Sections 67B and 67C 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.
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) inserts two new penalty sections, 67B and 67C, after section 67A, and omits sections 74 and 76, which now carry imprisonment and fines for the same kind of conduct. Section 67B provides a civil penalty for breach of the moratorium of section 14 and for breach of an approved resolution plan. Section 67C provides a civil penalty for an operational creditor that conceals a dispute or full payment in a section 9 application. This article explains the new sections from the Amendment Act, and sections 74 and 76 as printed in the IBBI consolidated text of the Code amended up to 12 August 2021, with the saving the Amendment Act prints.
Under new section 67B, the Adjudicating Authority may, on an application by the Board or the Central Government (or a person it authorises), impose a penalty of one lakh to two crore rupees for breach of the section 14 moratorium, and one lakh to one crore rupees or twenty per cent. of the amount to be distributed, whichever is higher, for breach of a resolution plan. Under section 67C, an operational creditor that conceals a dispute or full payment in a section 9 application may be penalised one lakh to two crore rupees. The Act omits sections 74 and 76 from a date to be notified and saves pending prosecutions and punishments.
Section 67B(1): the corporate debtor or its officer and the moratorium
"Where a corporate debtor or any of its officer contravenes the provisions of section 14, the Adjudicating Authority may, on an application made by the Board or the Central Government or any person authorised by the Central Government in this behalf, as the case may be, impose penalty upon the officer, who committed or authorised or permitted such contravention, which shall not be less than one lakh rupees, but may extend to two crore rupees."
The penalty falls on "the officer, who committed or authorised or permitted" the contravention. The application is made by the Board, the Central Government or a person it authorises; a creditor or the resolution professional is not listed. Section 14 has live posts: the section 14 moratorium. A director or officer who is concerned about acts done during a moratorium can take legal dispute resolution advice at once.
Section 67B(2): a creditor and the moratorium
"Where any creditor contravenes the provisions of section 14, the Adjudicating Authority may, on an application made by the Board or the Central Government or any person authorised by the Central Government in this behalf, as the case may be, impose penalty upon any person who authorised or permitted such contravention by a creditor, which shall not be less than one lakh rupees, but may extend to two crore rupees."
Here the penalty is on "any person who authorised or permitted such contravention by a creditor". The same range applies: one lakh rupees to two crore rupees.
Section 67B(3): the resolution plan
"Where a corporate debtor, any of its officers or creditors or any person on whom the approved resolution plan is binding under section 31, contravenes any of the terms of such resolution plan or abets such contravention, the Adjudicating Authority may, on an application made by the Board or the Central Government or any person authorised by the Central Government in this behalf, as the case may be, impose penalty upon such corporate debtor, officer, creditor or person, which shall not be less than one lakh rupees, but may extend to one crore rupees or twenty per cent. of the amount to be distributed under the resolution plan, whichever is higher."
| Sub-section | Conduct | Who is penalised | Range |
|---|---|---|---|
| 67B(1) | corporate debtor or its officer contravenes section 14 | the officer who committed, authorised or permitted it | one lakh rupees to two crore rupees |
| 67B(2) | a creditor contravenes section 14 | any person who authorised or permitted it | one lakh rupees to two crore rupees |
| 67B(3) | contravention of the terms of an approved plan, or abetting it | the corporate debtor, officer, creditor or person bound by the plan | one lakh rupees to one crore rupees or twenty per cent. of the amount to be distributed under the plan, whichever is higher |
In sub-section (3) the "whichever is higher" applies to the upper limit: the penalty may extend to the higher of one crore rupees and twenty per cent. of the amount to be distributed. The minimum remains one lakh rupees. The persons bound by an approved plan are described in section 31, explained in our post on section 31.
Section 67C: concealment by an operational creditor
Section 67C is printed: "Where— (a) an operational creditor has concealed in an application under section 9, the fact that the corporate debtor had notified him of a dispute in respect of the unpaid operational debt or the full and final payment thereof; or (b) any person who authorised or permitted such concealment under clause (a); or (c) any person who acted on such authorisation or permission, the Adjudicating Authority may, on an application made by the Board or the Central Government or any person authorised by the Central Government in this behalf, as the case may be, impose penalty upon such operational creditor or person, which shall not be less than one lakh rupees but may extend to two crore rupees."
The clauses are printed as a list of persons, and clauses (b) and (c) do not carry a verb of their own ("any person who authorised or permitted..."); the section is quoted as printed. Read as a whole, it reaches the operational creditor that concealed the fact, the person who authorised or permitted the concealment, and the person who acted on that authorisation or permission. The facts concealed are two: that the corporate debtor had notified the creditor of a dispute in respect of the unpaid operational debt, or that the debt had been paid in full and final. The section 9 application is explained in the post on section 9, and the notice of dispute in our article on section 8.
Sections 74 and 76 as printed in the consolidated text
Section 74 (punishment for contravention of moratorium or the resolution plan) provides that an officer who knowingly or wilfully committed, authorised or permitted a breach of section 14 by the corporate debtor "shall be punishable with imprisonment for a term which shall not be less than three years, but may extend to five years or with fine which shall not be less than one lakh rupees, but may extend to three lakh rupees, or with both" (sub-section (1)). For a creditor's breach, a person who knowingly and wilfully authorised or permitted it is punishable with imprisonment of not less than one year and up to five years, or with fine of one lakh to one crore rupees, or both (sub-section (2)). For a knowing and wilful contravention of the terms of an approved plan, or abetment, imprisonment of not less than one year and up to five years, or fine of one lakh to one crore rupees, or both (sub-section (3)).
Section 76 (punishment for non-disclosure of dispute or payment of debt by operational creditor) applies where an operational creditor "has wilfully or knowingly concealed" in a section 9 application that the corporate debtor had notified him of a dispute or of the full and final payment of the debt, or any person "who knowingly and wilfully authorised or permitted such concealment": imprisonment of not less than one year and up to five years, or fine of one lakh to one crore rupees, or both.
The differences are visible from the words. Sections 74 and 76 speak of knowing and wilful conduct and provide imprisonment; sections 67B and 67C do not use "knowingly" or "wilfully", provide only a penalty, and are applied for by the Board or the Central Government or a person it authorises. For the offences that remain in Chapter VII, see our post on offences under sections 68 to 73.
What the Amendment Act, 2026 does and the saving it prints
Section 48 of the Amendment Act, 2026 inserts sections 67B and 67C; section 49 omits section 74 and section 50 omits section 76. 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 these changes have been notified. The omission therefore takes effect from a date to be notified.
The saving is in Explanation II to the new section 235A (substituted by section 68 of the Amendment Act, 2026). It reads, as printed: "For the purposes of this Code, it is hereby declared that the omission of sections 74 and 76, and the amendment of this section by the Insolvency and Bankruptcy Code (Amendment) Act, 2026, shall not affect:— (i) any prosecution instituted under these sections on and before the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 and pending immediately before such date of commencement before any court, which shall continue to be heard and disposed of by the said court as if the Insolvency and Bankruptcy Code (Amendment) Act, 2026 had not been enacted; and (ii) any punishment imposed under these sections on and before the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2026." The Explanation is tied to "the date of commencement" of the Amendment Act, 2026, which this article does not give because the notification is not in the texts consulted. The saving speaks of prosecutions instituted and punishments imposed on and before that date. The texts consulted do not say how conduct before that date, but not yet prosecuted, is treated; that must be checked.
The site's posts on the penalties are the civil penalty regime of sections 67B, 67C and 64A and sections 64A, 240B and 240C. The new penalty sections sit next to section 67A; see our article on sections 67 and 67A.
Amendments and notifications made after 12 August 2021, other than the Amendment Act, 2026, are not in the texts consulted and should be checked.
Example
Ridge Polymers Pvt Ltd is under a moratorium. Its finance head sells a plant despite the moratorium. On the Board's application, the Adjudicating Authority may impose a penalty of one lakh to two crore rupees on the officer who committed or authorised the act under section 67B(1). A supplier files a section 9 application while hiding that Ridge had sent a notice of dispute; section 67C may reach the supplier and the person who authorised the concealment. Had a prosecution for a similar act been instituted under section 74 on or before the date of commencement and be pending, Explanation II to section 235A says it continues. The names and facts are invented.
Need help with a moratorium, plan or section 9 compliance?
Breaches of a moratorium or a plan, and concealment in a section 9 application, now sit on a civil penalty footing in the Amendment Act, 2026, while earlier conduct may remain under sections 74 and 76. Our team can help officers, creditors and operational creditors assess exposure through legal dispute resolution.
Key takeaways
- Section 67B: civil penalty of one lakh to two crore rupees for breach of the section 14 moratorium (by the corporate debtor's officer or by a creditor), and one lakh rupees up to the higher of one crore rupees and twenty per cent. of the amount to be distributed for breach of an approved plan.
- Section 67C: penalty of one lakh to two crore rupees for concealment in a section 9 application of a dispute or full and final payment.
- The Adjudicating Authority acts on an application by the Board, the Central Government or a person it authorises.
- Sections 74 and 76, which provide imprisonment and fines, are omitted by the Amendment Act, 2026 from a date to be notified.
- Explanation II to section 235A saves prosecutions instituted and punishments imposed under sections 74 and 76 on and before the date of commencement; check the notification.
Read next
- Sections 67 and 67A: orders in fraudulent or wrongful trading
- Section 68: punishment for concealment of property
- Sections 63, 64 and 64A: civil court bar and penalty for frivolous proceedings
- The civil penalty regime under the IBC after 2026
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.