the texts consulted do not reconcile:
- Section 26. Clause (b) refers to "clause (j) of sub-section (2) of section 25" in section 26. Section 16 of the Amendment Act, 2026 substitutes section 26 with a new section whose first words are "The filing of an application in respect of an avoidance transaction or fraudulent or wrongful trading or under section 47, shall not affect the proceedings of the corporate insolvency resolution process or the liquidation process", with an Explanation. The new text does not contain the words "clause (j) of sub-section (2) of section 25", so how clause (b) reads with it is not stated. Section 15 of that Act also substitutes clause (j) of section 25(2).
- Section 74. Clauses (f) and (g) refer to section 74. Section 49 of the Amendment Act, 2026 omits section 74 and section 50 omits section 76. The saving printed in Explanation II to the new section 235A reads that the omission of sections 74 and 76 "shall not affect": "(i) any prosecution instituted under these sections on and before the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 and pending immediately before such date of commencement before any court ... ; and (ii) any punishment imposed under these sections on and before the date of commencement". See our article on sections 67B and 67C and the omitted sections 74 and 76.
- Sections 43 to 51. Sections 43, 46, 47, 49, 50 are changed by that Act (sections 26 to 30 of the Amendment Act, 2026); see our article on sections 50 and 51.
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 these 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.
Amendments and notifications made after 12 August 2021, other than the Amendment Act, 2026, are not in the texts consulted and should be checked.
Example
Delta Fabrics Pvt Ltd is in a pre-packaged process. Before the plan is approved, the creditors decide that the base plan is unworkable and that a full process is needed. The committee resolves, by not less than sixty-six per cent. of the voting shares, to initiate a corporate insolvency resolution process, and the company is eligible under Chapter II. The resolution professional intimates the Adjudicating Authority, which within thirty days terminates the pre-pack and starts the CIRP, appoints the same professional as interim resolution professional if he consents, and treats the pre-pack costs as part of the CIRP costs. The order is deemed an admission under section 7. The names are invented.
Need help choosing between termination and a CIRP?
The choice between ending a pre-packaged process and moving to a full corporate insolvency resolution process affects costs, the look-back for avoidable transactions and who runs the process. Our team can help you compare the routes through legal consultation.
Key takeaways
- Section 54-O(1): the committee may resolve by not less than sixty-six per cent. of the voting shares to start a CIRP, before the plan is approved, if the debtor is eligible under Chapter II.
- The Adjudicating Authority passes the order within thirty days of the intimation; it is deemed an order of admission under section 7.
- The pre-pack resolution professional is appointed interim resolution professional on written consent; otherwise section 16 is followed.
- For sections 43, 46 and 50 the "insolvency commencement date" is the pre-packaged commencement date, and the pre-pack period counts in the look-back.
- Section 54P applies named sections and Chapters VI and VII with seven changes of reference; the 2026 Act changes or omits several provisions it relies on.
Read next
- Section 54N: termination of the pre-packaged process
- Sections 55 to 58: fast track process and its omission
- Section 16: appointment of the interim resolution professional
- 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.