How to File a CIRP Application Under the Insolvency and Bankruptcy Code in India

Kaustav Chowdhury
Jul 10
4 min read

Updated: Jul 17

The Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC), provides a time-bound mechanism for resolving corporate insolvency in India. This guide explains the different routes available for initiating CIRP, the filing requirements, and the post-admission process.

Who Can File a CIRP Application?

CIRP can be initiated by three categories of applicants. A financial creditor, such as a bank, NBFC, or bondholder, may file under Section 7. An operational creditor, such as a vendor, supplier, or employee owed dues, may file under Section 9. The corporate debtor itself may voluntarily initiate CIRP under Section 10.

Minimum Default Threshold

The minimum default amount for filing a CIRP application is Rs 1 crore. This threshold was raised from the original Rs 1 lakh during the COVID-19 pandemic and has been retained in 2026.

Filing Under Section 7 (Financial Creditor)

A financial creditor must file the application in Form 1 prescribed under the NCLT Rules, along with a record of the default from an information utility or other evidence of default, details of the financial debt (loan agreement, sanction letter, or other documents), the name and written consent of the proposed Interim Resolution Professional (IRP), and the prescribed filing fee.

The application is filed before the National Company Law Tribunal (NCLT) having territorial jurisdiction over the place where the registered office of the corporate debtor is located.

Filing Under Section 9 (Operational Creditor)

Before filing a Section 9 application, the operational creditor must first serve a statutory demand notice under Section 8 of the IBC, giving the corporate debtor 10 days to either pay the outstanding amount or dispute the claim. If the corporate debtor fails to respond or fails to pay, the operational creditor may then file the application in Form 5, along with a copy of the invoice or demand notice, proof of delivery of the demand notice, an affidavit confirming that no payment has been received or no dispute has been raised, and the name and consent of the proposed IRP.

Filing Under Section 10 (Corporate Debtor)

A corporate debtor may voluntarily initiate CIRP by filing in Form 6, provided it has committed a default. The application must be accompanied by the books of account, a special resolution of the shareholders (or three-fourths of the partners in an LLP), and the name and consent of the proposed IRP.

Admission and Timeline

Under the IBC (Amendment) Act, 2026, the NCLT must now record reasons in writing if it does not pass an admission or rejection order within 14 days of receiving the application. Once admitted, the CIRP must be completed within 180 days, extendable by 90 days with Committee of Creditors (CoC) approval (totalling 270 days), and then by a further 60 days in exceptional cases (totalling 330 days).

Upon admission, a moratorium is imposed under Section 14, prohibiting the institution or continuation of suits against the corporate debtor, transfer or disposal of assets, and recovery actions by creditors.

Choosing an Interim Resolution Professional

The applicant must propose an IRP registered with the Insolvency and Bankruptcy Board of India (IBBI). The IRP must provide written consent and a declaration that they are eligible and do not have any disciplinary proceedings pending against them.

For related guidance on arbitration disputes, commercial litigation, and corporate compliance, see our other articles.

Practical Considerations

Filing a CIRP application is a significant step with far-reaching consequences for both the creditor and the corporate debtor. Before filing, creditors should ensure they have exhausted other reasonable avenues of recovery or negotiation, as the insolvency process, once initiated, fundamentally alters the relationship between the parties. The moratorium imposed upon admission prevents all other recovery actions, which can be advantageous for the creditor filing the application but detrimental to creditors who may have been pursuing separate remedies.

The documentation supporting the application is critical to its success. For financial creditors filing under Section 7, the application must be accompanied by records of the default from the information utility (if available), copies of the financial contract, evidence of the disbursement, and a statement of account showing the outstanding debt. For operational creditors filing under Section 9, the application must include a copy of the invoice or demand for payment, evidence of delivery of goods or services, and proof that the demand notice was served and the debtor failed to respond within the prescribed period.

Applicants should also be aware of the pre-admission settlement dynamics. Many corporate debtors, upon receiving notice of an insolvency application, will approach the creditor with settlement offers to avoid the stigma and operational disruption of CIRP. While such settlements can be beneficial, creditors should negotiate from a position of strength and ensure that any settlement is comprehensive, documented, and enforceable. Once the application is admitted, withdrawal requires the approval of 90% of the Committee of Creditors, making early settlement significantly easier than post-admission resolution.