Section 38 of IBC : Section 38: Consolidation Of Claims

Explanation using Example

Imagine a company, XYZ Pvt. Ltd., goes into liquidation on April 1, 2023. According to Section 38(1) of the Insolvency and Bankruptcy Code, the appointed liquidator must announce and allow creditors to submit their claims by April 30, 2023.

Now, ABC Bank, which had provided a loan to XYZ Pvt. Ltd., has a record of this debt in an information utility. As per Section 38(2), ABC Bank can submit its financial claim directly to the liquidator using this record within the 30-day period.

Meanwhile, a small supplier, LMN Enterprises, who supplied raw materials to XYZ Pvt. Ltd. on cr...

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