Section 94 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 94 opens Chapter III of Part III. It lets a debtor who has committed a default apply to the Adjudicating Authority to start the insolvency resolution process for his own debts. It also lists who cannot apply, what kinds of debt may be included and how partners of a firm must act. This article reads the section as printed in the IBBI consolidated text of the Code amended up to 12 August 2021. If you are considering such an application, a legal consultation can help you test eligibility before anything is filed.
A debtor who commits a default may apply, personally or through a resolution professional, for the insolvency resolution process. A partner of a firm cannot apply for the firm unless all or a majority of the partners file jointly. The application is only for debts that are not excluded debts. It is barred for an undischarged bankrupt and for a debtor already in a fresh start, insolvency resolution or bankruptcy process, and if an application under the Chapter was admitted in the preceding twelve months. Form, manner and fee are as prescribed.
Sub-section (1): who may apply and how
"A debtor who commits a default may apply, either personally or through a resolution professional, to the Adjudicating Authority for initiating the insolvency resolution process, by submitting an application."
The right belongs to a debtor "who commits a default". The amount of the default must also meet the threshold of section 78, which prints a floor of one thousand rupees unless a higher amount has been notified; see our article on section 78. The debtor may apply "personally" or "through a resolution professional". If a professional files, the Adjudicating Authority's first step under section 97 is to seek the Board's confirmation that no disciplinary proceedings are pending against him; see our article on sections 97 and 98.
Sub-section (2): partners of a firm
"Where the debtor is a partner of a firm, such debtor shall not apply under this Chapter to the Adjudicating Authority in respect of the firm unless all or a majority of the partners of the firm file the application jointly."
Two points follow from the words:
- A single partner cannot start the process for the firm. The text requires "all or a majority of the partners" to file "jointly".
- The sub-section governs an application "in respect of the firm". It does not on its face stop a partner from applying for his own individual debts.
Example. Rahul, Imran and Neelam are the three partners of a small catering firm. Rahul wishes to apply for the firm's insolvency resolution process. Under sub-section (2) he cannot do so alone. Two of the three, being a majority, may join in a single application, or all three may sign it. The sub-section does not say how the partners are to record that decision.
Sub-section (3): only debts that are not excluded debts
"An application under sub-section (1) shall be submitted only in respect of debts which are not excluded debts." Section 79 defines an excluded debt as including a liability to pay a fine imposed by a court or tribunal, a liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other legal obligation, a liability to pay maintenance under any law for the time being in force, a liability in relation to a student loan, and any other debt as may be prescribed. A debtor must therefore separate such debts from the application. Our article on excluded assets and the qualifying debt test under section 79 deals with the definitions of Part III.
Sub-section (4): who is not entitled
A debtor "shall not be entitled to make an application under sub-section (1) if he is":
| Clause | Status that bars the application |
|---|---|
| (a) | An undischarged bankrupt |
| (b) | Undergoing a fresh start process |
| (c) | Undergoing an insolvency resolution process |
| (d) | Undergoing a bankruptcy process |
Section 79 defines an "undischarged bankrupt" as a bankrupt who has not received a discharge order under section 138. Each of the four statuses is a separate bar, and the bar lasts for as long as the status does. A debtor in a fresh start process, for example, cannot start an insolvency resolution process at the same time; see our article on the fresh start process under section 80.
Sub-section (5): the twelve-month bar
"A debtor shall not be eligible to apply under sub-section (1) if an application under this Chapter has been admitted in respect of the debtor during the period of twelve months preceding the date of submission of the application under this section."
The bar attaches to an application "under this Chapter" that has been "admitted". An application that was filed and rejected does not fall within the words. The period is counted back twelve months from the date of submission of the new application. The sub-section says "in respect of the debtor", so it turns on the debtor, not on the particular debts.
Sub-section (6): form, manner and fee
"The application referred to in sub-section (1) shall be in such form and manner and accompanied with such fee as may be prescribed." The form and fee are not in the Code. The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 is the regulation set that implements this process for personal guarantors, and the copy consulted is amended up to 02-06-2026; no rules or regulations on individuals other than personal guarantors, or on partnership firms, are in the texts consulted, so no form, fee or step is given here.
What follows an application
Section 94 is the debtor's route. A creditor's route is in section 95, discussed in our article on personal guarantor insolvency and the section 95 process, and the two applications are discussed side by side in our note on sections 94 and 95. The effect of the application on the debtor's position is dealt with in sections 96 and 101; see our articles on section 96 and section 101. The role of the resolution professional is in section 99, discussed in our article on the insolvency professional in personal guarantor proceedings.
The Amendment Act, 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) does not amend section 94 as printed in the texts consulted. It does amend nearby provisions of Part III, including sections 96 and 99 (sections 51 and 52 of that Act); those are explained in the articles linked above. 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 has been notified.
Commencement of Part III is also by notification under section 1(3); no notification is in the texts consulted, so no date is given and nothing is said about the class of debtor for whom Part III has been brought into 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 deciding whether to apply under section 94?
Section 94 has several eligibility bars, and a mistake on any of them can cost time. A legal consultation can help you check the amount of default, the debts that must be left out as excluded debts, the status bars and the twelve-month look-back before you apply.
Key takeaways
- A debtor who commits a default may apply personally or through a resolution professional.
- A partner cannot apply for the firm alone; all or a majority of the partners must file jointly.
- Excluded debts cannot be included.
- An undischarged bankrupt, and a debtor in a fresh start, insolvency resolution or bankruptcy process, cannot apply.
- An application under the Chapter admitted in the preceding twelve months is a bar.
- Form, manner and fee are as prescribed.
Read next
- Sections 97 and 98: appointment and replacement of the resolution professional
- Section 100: admission or rejection of the application
- Section 78: application of Part III and the minimum default
- Personal guarantor insolvency under the IBC
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.