Sections 75 and 77 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 75 and 77 deal with the truthfulness of the application that starts a corporate insolvency resolution process. Section 75 punishes false information furnished in an application under section 7, which a financial creditor files. Section 77 punishes false information in an application under section 10, which the corporate debtor itself files. Between them lies section 76, which the Amendment Act, 2026 omits. This article follows the IBBI consolidated text of the Code amended up to 12 August 2021.
Under section 75, any person who furnishes information in a section 7 application that is false in material particulars, knowing it to be false, or who omits a material fact, knowing it to be material, is punishable with a fine of not less than one lakh rupees and up to one crore rupees. Under section 77, a corporate debtor that does the same in a section 10 application, and any person who knowingly and wilfully authorised or permitted it, is punishable with imprisonment of not less than three years and up to five years, or a fine of one lakh to one crore rupees, or both. The Explanation printed in section 77A tells the reader when an application is "deemed to be false in material particulars".
Section 75: false information in a section 7 application
Section 75 reads: "Where any person furnishes information in the application made under section 7, which is false in material particulars, knowing it to be false or omits any material fact, knowing it to be material, such person shall be punishable with fine which shall not be less than one lakh rupees, but may extend to one crore rupees."
Four features stand out.
- Who: "any person" who furnishes the information. That is wider than the financial creditor named in section 7; an authorised signatory or agent who supplies the information is within the words.
- What: information in the application that is false in material particulars, or the omission of a material fact.
- Mental element: the person must know the information is false, or know that the omitted fact is material. Honest error is outside the section.
- Punishment: a fine only. There is no imprisonment under section 75, in contrast with section 77.
For the application itself, see our article on the section 7 application by a financial creditor. Where a false claim of default is feared, early advice from a legal dispute resolution team helps the applicant check each entry before filing.
Section 77: false information in an application by the corporate debtor
Section 77 mirrors section 75 for the corporate debtor's own application under section 10, but it adds a second offender and a heavier punishment. It applies where:
(a) a corporate debtor provides information in the application under section 10 "which is false in material particulars, knowing it to be false and omits any material fact, knowing it to be material"; or
(b) "any person who knowingly and wilfully authorised or permitted the furnishing of such information under sub-clause (a)".
The offender "as the case may be" is the corporate debtor or the person, and is punishable "with imprisonment for a term which shall not be less than three years, but which may extend to five years or with fine which shall not be less than one lakh rupees, but which may extend to one crore rupees, or with both."
Two drafting points should be noted. First, clause (a) of section 77 says "false in material particulars, knowing it to be false and omits any material fact", where section 75 says "or omits". We quote the words as printed and do not choose between readings; the reader should note the difference in the connecting word. Second, clause (b) refers to "sub-clause (a)", although (a) is a clause. We flag this printing slip and do not correct it.
Example. The directors of Lotus Components Private Limited resolve to file an application under section 10. The managing director, Sunita Rao, knows that two large creditors have been left off the list in the application and that this leaves out a material fact. She signs the application. The corporate debtor is within clause (a); Sunita, as a person who knowingly and wilfully authorised the furnishing, is within clause (b). The company can be punished, and Sunita can be punished under the same section. For the application, see our article on the section 10 application by the corporate debtor.
The Explanation: when an application is "deemed to be false"
Section 77 originally closed with an Explanation. The consolidated text shows that Explanation as omitted and records in a footnote that it was omitted by Act No. 26 of 2021 with effect from 04-04-2021. The idea did not disappear. It is now carried by the Explanation to section 77A, which says: "For the purposes of this section and sections 75, 76 and 77, an application shall be deemed to be false in material particulars in case the facts mentioned or omitted in the application, if true, or not omitted from the application as the case may be, would have been sufficient to determine the existence of a default under this Code."
In plain terms, the deeming works in two directions. If a fact stated in the application would, were it true, have been enough to establish default, the application is treated as false in material particulars when that fact is not true. If a fact left out would, had it been stated, have been enough to establish default, the same follows. The Explanation does not itself create liability; the knowledge requirement in sections 75 and 77 still has to be met. Section 77A is the subject of our article on section 77A.
Section 76 and the Amendment Act, 2026
Section 76 sits between 75 and 77. It punishes an operational creditor who wilfully or knowingly conceals in a section 9 application a dispute notified by the corporate debtor, or the full and final payment of the unpaid operational debt. It is the subject of our article on sections 67B and 67C. Section 50 of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) provides that "Section 76 of the principal Act shall be omitted." Sections 75 and 77 are not amended.
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 omission of section 76 has been notified. The Act prints a saving in Explanation II to the new section 235A: the omission of sections 74 and 76 shall not affect "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", which continues to be heard and disposed of by that court as if the Amendment Act, 2026 had not been enacted, nor "any punishment imposed under these sections on and before the date of commencement" of the Act.
| Provision | As printed in the consolidated text | Under the Amendment Act, 2026 |
|---|---|---|
| Section 75 | Fine of one lakh to one crore rupees | Not amended |
| Section 76 | Operational creditor concealing dispute or payment in section 9 application | Omitted (section 50 of the Act) |
| Section 77 | Three to five years, or fine of one lakh to one crore rupees, or both | Not amended |
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 before filing a section 7 or section 10 application?
An application that overstates or omits a fact can expose the applicant, and in a section 10 case its authorising directors, to the penalties above. Our legal dispute resolution team can check the facts and documents against the statute before anything is filed.
Key takeaways
- Section 75 punishes false information in a section 7 application by fine only, one lakh to one crore rupees.
- Section 77 punishes a corporate debtor, and any person who knowingly and wilfully authorised or permitted the furnishing, for a section 10 application.
- Knowledge of falsity, or knowledge that an omitted fact is material, is required.
- The Explanation printed in section 77A says when an application is deemed false in material particulars.
- The Amendment Act, 2026 omits section 76, not sections 75 or 77.
Read next
- Section 77A: offences related to the pre-packaged process
- Sections 71 to 73: falsification of books and false representations
- Sections 67B and 67C and the omitted sections 74 and 76
- Section 9 application by an operational creditor
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.