Section 68 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 68 is the first offence section of Chapter VII. It punishes an officer of the corporate debtor who, in the twelve months before the insolvency commencement date or at any time after it, conceals or fraudulently removes property, falsifies books, or deals with property obtained on credit. The punishment is imprisonment of three to five years, or a fine of one lakh to one crore rupees, or both, and a proviso protects an officer who proves he had no intent to defraud. This article explains the section as per the IBBI consolidated text of the Code amended up to 12 August 2021. Section 68 is not touched by the Insolvency and Bankruptcy Code (Amendment) Act, 2026.
An officer of the corporate debtor is punishable if, within the twelve months before the insolvency commencement date, he conceals property or a debt, fraudulently removes property, falsifies or destroys books, makes false entries, parts with documents, or deals with property bought on credit; or if he does any of these things after the insolvency commencement date. The punishment is imprisonment of not less than three years and up to five years, or fine of one lakh to one crore rupees, or both. There is no liability if he proves he had no intent to defraud or conceal the state of affairs.
Who is liable
Section 68 begins: "Where any officer of the corporate debtor has, –". The person liable is an "officer of the corporate debtor". The section does not name directors, managers or others; the term "officer" is as the Code uses it. The offence is defined by what the officer has done in one of three periods or conditions, set out in clauses (i), (ii) and (iii).
Clause (i): the twelve months before insolvency commencement
Clause (i) applies to acts "within the twelve months immediately preceding the insolvency commencement date". It lists seven acts.
| Sub-clause | Act as printed |
|---|---|
| (a) | wilfully concealed any property or part of such property of the corporate debtor, or concealed any debt due to, or from, the corporate debtor, of the value of ten thousand rupees or more |
| (b) | fraudulently removed any part of the property of the corporate debtor of the value of ten thousand rupees or more |
| (c) | wilfully concealed, destroyed, mutilated or falsified any book or paper affecting or relating to the property of the corporate debtor or its affairs |
| (d) | wilfully made any false entry in any book or paper affecting or relating to the property of the corporate debtor or its affairs |
| (e) | fraudulently parted with, altered or made any omission in any document affecting or relating to the property of the corporate debtor or its affairs |
| (f) | wilfully created any security interest over, transferred or disposed of any property of the corporate debtor which has been obtained on credit and has not been paid for, unless such creation, transfer or disposal was in the ordinary course of the business of the corporate debtor |
| (g) | wilfully concealed the knowledge of the doing by others of any of the acts mentioned in clauses (c), (d) or (e) |
The two figures of ten thousand rupees in (a) and (b) are a threshold of value: concealment of property or a debt, or removal of property, counts only at that value or above. The other sub-clauses do not carry a value threshold. The words "wilfully" or "fraudulently" run through most of them; sub-clause (f) carries a carve-out for transactions in the ordinary course of the business of the corporate debtor. Sub-clause (g) is about knowledge of others' acts and concealing that knowledge. The printed text of clause (i) joins the sub-clauses with "or" and commas in an uneven way (for example, sub-clause (c) ends with a comma and "or", and (g) refers to "clauses (c), (d) or clause (e)"); it is quoted as printed.
Officers of a company that is sliding into insolvency, and the lenders or professionals who deal with them, can take legal dispute resolution advice on how the twelve-month window counts back from the insolvency commencement date.
Clause (ii): after the insolvency commencement date
Clause (ii): "at any time after the insolvency commencement date, committed any of the acts mentioned in sub-clause (a) to (f) of clause (i) or has the knowledge of the doing by others of any of the things mentioned in sub-clauses (c) to (e) of clause (i)". After the insolvency commencement date the twelve-month window falls away: the acts in sub-clauses (a) to (f) are covered "at any time". Clause (ii) also reaches an officer who "has the knowledge" of others doing the things in sub-clauses (c) to (e). Note that clause (i)(g) speaks of concealing that knowledge "wilfully", while clause (ii) is worded as having the knowledge; the two are quoted as printed and are not reconciled here.
Clause (iii): taking property in pawn or pledge
Clause (iii): "at any time after the insolvency commencement date, taken in pawn or pledge, or otherwise received the property knowing it to be so secured, transferred or disposed". This reaches an officer who, after the insolvency commencement date, receives property knowing it to have been secured, transferred or disposed of in the ways described. The text of clause (iii) is short and does not say what "so" refers to beyond the preceding clauses; the reader should check the official text.
The punishment
"Such officer shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to five years, or with fine, which shall not be less than one lakh rupees, but may extend to one crore rupees, or with both."
| Element | Words |
|---|---|
| Imprisonment | not less than three years but which may extend to five years |
| Fine | not less than one lakh rupees, but may extend to one crore rupees |
| Combination | "or with both" |
Imprisonment and fine are alternatives, and both may be imposed together. Both the minimum and the maximum are printed.
The proviso: no intent to defraud
"Provided that nothing in this section shall render a person liable to any punishment under this section if he proves that he had no intent to defraud or to conceal the state of affairs of the corporate debtor." The proviso puts the burden on the officer: he must prove that he had no intent to defraud or to conceal the state of affairs. The section does not say to what standard he must prove it; the text is silent. Compare section 69, where the proviso is that a person is not punishable if he proves that, at the time of the acts, he had no intent to defraud creditors; see our article on section 69.
Where section 68 sits in the offences chapter
Chapter VII (offences and penalties) runs from section 68 to section 77A. Sections 68 to 73 are covered, as a group, in the live post on offences under sections 68 to 73. The other offence sections in this series are section 70 and sections 71 to 73. Related to concealment, the Amendment Act, 2026 inserts civil penalties in new sections 67B and 67C; see our article on sections 67B and 67C.
Example
Kiran Garments Pvt Ltd enters insolvency on a given date. Six months earlier, its finance officer, Mr Dutta, removed machinery worth four lakh rupees to a relative's premises without recording it. Under clause (i)(b), removal of property of the value of ten thousand rupees or more within the twelve months is covered if it was fraudulent. If he proves under the proviso that he had no intent to defraud or to conceal the state of affairs, he is not liable. After the insolvency commencement date, if he makes a false entry in a ledger, clause (ii) applies to sub-clause (d) without the twelve-month limit. The names and facts are invented.
Amendments and the Amendment Act, 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 does not amend section 68. It comes into force on the date or dates the Central Government notifies; the notification is not in the texts consulted, so check whether any related change 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 a concealment allegation?
An allegation of concealment turns on dates, values and intent. Officers who face one, and creditors who think assets have been moved, should have the books and the timeline reviewed early. Our team can help through legal dispute resolution.
Key takeaways
- Section 68 applies to an officer of the corporate debtor.
- Clause (i) covers seven acts in the twelve months before the insolvency commencement date; clause (ii) covers the acts at any time after it, plus knowledge of others' acts; clause (iii) covers taking property in pawn or pledge after it.
- Concealment of property or a debt, and fraudulent removal, count at ten thousand rupees or more.
- Punishment: imprisonment of three to five years, or fine of one lakh to one crore rupees, or both.
- The proviso excuses an officer who proves he had no intent to defraud or to conceal the state of affairs of the corporate debtor.
Read next
- Section 69: punishment for transactions defrauding creditors
- Section 70: misconduct during the corporate insolvency resolution process
- Sections 67B and 67C: civil penalties
- Offences under sections 68 to 73
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.