Sections 84 and 85 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.
Once the resolution professional has reported, the Adjudicating Authority decides the fresh start application under section 84. If it admits the application, section 85 starts a moratorium on all the debts and places six restrictions on the debtor for a period of one hundred and eighty days. This article reads both sections as printed in the IBBI consolidated text of the Code amended up to 12 August 2021. A debtor who is about to enter this stage can take a legal consultation to plan for the restrictions.
The Adjudicating Authority may, within fourteen days from the date of the resolution professional's report, admit or reject the application. An admitting order must state the amounts accepted as qualifying debts and the other amounts eligible for discharge, and a copy goes to the creditors within seven days. On admission, a moratorium begins on all the debts, stays pending proceedings and bars new ones, and the debtor must observe the restrictions in section 85(3). The moratorium ceases at the end of one hundred and eighty days from admission unless the admitting order is revoked.
Section 84: the order on the application
The decision (sub-section (1)). "The Adjudicating Authority may within fourteen days from the date of submission of the report by the resolution professional, pass an order either admitting or rejecting the application made under sub-section (1) of section 81." The word is "may", and the period runs from submission of the report under section 83.
Printing point: sub-section (1) speaks of "the application made under sub-section (1) of section 81", whereas sub-section (1) of section 81 is the provision on the interim-moratorium and the application itself is made under section 80. We quote it as printed and read it as a reference to the fresh start application.
What an admitting order must say (sub-section (2)). The order accepting the application "shall state the amount which has been accepted as qualifying debts by the resolution professional and other amounts eligible for discharge under section 92 for the purposes of the fresh start order." This links back to section 83(2), where the professional's report details those amounts, and forward to section 92, which deals with the discharge order.
Copies to creditors (sub-section (3)). A copy of the order, with a copy of the application, "shall be provided to the creditors mentioned in the application within seven days of the passing of the order." The creditors known to the Adjudicating Authority are therefore those the debtor listed under section 81(4)(a). A creditor whom the debtor left out of the list has no entitlement to a copy under this sub-section. That consequence follows from the words, and it is why completeness of the list matters.
Section 85: what admission does
The moratorium (sub-sections (1) and (2))
"On the date of admission of the application, the moratorium period shall commence in respect of all the debts." During the moratorium period:
(a) "any pending legal action or legal proceeding in respect of any debt shall be deemed to have been stayed"; and
(b) "subject to the provisions of section 86, the creditors shall not initiate any legal action or proceedings in respect of any debt."
The words "subject to the provisions of section 86" matter. Section 86 allows a creditor named in the order to object, within ten days of receipt of the order, only on the grounds listed there. See our article on sections 86 and 87.
Restrictions on the debtor (sub-section (3))
During the moratorium period the debtor shall:
| Clause | Restriction or duty |
|---|---|
| (a) | Not act as a director of any company, or directly or indirectly take part in or be concerned in the promotion, formation or management of a company |
| (b) | Not dispose of or alienate any of his assets |
| (c) | Inform his business partners that he is undergoing a fresh start process |
| (d) | Inform, prior to entering into any financial or commercial transaction of such value as may be notified by the Central Government, either individually or jointly, that he is undergoing a fresh start process |
| (e) | Disclose the name under which he enters into business transactions, if it is different from the name in the application admitted under section 84 |
| (f) | Not travel outside India except with the permission of the Adjudicating Authority |
Four points need care.
- Clause (a) is wide. It reaches not only a directorship but any direct or indirect involvement in the "promotion, formation or management of a company". A debtor who advises a family company informally should check the words.
- Clause (b) is absolute in its terms. The clause does not allow ordinary-course dealings, and it does not provide an exception for small amounts. The reader should not read an exception into it.
- Clause (d) depends on a notified value. The transaction value is "such value as may be notified by the Central Government". No such notification is in the texts consulted, so no figure is stated here; the notified value must be checked.
- Clause (f) needs permission. Travel abroad requires the permission of the Adjudicating Authority.
The 180-day limit (sub-section (4))
"The moratorium ceases to have effect at the end of the period of one hundred and eighty days beginning with the date of admission unless the order admitting the application is revoked under sub-section (2) of section 91." Section 91 allows the resolution professional to apply for revocation on stated grounds; see our article on sections 91 to 93. The final list of qualifying debts must reach the Adjudicating Authority at least seven days before the moratorium period comes to an end (section 92(1)), and the discharge order follows at the end of that period under section 92(2).
Example. Farhan Qureshi's fresh start application is admitted. The order lists qualifying debts owed to three lenders and a supplier. Within seven days each of them receives a copy. From that date, a suit pending against Farhan for one of those debts is deemed stayed. Farhan may not alienate his assets, may not take part in managing a company, must tell his business partners that he is undergoing a fresh start process and must seek permission before travelling outside India. If he trades under a trade name different from the name in the admitted application, he must disclose the name used in each transaction.
How the two moratoria differ
The interim-moratorium of section 81 begins on filing and ends on admission or rejection. The moratorium of section 85 begins on admission and, on the words of sub-section (4), ceases at the end of one hundred and eighty days. The first covers the gap before the decision; the second covers the working period of the process. Our article on section 81 discusses the first. The section does not say what the Adjudicating Authority must do if it does not decide within fourteen days; the period is expressed with "may".
No rules or regulations on the fresh start process are in the texts consulted, and this article gives no further procedure.
The Amendment Act, 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) does not amend sections 84 or 85 as printed in the texts consulted. 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 any change affecting Part III 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 living with the fresh start restrictions?
The restrictions in section 85(3) bite from the date of admission, and some of them, such as the transaction-value disclosure, depend on a notified value. A legal consultation can help you list what you must change in your business and personal dealings during the moratorium.
Key takeaways
- The Adjudicating Authority may admit or reject within fourteen days of the resolution professional's report.
- The admitting order states the qualifying debts and amounts eligible for discharge.
- Creditors named in the application get a copy within seven days.
- The moratorium starts on admission and ceases after one hundred and eighty days unless the order is revoked.
- The debtor faces six restrictions or duties, including a bar on travel outside India without permission.
Read next
- Sections 86 and 87: objections by creditors
- Sections 91 to 93: revocation, discharge order and standard of conduct
- Sections 82 and 83: the resolution professional and examination
- Section 80 and the fresh start process
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.