Sections 86 and 87 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.
A fresh start order discharges qualifying debts, so creditors need a way to say that a debt has been wrongly listed or wrongly described. Section 86 gives them that route, limited to two grounds and ten days. Section 87 then lets either the debtor or the creditor challenge what the resolution professional did with the objection. This article reads both sections as printed in the IBBI consolidated text of the Code amended up to 12 August 2021. A creditor weighing an objection can also speak to a legal dispute resolution adviser.
A creditor named in the Adjudicating Authority's admission order may, within ten days of receiving it, object only on two grounds: that a debt should not have been included as a qualifying debt, or that the details of the qualifying debt in the order are incorrect. The resolution professional must consider every objection and accept or reject it within ten days of the application. A debtor or creditor aggrieved by that action may apply to the Adjudicating Authority within ten days on three grounds, and the Authority decides within fourteen days.
Section 86: the creditor's objection
Who may object, when and on what grounds (sub-section (1)). "Any creditor mentioned in the order of the Adjudicating Authority under section 84 to whom a qualifying debt is owed may, within a period of ten days from the date of receipt of the order under section 84, object only on the following grounds, namely:" (a) inclusion of a debt as a qualifying debt; or (b) incorrectness of the details of the qualifying debt specified in the order.
Three limits are visible. The creditor must be one "mentioned in the order". The debt must be a qualifying debt owed to that creditor. The word "only" confines the objection to the two grounds. A general complaint against the fresh start application, or against the debtor's conduct, is outside section 86(1).
How to object (sub-sections (2) and (3)). The objection is filed "by way of an application to the resolution professional", and it must be "supported by such information and documents as may be prescribed". What is prescribed is not in the texts consulted; no rules or regulations on the fresh start process are in them, so no form or document list is given here.
What the professional must do (sub-sections (4) and (5)). The professional "shall consider every objection" and must "either accept or reject the objections, within ten days of the date of the application." The professional has no discretion to ignore an objection, and the ten days run from the date of the creditor's application.
Wider examination (sub-section (6)). The professional "may examine any matter that appears to him to be relevant to the making of a final list of qualifying debts for the purposes of section 92." This is a power, not a duty, and it is not confined to the objecting creditor.
Outcomes (sub-section (7)). On the basis of the examination under sub-section (5) or (6), the professional "shall":
| Clause | Step |
|---|---|
| (a) | Prepare an amended list of qualifying debts for the purpose of the discharge order |
| (b) | Make an application to the Adjudicating Authority for directions under section 90 |
| (c) | Take such other steps as he considers necessary in relation to the debtor |
The three outcomes are joined by "or", so the professional chooses among them according to the case. The list that results is the foundation of the final list under section 92(1), which must reach the Adjudicating Authority at least seven days before the moratorium ends. Section 90, which lets the professional seek directions, is discussed in our article on sections 88 to 90.
Example. Following the admission of Nikhil Bhatt's fresh start application, the order lists a debt of a trade supplier, Harbour Fabrics, as a qualifying debt of a stated amount. Harbour Fabrics holds a record showing a larger sum due with interest. Within ten days of receiving the order it applies to the resolution professional on ground (b), the incorrectness of the details of the qualifying debt, with supporting documents. The professional considers the objection, and within ten days of the application either accepts or rejects it. If he accepts it, he prepares an amended list of qualifying debts for the discharge order.
Section 87: application against the resolution professional's decision
Who may apply and on what grounds (sub-section (1)). "The debtor or the creditor who is aggrieved by the action taken by the resolution professional under section 86" may, "within ten days of such decision", apply to the Adjudicating Authority "challenging such action on any of the following grounds":
| Clause | Ground |
|---|---|
| (a) | The resolution professional has not given an opportunity to the debtor or the creditor to make a representation |
| (b) | The resolution professional colluded with the other party in arriving at the decision |
| (c) | The resolution professional has not complied with the requirements of section 86 |
The grounds are about process and integrity, not about the merits of the debt as such. A creditor who disagrees only with the professional's view on the amount, without alleging one of these three failings, does not find a ground in the text.
Printing point: clause (c) prints "sec-tion 86" with a hyphen at a line break. It is read as "section 86".
Decision within fourteen days (sub-section (2)). The Adjudicating Authority "shall decide the application referred to in sub-section (1) within fourteen days of such application and make an order as it deems fit." The fourteen days run from the application. The order is open-ended: "as it deems fit".
Referral to the Board (sub-section (3)). Where the application "has been allowed", the Adjudicating Authority "shall forward its order to the Board and the Board may take such action as may be required under Chapter VI of Part IV against the resolution professional." So a successful challenge carries a consequence for the professional beyond the case itself. Chapter VI of Part IV is the Chapter on inspection and investigation (sections 217 to 220); this article does not describe its contents.
Timeline at a glance
| Step | Period printed | Section |
|---|---|---|
| Creditor objects to the resolution professional | Within ten days of receipt of the section 84 order | 86(1) |
| Resolution professional accepts or rejects | Within ten days of the creditor's application | 86(5) |
| Aggrieved debtor or creditor applies to the Adjudicating Authority | Within ten days of the decision | 87(1) |
| Adjudicating Authority decides | Within fourteen days of the application | 87(2) |
These periods overlap with the moratorium of one hundred and eighty days under section 85(4), which is why delay on any side matters. See our article on sections 84 and 85. Neither section 86 nor section 87 states what happens if a period is missed.
The Amendment Act, 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) does not amend sections 86 or 87 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 with an objection or a challenge?
The ten-day periods in sections 86 and 87 are short, and the grounds are narrow. Our legal dispute resolution team can read the admission order, check whether your concern fits one of the permitted grounds and help you prepare a focused objection or application.
Key takeaways
- Only a creditor mentioned in the section 84 order, owed a qualifying debt, may object under section 86.
- The two grounds are wrongful inclusion as a qualifying debt and incorrect details; the word "only" shuts out others.
- The resolution professional must consider every objection and decide within ten days of the application.
- Section 87 allows a challenge on three grounds within ten days; the Adjudicating Authority decides within fourteen days.
- A successful challenge goes to the Board, which may act against the resolution professional.
Read next
- Sections 88 to 90: duties of the debtor, replacement and directions
- Sections 84 and 85: admission and the effect of admission
- Sections 91 to 93: revocation, discharge order and standard of conduct
- Excluded assets and the qualifying debt test under section 79
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.